Allbirds, Inc. Q3 FY2025 earnings call

• Product progress: Introduced new products like Wool Cruiser, waterproof collection, slipper collection, and Kiwi collection. While new products are performing well, some core franchises like the original runner are slower to rebuild. • Marketing efforts: Shifted to mid- and lower-funnel marketing, partnering with influencers, and strategic brand activations. • Customer experience: Relaunched website, redesigned post-purchase experience, and delivered fresh floor sets in retail stores. • Wholesale strategy: Anticipate 150 specialty retail stores in the US for spring 2026, and sales meeting for fall 2026 was well received.

Third quarter net revenue totaled $33 million, coming in at the low end of the guidance range. Gross margin in Q3 was 43.2% compared to 44.4% in Q3 2024. Q3 adjusted EBITDA loss was $15.7 million compared to a loss of $16.2 million a year ago. Inventories totaled $43 million at quarter end, down 25% year-over-year.

• Full year net revenue expected between $161 million and $166 million (includes impact from international distributor transitions and retail store closures). • Fourth quarter net revenue guidance $56 million to $61 million (flat to up 9% vs prior year). • Full year adjusted EBITDA range tightened to negative $63 million to $57 million. • Fourth quarter adjusted EBITDA loss expected in the range of $16 million to $10 million, a significant improvement from $19 million a year ago.

• Macro environment distractions affecting consumer behavior, particularly with 60% of sales on mobile phones. • Competitive holiday shopping period. • Need to enhance liquidity, which could include raising capital.

Q: Third quarter sales results came in on the low end of expectations. What kind of disappointed or came in lower than thought?

A: It's a tale of three things: new product is working but core franchises like the runner haven't inflected yet, macro environment distractions are affecting consumer behavior, and when there are macro events, consumers are more considered in purchases.

Q: Can you add color around inventory composition and Black Friday strategy?

A: Inventory ended the quarter at $43 million, down 25% year-over-year due to international transitions and strong inventory management. For Black Friday, they plan to be competitive with promotions, having a rigorous plan to execute against the marketplace to avoid losing share.