Direct-to-consumer (D2C) clothing and footwear retailer Allbirds on Tuesday (Aug. 8) posted “better-than-expected” second quarter earnings, amid decreases in average selling prices, currency exchange headwinds and an overall challenging macroeconomic environment. This comes as the San Francisco-based footwear brand continues to focus on transforming its business to drive growth.
According to Q2 results, the company posted net revenue of $70.5 million, and while it represented a 9.8% decrease year over year (YoY), it was a 3.8% increase compared to Q2 2021.
Additionally, the brand’s net loss totaled $28.9 million, while its adjusted pretax earnings were a loss of $18.3 million. On the upside, however, Allbirds’ inventories in the quarter decreased 24% YoY, at $92.8 million, representing the lowest level since Q2 2021.
The company also reported a reduction in its operating cash use in Q2, generating positive operating cash flow of $0.8 million compared to negative operating cash flow of $24.1 million a year ago.
“We gained traction across key benchmarks, including reducing inventory levels, lowering operating cash use and exercising cost control. Our teams are laser focused on the four key pillars under our plan, which has us on track to reignite growth, and improve capital efficiency with the goal of driving improved profitability,” Joey Zwillinger, co-founder and CEO of Allbirds, said in a news release.
As part of its restructuring plan, the company said it has reduced promotional activities, shifted production to a new partner in Vietnam and reinforced its distributorship model in international markets, resulting in projected net revenue of between $56 million and $61 million in Q3.
In other highlights, Allbirds launched the SuperLight collection, offering products which feature “an innovative midsole made of the company’s most lightweight and low-carbon foam to date,” the report noted.
As PYMNTS reported in March, the self-proclaimed ethical shoemaker has been struggling after going public in November 2021, with the company recording the first quarter of negative growth in its nearly decade-long history this year.
According Zwillinger, the company’s performance suffered last year as it lost its focus on its core business and placed excessive emphasis on non-core products, unintentionally alienating its loyal customer base in the process.
“We overemphasized products that extended beyond our core DNA,” Zwillinger acknowledged in an earnings call with analysts earlier this year.
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