Allbirds announced on Wednesday said net revenue decreased 21.2% to $57.2 million during the third quarter, as the footwear firm grappled with an increase in promotional activity, and a decrease in units sold.
The San Francisco-based company said sales for the three months ending September 30 were also adversely impacted by an estimated $0.8 million, as a result of the transition from a direct selling model to a distributor model in South Korea and Canada in September.
Coinciding with the lacklustre sales performance, Allbirds clocked a net loss of $31.6 million, or $0.21 per basic and diluted share, widening from a loss of $25.2 million in the prior-year period.
“Our third quarter results reflect another quarter of solid execution under our Strategic Transformation Plan,” said Joey Zwillinger, co-founder and CEO.
“We made important progress on our key benchmarks of inventory reduction, operating cash use, and cost control, resulting in adjusted EBITDA ahead of our expectations. We also meaningfully advanced our strategy to transition from a direct distribution model to third-party distributors in key international markets. Nearing the end of our first year of transformation, our path remains clear and we are operating with discipline to deliver profitable growth and build shareholder value over the long term.”
Subsequent to the close of the third quarter, Allbirds said it had entered into a non-binding letter of intent with a distributor partner in Japan, as well as a distributor partner in Australia/New Zealand. The transitions are expected to be finalized in mid-2024, said the company, without revealing specific deals.
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