Allbirds said it progressed on its transformation plan during its first quarter under the leadership of its new chief executive officer, Joe Vernachio.
For the first quarter, the San Francisco-based footwear company reported results in line with or better than its prior guidance. Q1 revenues dropped 27.6 percent to $39.3 million, in line with its guidance, and net loss was $20.9 million, or 18 cents per basic and diluted share, which beat its guidance range.
The earnings results beat expectations of analysts surveyed by Yahoo Finance, who were looking for a loss of 21 cents per share, though revenues fell short of the $39.61 million projected.
Allbirds stock was up more than 4 percent after markets closed and was trading at around 66 cents per share. Since its initial public offering in 2021, Allbirds’ stock has plunged more than 90 percent. In April, Nasdaq warned the shoe brand that had six months to raise its stock price to more than $1 dollar for 10 consecutive business days.
Vernachio, who assumed the CEO role in March after co-founder and former CEO Joey Zwillinger stepped down, said the company delivered “solid progress” in Q1 in line with its strategic transformation plan.
After several quarters of falling sales, Allbirds announced a business turnaround plan in March 2023 centered on revamping product, optimizing U.S. distribution and store profitability, re-evaluating its international strategy and improving cost savings. The brand, which was also challenged by an unsuccessful push into the activewear space, said it would refocus on core styles like the Wool Runner.
“The operational and financial rigor we’ve developed, and strong execution by our teams, enabled us to meet or exceed expectations on our key metrics,” Vernachio said in a statement. He called out recent successful product launches like the Wool Runner 2 and Tree Runner Go.
“Looking further ahead, as we continue to drive improvement in our cost structure and underlying operating model, we believe the business is on the right path to achieve long-term profitable growth and deliver shareholder value,” he added.
In the first quarter, Allbirds said it focused on innovative and iconic product, closed three underperforming stores, moved towards a distributor model in some international markets and cut costs.
The company said it plans to close 10 to 15 U.S. locations in 2024.
Allbirds reaffirmed its 2024 guidance, which projects net revenues of between $190 million to $210 million, with U.S. net revenues of between $150 million to $165 million. Gross margin is expected to be between 42 percent to 45 percent. Q2 revenues are expected to be between $48 million to $53 million, with adjusted EBITDA loss of between $20 million and $17 million.
