Allbirds’ revenue dropped 28 percent year over year to $39 million in the first quarter of the year as demand for its sneakers remains weak, the company reported on Wednesday.
It’s anticipating further sales slumps this year. The company’s revenue will likely drop as much as 25 percent year over year to $190 million in 2024.
The continued slowdown is to be expected for Allbirds amid a years-long plan to return to growth by 2025. But time is ticking for the embattled sneaker seller, which received a delisting notice from Nasdaq in April. It has six months from that date to trade at more than $1 for at least 10 consecutive days or risk being delisted, with a potential six months extension if it doesn’t meet that deadline.
Allbirds’ turnaround rests on the shoulders of former Nike executive Joe Vernachio, who replaced the company’s co-founder Joey Zwillinger as CEO in March. Thus far, its strategy to restore demand has been re-releasing classic styles, such as its Tree Runner and Wool Runner, in updated materials with a promise of improved durability. It also plans to launch a zero-carbon shoe this year.
Still, Allbirds has shown promise in improving its bottom line. The company decreased its operating costs by 16 percent year over year following a pullback in digital advertising and three store closures, with more to come later in the year. Its net losses dropped 22 percent year over year to $27 million. It expects its adjusted earnings before interest, taxes, depreciation and amortisation losses to drop as much as 23 percent to $60 million this year.
Investors appear optimistic by the company’s progress. Allbirds’ stock grew as much as 5 percent in after hours trading following its earnings release, but still trades far below $1.
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