Allbirds Q2 sales down almost 10 percent, but beats expectations

Allbirds has reported net revenue of 70.5 million dollars in the second quarter ended June 30, down 9.8 percent from a year earlier, but up 3.8 percent from two years ago.

The San Francisco-based company, which went public in 2021, attributed the year-on-year drop primarily to a decrease in average selling price driven by promotional activity, as well as an estimated 0.7 million dollar negative impact from foreign exchange (FX).

On a brighter note, the 9.8 percent drop in revenue was less severe than anticipated - it was expecting a decrease of between 12 percent and 18 percent.

The company also managed to slightly narrow its Q2 net loss to 28.9 million dollars from 29.4 million dollars a year earlier.

It made an adjusted EBITDA loss of 18.3 million dollars, compared to a loss of 20.8 million dollars the prior year.

It comes after the company announced a transformation plan in March after posting weaker than expected results at the end of its first full year as a publicly traded company.

The strategy focuses on four key points: to optimise its US stores and slow the pace of openings; to “reignite” product and brand; to evaluate the transition of its international go-to-market strategy; and to improve cost savings and capital efficiency.

Commenting on the Q2 results, co-founder and CEO Joey Zwillinger said: “We are pleased to report another quarter of solid progress against our strategic transformation plan.

“Most notably, we gained traction across key benchmarks, including reducing inventory levels, lowering operating cash use, and exercising cost control.”

Looking ahead, the company expects third-quarter net revenue of between 56 million dollars and 61 million dollars, which would represent a year-on-year drop of between 16 percent and 23 percent.

It expects an adjusted EBITDA loss of between 20 million dollars and 23 million dollars.

Allbirds launched in 2016 as a footwear brand before expanding into apparel. It is known for its use of regenerative and natural materials including FSC-certified eucalyptus tree fibre and SweetFoam, a proprietary innovation made with sugarcane.