Allbirds, Inc. Q3 FY2024 earnings call

Product - Returning to core tenets of comfort and versatility, launching new products like Tree Glider, Lounger Lift, and planning new offerings for 2025. Bringing back Tree topper, introducing corduroy to runner franchise, and rugged versions of water repellent collections. - Marketing - Reintroducing the brand with 'Allbirds by Nature' narrative, partnering with OBB Media for premium digital content series, and planning middle funnel initiatives and PR activations. - Store Closures - Completed 15 US store closures in 2024, with two closures in Q3 and one shortly after. - International Distributors - Secured two additional distributor agreements in Q3 and early October, covering six countries in Latin America and six in Mainland Europe starting mid-2025. - Sustainability - Achieved 22% reduction in per unit carbon footprint, and M0.0NSHOT Zero was on Time Magazine's Best Inventions list.

In the third quarter, net revenue totaled $43 million. For the full year 2024, net revenue is expected to be between $187 million and $193 million. U.S. net revenue is projected to be between $143 million to $147 million, including a $10 million to $12 million impact from store closures. International revenue is expected to be between $44 million and $46 million, with $13 million to $16 million impact from distributor transitions. Gross margin expanded 90 basis points in Q3 to 44.4% and is expected to be in the range of 43% to 46% for the full year.

Full Year - Net revenue expected between $187M - $193M. - Gross margin outlook maintained at 43% - 46%. - Adjusted EBITDA loss range revised to $75M - $71M. ### Q4 - Net revenue expected $53M - $59M. - U.S. revenue $45M - $49M, International $8M - $10M. - Adjusted EBITDA loss range $25M - $21M, below year-ago levels.

Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially. Refer to SEC filings, including Form 10-Q, for detailed risk factors.

Q: How does the Q4 revenue decline compare to previous expectations, and what's the outlook for return to growth in 2025?

A: Delta is due to timing of marketing expense, additional store closures, and better inventory position. Growth expected in back half of 2025 with new product launches and marketing efforts.

Q: Can you dig into inventory composition and SG&A outlook?

A: Inventory has less legacy product than last year, in good in-season and transit composition. SG&A has improved with store closures, distributor transitions, but still high; expect further benefits from distributor transitions and no more store closures this year.

Q: Is $11M quarterly cash burn appropriate, and what's the glide path for cash burn?

A: $11M is in line with expectations, with small uptick in back half of 2025 as new products are bought, but cash usage run rate is manageable; gross margin mid-40s for remainder of 2024, expected improvement in 2025 with new product line