Allbirds Beats First Quarter Expectations

The company reported net revenue decreased 13.4 percent to $54.4 million compared to the first quarter of 2022.

Despite reporting another loss in the first quarter, Allbirds still unveiled better-than-expected results while executing on its transformation plan.

In the first quarter of 2023, the San Francisco-based footwear company said net revenue decreased 13.4 percent to $54.4 million compared to the first quarter of 2022 but increased 9.5 percent compared to the first quarter of 2021. Allbirds posted a net loss of $35.2 million, or $0.23 per basic and diluted share.

Allbirds said in a release that this decrease is primarily attributable to a decrease in average selling price, driven by promotional activity and a higher mix of third-party sales, and an estimated $1.2 million negative impact from foreign exchange.

These results still beat analyst expectations, however, which predicted the company would achieve $47.9 million in revenue with 0.24 per share in the period. The news also sent Allbirds stock rising nearly 12 percent after the bell. The stock has since come back down closer to the end of market day average.

Joey Zwillinger, co-founder and CEO of Allbirds, said in a statement on Tuesday that the company’s teams are “executing well” against its strategic transformation plan designed to reignite growth, improve capital efficiency and drive profitability.

“The dedication and hard work of our flock resulted in a quarter that demonstrated good progress on our strategic initiatives while exceeding our expectations,” Zwillinger said. “Our mission to create better things in a better way, guided by our Super Natural Comfort northstar, remains at the forefront of everything we do at Allbirds as we advance our vision to build a 100-year brand.”

These results mark the first quarter to include the efforts Allbirds has taken under its new strategic transformation plan. Announced in March, the plan includes initiatives to reignite the product line, fully transition the company’s footwear production to a new manufacturing partner in Vietnam, move toward a distributorship model in international markets and put the brakes on the brand’s retail rollout.

Allbirds said it incurred restructuring expenses of $3.2 million, or 6.0 percent of net revenue, as a result of executing the plan.

“We are really optimistic,” Zwillinger told FN in March. He added that “2023 will be a bit of a transition year” and the situation is not expected to turn around immediately. But by “recalibrating” its assortment to once again attract its core consumer, cleaning up the inventory and introducing some new marketing initiatives and partnerships later this year, the future looks much brighter.

Looking ahead, Allbirds is expecting net revenue in the second quarter of $64 million to $69 million, a decrease of 18 percent to 12 percent versus the same time last year.