Allbirds, Inc. Q1 FY2024 earnings call

• Strategic transformation plan pillars include reigniting product and brand, optimizing U.S. distribution and store profitability, transitioning to a distributor model in international markets, and improving cost and capital efficiency. • Introduced the Tree Runner Go, a new addition to the runner franchise with positive consumer feedback. • Closed 3 U.S. stores in Q1 and plans to close 10-15 more this year. • Made progress in international distributor transitions with Canada and South Korea transitioning in Q3 last year, and Japan, Australia, New Zealand on track to transition in the next 2 months. • Focus on cost discipline with COGS savings from factory shifts and materials innovation, and operating expense savings from workforce reductions, international transitions, and store closures.

In the first quarter, revenue totaled $39 million. Gross margin was 46.9%, which is a 680 basis point expansion year-over-year. U.S. revenue for the full year is expected to be $150 million to $165 million, and international revenue is expected to be $40 million to $45 million. The Q1 revenue was impacted by lower demand, return to full price selling, international distributor transitions, and retail store closures.

• Full year revenue expected $190 million to $210 million. • Gross margin expected 42% to 45%. • Adjusted EBITDA loss expected $78 million to $63 million. • Q2 revenue expected $48 million to $53 million, adjusted EBITDA loss $20 million to $17 million. • Revenue includes U.S. $35 million to $37 million and international $13 million to $16 million.

• Forward-looking statements involve risks and uncertainties that could cause actual results to differ. • Impact of external headwinds on financial outlook. • Challenges related to inventory position and distribution model transitions.

Q: Talked about Wool Runner 2 and Tree Runner Go, any learnings?

A: Tree Runner Go is important for icon strategy, no cannibalization seen, early sign long-term strategy is right.

Q: Marketing support for back half of year?

A: Overall marketing spend expected down, but will invest in upper funnel as new products launch later.

Q: KPIs for turnaround?

A: Full price selling is key KPI, watching closely as returning to full price with new products.

Q: Confidence in topline growth next year?

A: Q2 and Q3 similar to Q1 year-over-year, Q4 expected uptick with product introductions and marketing support.

Q: CapEx for year?

A: CapEx extremely minimal as stopped opening new stores.

Q: International owned stores?

A: Will continue to operate stores in U.K. and evaluate potential in EU with distributor model.

Q: Cost structure and leverage?

A: SG&A down vs prior year, benefit from workforce reductions, store closures, and zero OpEx in transitioned international regions.