Allbirds Inc (NASDAQ:BIRD) stock slumped in premarket trading after the footwear retailer posted a decline in fourth-quarter 2022 sales due to “execution and macro challenges.”
The company, which uses naturally derived materials to make footwear and apparel products, reported revenue of $84.2 million for the three months to December 31, 2022, down 13% from a year earlier and the first time it’s failed to post year-over-year quarterly sales growth.
Its 4Q net loss widened to $24.9 million, or $0.17 per share.
“2022 marked the end of our first full year as a public company and while we made important progress, the year came to a challenging close, with results below our expectations due to both execution and macro challenges,” Allbirds co-founder and co-CEO Joey Zwillinger said in a statement. “We need to improve performance, and are announcing a new transformation plan to reinvigorate the business with an emphasis on profitable growth.”
For full-year 2022, Allbirds’ revenue came in 7% higher at $297.8 million due to an increase in the number of orders and higher third-party sales. It reported a net loss of $101.4 million, up from $45.4 million in 2021.
The company also announced a strategic transformation plan to reignite growth, as well as improve capital efficiency, and drive profitability.
The plan is focused on:
- Reigniting product and brand;
- Optimizing US stores and slow pace of openings;
- Evaluating transition of international go-to-market strategy; and
- Improving cost savings and capital efficiency.
The company noted that it reduced the carbon footprint of its top 10 products by 22% in 2022 compared to 2021.
“We founded Allbirds with a vision to create better products in a better way – and we are aligning our operational and financial execution with the strength of that vision,” Zwillinger added. “Our brand fundamentals remain strong, with best-in-class NPS and customers who look to us for our quality, comfort, design and sustainability.”
Separately, Allbirds announced the appointment of Annie Mitchell as its chief financial officer, effective April 24, 2023. She replaces Mike Bufano, who will be stepping down from Allbirds and will remain with the company through mid-May to ensure a smooth transition, the company said.
Allbirds' shares traded 22% lower at $2.36 in Friday pre-market trading.
Contact the author at stephen.gunnion@proactiveinvestors.com