On August 7, 2024, Allbirds Inc (BIRD, Financial) released its 8-K filing for the second quarter of 2024. Allbirds Inc is a lifestyle brand that innovates with naturally derived materials to make footwear and apparel products in a better way, while treading lighter on the planet. Its primary source of revenue is from sales of shoes and apparel products, with the majority of the revenue derived from the United States.
Performance and Challenges
Allbirds Inc (BIRD, Financial) reported a net revenue of $51.6 million for Q2 2024, a decrease of 26.8% compared to $70.5 million in Q2 2023. Despite the decline, the revenue was within the company's guidance range and surpassed the analyst estimate of $50.52 million. The decrease in revenue was primarily due to lower unit sales, partially offset by higher average selling prices, within the direct business as well as international distributor transitions and planned retail store closures.
Net loss for the quarter was $19.1 million, or $0.12 per share, compared to a net loss of $28.9 million, or $0.19 per share, in Q2 2023. The adjusted EBITDA loss was $13.7 million, an improvement from the $18.3 million loss in the same period last year.
Financial Achievements
Gross margin improved significantly by 770 basis points to 50.5% from 42.8% in Q2 2023. This improvement was driven by lower freight and duty costs per unit and a decrease in inventory write-downs due to a healthier inventory composition. The company also reported a 42% decrease in inventory to $53.7 million, reflecting fewer units of on-hand inventory and a healthier overall composition.
Key Financial Metrics
Allbirds Inc (BIRD, Financial) ended the quarter with $87.2 million in cash and cash equivalents and no outstanding borrowings under its $50 million revolving credit facility. The company’s SG&A expenses were $33.6 million, or 65.0% of net revenue, compared to $46.2 million, or 65.6% of net revenue, in Q2 2023. Marketing expenses totaled $11.7 million, or 22.8% of net revenue, compared to $12.5 million, or 17.8% of net revenue, in the same period last year.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Revenue | $51.6 million | $70.5 million |
| Gross Margin | 50.5% | 42.8% |
| Net Loss | $19.1 million | $28.9 million |
| Adjusted EBITDA Loss | $13.7 million | $18.3 million |
Analysis and Outlook
Allbirds Inc (BIRD, Financial) has made significant strides in its strategic transformation plan, including closing 14 US stores to optimize distribution and transitioning to a distributor model for its international business. These efforts have contributed to improved gross margins and reduced SG&A expenses. The company is focusing on three main areas: making great products, telling compelling stories, and providing customers with an engaging shopping experience.
“We are pleased to report another quarter of operational and financial progress,” said Joe Vernachio, Chief Executive Officer. “As we focus on reigniting our product and brand, we are encouraged by the strong consumer response to our recent new offerings.”
Looking ahead, Allbirds Inc (BIRD, Financial) is reiterating its full-year 2024 guidance with net revenue expected to be between $190 million and $210 million. The company is also increasing its full-year gross margin guidance to 43% to 46% and tightening its adjusted EBITDA loss guidance to $75 million to $63 million.
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Explore the complete 8-K earnings release (here) from Allbirds Inc for further details.
