“We are pleased to deliver third quarter results within our expectations as we continue to advance our three strategic focus areas. Our teams are delivering strong execution across the board and we are energized by the opportunity ahead as we prepare to bring our reignited product to market in 2025”, commented Joe Vernachio, Chief Executive Officer at Allbirds.

Third Quarter Results

Allbirds reported a 24.9% decline in net revenue in the third quarter of 2024 to 43.0 million US dollars, compared to 57.2 million US dollars in the same period last year. This drop was primarily driven by lower unit sales. However, higher average selling prices in the direct business partially offset lower product sales. This also reflects the expected impact of international distributor transitions and planned retail store closures.

Despite the revenue decline, the company's third quarter gross profit reached 19.1 million US dollars, with the gross margin improving slightly to 44.4%from 43.5% in the third quarter of 2023. The margin increase was attributed to reduced freight, duty and warehouse costs and fewer inventory write-downs, reflecting a healthier inventory position.

Operating expenses showed an improvement, with selling, general and administrative costs dropping to 72% of net revenue, down from 76.1% in the same quarter last year. Lower personnel expenses, lower depreciation, lower stock-based compensation and occupancy costs drove the decrease. Marketing expenses remained a significant expenditure, totalling 22.9% of net revenue.

Allbirds’ net loss narrowed to 21.2 million from 31.6 million US dollars in the third quarter of 2023, improving the net loss margin to 49.3% from 55.2%. Adjusted EBITDA loss also improved to 16.2 million, as compared to 19.0 million US dollars in the same period last year. However, the adjusted EBITDA margin worsened to negative 37.8% from negative 33.1%.

Fiscal 2024 Outlook

Allbirds revised its financial outlook for 2024, lowering its revenue guidance to a range of 187 million to 193 million US dollars, down from the forecasted range of 190 million to 210 million US dollars. This adjustment reflects the anticipated impact of store closures and international transitions.

Geographically, US net revenue is expected to be in the range of 143 million to 147 million US dollars, with an estimated 10 million to 12 million US dollars hit due to store closures. In international markets, the company projects a net revenue in the range of 44 million to 46 million US dollars, including a 13 million to 16 million US dollars reduction from the shift to a distributor model in specific markets.

The company also narrowed its adjusted EBITDA loss guidance to between 71 million to 75 million US dollars, as compared to the prior range of 63 million to 75 million US dollars. Despite these adjustments, Allbirds remains committed to its gross margin forecast, maintaining the 43% to 46% guidance for the full fiscal year.

New Distribution Agreements for Europe and Latin America

Allbirds has signed with distributors in Europe and Latin America as the brand continues transitioning towards its new international distributor model. These agreements will be effective as of the 1st of July 2025.

Annie Mitchell, Chief Financial Officer at Allbirds, expressed enthusiasm about the new agreements: “After a year of successful transitions to a distributor model in five of our key geographies, plus the addition of four new regions, we are pleased to be adding the expertise of Chris Sports and Wystam to our portfolio of global distributors. Together, we believe we can drive significant growth and brand value across these two important regions for our business”.