For the second quarter ended June 30, 2024, sports footwear brand Allbirds continued to tackle declining revenues amid an ongoing transformation plan that is now embarking on its next phase. While some positivity could be seen in narrowing losses for the period, which dropped to 19.1 million dollars from 28.9 million dollars in the same period of the year prior, net revenue took a 26.8 percent hit, falling to 51.6 million dollars compared to its previous 70.5 million dollars.
The decline was attributed to lower unit sales within the direct business, which had partially been offset by higher average selling prices, while international distributor transitions and planned retail store closures also impacted the final results. Still, CEO Joe Vernachio said that there had been “operational and financial progress” in the quarter due to the “strong execution against [the company’s] strategic transformation plan”, for which it will be entering the next phases focused on “making great product, telling compelling stories and providing customers with an engaging shopping experience”.
Further good news could be seen in the narrowing of Allbirds’ adjusted EBITDA, which reduced from a loss of 18.3 million dollars last year to 13.7 million dollars. This, however, contrasted a decline in gross profit, which fell from the prior 30.1 million dollars to 26.1 million dollars. The company’s restructuring expenses totalled one million dollars, remaining on par with Q2 of 2023.
Allbirds ups gross margin guidance as CEO expresses confidence
Looking ahead, Vernachio expressed optimism, stating in a release: “As we focus on reigniting our product and brand, we are encouraged by the strong consumer response to our recent new offerings. This makes us confident that our fresh, updated products coming to market beginning next year will build on that momentum. We believe the combination of elevated product, storytelling and customer experience in the coming quarters will position the business to return to top line growth in 2025 and enable us to build long-term shareholder value.”
The company has increased its full year 2024 gross margin guidance, which is now anticipated to be between 42 to 45 percent, while adjusted EBITDA is expected to come to a loss of 75 million to 63 million dollars, compared to its prior range for a loss of 78 million to 63 million dollars. Net revenue for the third quarter is expected to sit between 40 and 43 million dollars.
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