Allbirds, Inc. reported a decline in financial performance for the first quarter of 2025, with net revenue falling to $32.1 million, down 18.3% from $39.3 million in the same period of 2024. The company's gross profit also decreased to $14.4 million, resulting in a gross margin of 44.8%, compared to 46.9% a year earlier. The net loss for the quarter was $21.9 million, an improvement from the $27.3 million loss reported in the prior year. Adjusted EBITDA loss also decreased to $18.6 million from $20.9 million, indicating a reduction in operational losses.
The decline in revenue was primarily attributed to a decrease in direct business sales, particularly from retail operations, which saw a drop of approximately $4.1 million due to store closures. Additionally, the transition to third-party distributors in international markets contributed to a revenue decrease of about $2.8 million. However, the company recognized $1.9 million in revenue from gift card breakage, reflecting a change in accounting estimates that positively impacted the financial results.
Operationally, Allbirds has been undergoing a strategic transformation, which included the closure of 15 stores in the U.S. and three in Europe during 2024, with an additional five closures in the first quarter of 2025. The company has shifted its international operations to a distributor model in several markets, including South Korea and Japan, which has affected its revenue streams. As of March 31, 2025, Allbirds operated 28 stores, down from 57 a year prior, reflecting its focus on optimizing its retail footprint.
Looking ahead, Allbirds aims to enhance brand awareness and customer acquisition while maintaining a commitment to sustainability. The company plans to invest in marketing initiatives to drive growth and improve customer engagement. Despite the current challenges, Allbirds remains focused on its long-term strategy of leveraging innovative materials and sustainable practices to differentiate its product offerings in a competitive market. The company believes that its existing cash reserves, along with cash flow from operations and available credit, will be sufficient to meet its financial obligations over the next year.
About Allbirds, Inc.
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