Allbirds, a US-based leading footwear and apparel company, has reported a significant decline of 27.6 per cent in net revenue to $39.3 million for the first quarter of fiscal 2024 (Q1 FY24), compared to $54.4 million in the corresponding quarter of the previous year. This decline is largely attributed to reduced overall demand, alongside challenges stemming from international distributor transitions and a number of retail store closures.

Despite the drop in revenue, the company saw an improvement in gross profit margins, which rose by 680 basis points to 46.9 per cent from 40.1 per cent in Q1 FY23. However, gross profit itself decreased to $18.5 million from $21.8 million in the prior year, primarily due to fewer units sold. The margin improvement was largely due to reduced freight and product costs per unit, alongside a decrease in inventory write-downs thanks to a healthier inventory composition compared to last year, the company said in a press release.

Operating expenses showed a relative improvement. Selling, general, and administrative expenses accounted for 101.0 per cent of net revenue at $39.7 million, down from 78.7 per cent or $42.8 million in the first quarter of FY23. This decrease reflects reductions in stock-based compensation, personnel expenses, and occupancy costs.

Marketing expenditures also decreased, totalling $7.8 million or 19.7 per cent of net revenue, down from 21.1 per cent or $11.5 million in the previous year, driven by a cutback in digital advertising spend.

Net losses for Q1 FY24 were reported at $27.3 million, an improvement over the $35.2 million loss in Q1 FY23. The net loss margin worsened slightly, increasing to 69.5 per cent from 64.7 per cent. Adjusted EBITDA also showed a minor improvement with a loss of $20.9 million, improving 3.6 per cent from a loss of $21.7 million in the first quarter of the previous fiscal year. However, the adjusted EBITDA margin declined to minus 53.1 per cent from minus 39.8 per cent.

“We are pleased to begin the year with solid progress under our strategic transformation plan,” said Joe Vernachio, chief executive officer. “The operational and financial rigor we’ve developed, and strong execution by our teams, enabled us to meet or exceed expectations on our key metrics.”

Fibre2Fashion News Desk (DP)

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