The Business of Fashion
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Allbirds’ sales fell 27 percent year over year to $52 million in the second quarter, but that was more than enough to keep the company within its previous guidance.
The embattled sneaker maker attributes its expected revenue slip to selling fewer units, although at higher prices, and 10 planned store closures during the quarter.
But new chief executive Joe Vernacchio — who replaced Joey Zwillinger in March and previously worked at Nike and The North Face — scored a win by narrowing Allbirds’ net loss to $19 million in the second quarter, down from $29 million in the same period a year earlier. The brand’s operating costs dropped 23 percent to $46 million as it reduced stock-based compensation and lowered its digital advertising spend. It also inked more international distribution deals, helping to decrease the costs of selling in regions like Canada, Australia and Asia.
The company is focused on returning to growth in 2025. In June, the footwear seller hired a new vice president of design, Jason Israel, who was previously global creative director at Salomon, to strengthen product development. Allbirds’ current plan has consisted of releasing updated versions of classic styles, including its Tree Runner this June, to re-engage consumers. Its planned release of a zero carbon shoe has yet to materialise. The brand will ramp up brand marketing in the second half of the year in preparation to introduce new products in 2025, Allbirds’ chief financial officer Annie Mitchell said on an earnings call on Wednesday.
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But Allbirds still expects full-year sales to fall between $190 million to $210 million. Investors responded favourably to the stability. Allbirds’ stock soared 12 percent in after-hours trading following the earnings release. But the company’s share price continues to sit below $1 as it faces a deadline to increase its stock by October or risk delisting.
Learn more:
Can Allbirds Survive Its Own Turnaround Plan?
An executive shakeup at the embattled sneaker seller adds a new layer of complexity as sales decline and losses widen.
