Allbirds Navigates Earnings Call with Cautious Optimism Amid Decline in Gross Margin and Store Closures

Allbirds, Inc. reported strong financial discipline and effective inventory management, but faced declining gross margins, store closures, and a conservative revenue outlook due to macroeconomic factors. The company exceeded adjusted EBITDA expectations and showcased innovative product launches and marketing strategies. Despite these positive developments, Allbirds' revised full-year revenue outlook reflects uncertainty in the macro environment.

Allbirds, Inc. (NASDAQ: BIRD) reported mixed financial results for the second quarter of 2025, with net revenue declining 23.1% year-over-year to $39.7 million. The company faced challenges such as store closures and distribution changes in Europe, leading to a significant decline in gross margin, which fell 980 basis points to 40.7%. Despite these setbacks, Allbirds managed to exceed adjusted EBITDA expectations and secured a new $75 million revolving credit facility.

The company's net loss narrowed by 19% to $15.5 million, and adjusted EBITDA loss improved to $12.6 million. Allbirds attributed the revenue decline to store closures and international market transitions, with a significant portion of the impact stemming from these factors. The company's revised full-year 2025 revenue guidance was lowered to $165-180 million, down from $175-195 million, reflecting uncertainty in the macroeconomic environment.

Allbirds' CEO, Joe Vernachio, expressed confidence in the company's ability to turn around its financial performance, citing upcoming product launches, marketing initiatives, and customer experience improvements. The company plans to deliver new products monthly and new marketing efforts weekly, starting in August 2025.

Despite the challenging quarter, Allbirds demonstrated strong financial discipline and effective inventory management, reducing inventory levels by 21.3% year-over-year to $42.2 million. The company's cost-cutting measures, including personnel and occupancy expenses, helped offset the top-line weakness.

Allbirds' revised full-year revenue outlook underscores the company's cautious approach to the uncertain macroeconomic environment. The company's ability to execute its turnaround strategy will be closely watched by investors and financial professionals. [1]

References:
[1] https://www.retaildive.com/news/allbirds-revenue-declines-lose-momentum-q3-lowers-full-year-guidance/757188/
[2] https://www.stocktitan.net/news/BIRD/allbirds-reports-second-quarter-2025-financial-pkfqf04ytoa9.html