San-Francisco based company Allbirds makes shoes and activewear out of of New Zealand merino wool. Gabby Jones/Bloomberg via Getty Images
San-Francisco based company Allbirds makes shoes and activewear out of of New Zealand merino wool. Gabby Jones/Bloomberg via Getty Images
Allbirds has taken a big hit to sales and profitability this year.
The San Francisco-based and Nasdaq-listed company makes shoes and clothing out of New Zealand merino wool. It suffered a 13.4 per cent drop in revenue to US$54.4 million in the first three months of this year, compared withthe same period last year.
Its net loss widened to US$35.2m from a US$21.9m loss a year ago, as it discounted more products to sell them, wrote down old stock, transitioned its manufacturing and restructured the business.
“Our teams are executing well against our strategic transformation plan designed to reignite growth, improve capital efficiency and drive profitability,” co-founder and chief executive Joey Zwillinger said in a written statement.
Allbirds was founded by New Zealander and former All White Tim Brown (left) and Joey Zwillinger, now chief executive.
“The dedication and hard work of our flock resulted in a quarter that demonstrated good progress on our strategic initiatives while exceeding our expectations.”
The company warned sales would keep falling in the current quarter, by between 12 and 18 per cent on a year ago to a range of US$64m to US$69m, a forecast unlikely to put wind beneath its share price which is down 39 per cent year to date.
Allbirds ($BIRD) implemented a strategic transformation in March this year, “designed to reignite growth” and “reconnect with core consumers”, Zwillinger said.
In July last year, he raised concerns about a slowdown in consumer spending and laid off 8 per cent of the workforce in preparation.
Allbirds' Nasdaq performance.
The transformation plan included slowing the pace of store openings after opening 20 new shops in the past year, and evaluating its distribution partners in countries outside the United States.
On an earnings call with analysts today, Zwillinger said the company had a “laser focus on cash” and was targeting improved margins by 2024.
It had US$143.3m of cash and US$109.5m worth of stock on hand at the end of March, and had increased its debt facility with US bank J.P. Morgan to US$50m, with an extra US$50m headroom and a 2026 maturity.
