Allbirds, the sustainable shoe and apparel company, reported its Q4 results on Thursday, March 9, with revenue falling 13.4% year-over-year to $84.2 million, missing the consensus estimate of $96.89M. As a result, the company’s shares (NASDAQ:BIRD) dropped over 20% in pre-market trading on Friday, March 10.
The revenue decrease is primarily due to a decrease in the number of orders, and an estimated $3.2M negative impact from foreign exchange. Allbirds’ EPS also came in worse than the consensus estimate of ($0.12), at ($0.17).
H2: Allbirds announces new transformation plan
Joey Zwillinger, co-founder and co-CEO of Allbirds, acknowledged the challenging year and Q4 results, saying “We need to improve performance, and are announcing a new transformation plan to reinvigorate the business with an emphasis on profitable growth.”
The transformation plan focuses on four key areas: Reigniting the product and brand, optimizing U.S. stores and slowing the pace of openings, evaluating the transition of the international go-to-market strategy, and improving cost savings and capital efficiency.
H2: Reigniting the product and brand
The first key area of the transformation plan is to reignite the product and brand. Allbirds plans to do this by investing in product innovation and design, as well as enhancing the customer experience across all channels.
Allbirds has gained popularity for its sustainable and eco-friendly products, but faces competition from other sustainable brands. By investing in product innovation and design, Allbirds can continue to differentiate itself from its competitors and maintain its position as a leader in sustainability.
H2: Optimizing U.S. stores and evaluating international strategy
The second key area of the transformation plan is to optimize U.S. stores and slow the pace of openings, while evaluating the transition of the international go-to-market strategy. Allbirds plans to do this by improving store productivity and profitability, while also evaluating its international strategy to ensure it aligns with the company’s overall goals.
Allbirds currently has 27 stores across the U.S., and the company plans to focus on optimizing these stores rather than opening new ones. By improving store productivity and profitability, Allbirds can increase its revenue and improve its financial performance.
H2: Improving cost savings and capital efficiency
The final key area of the transformation plan is to improve cost savings and capital efficiency. Allbirds plans to do this by streamlining its operations and optimizing its supply chain, as well as prioritizing investments that drive long-term growth and profitability.
By improving cost savings and capital efficiency, Allbirds can improve its financial performance and position itself for long-term success.
Allbirds’ Q4 results and revenue miss have led to a drop in the company’s shares, but the company is taking steps to improve its performance and drive profitable growth. The new transformation plan focuses on reigniting the product and brand, optimizing U.S. stores and evaluating the international strategy, and improving cost savings and capital efficiency.