BIRD · Allbirds, Inc.

Revenue declined 19.7% to $152.5 million in FY 2025 from $189.8 million in FY 2024, primarily due to the company's strategic shift toward a leaner operating model. This included optimization of the retail store fleet and a higher mix of digital and international distributor sales, which reduced direct U.S. sales volume. Management's focus on customer experience, including a redesigned website launch, supported this transition but could not offset the revenue headwinds from these changes. The decrease in gross profit, down 22.8% to $62.6 million, was driven by lower net revenue alongside cost of revenue dynamics, resulting in a gross margin of 41.0%. This contraction reflected the impact of channel mix shifts toward lower-margin digital and distributor channels, elevated duties, and reduced average selling prices in the U.S. market.

Despite these pressures, operating loss narrowed 18.0% to -$80.0 million from -$97.6 million, with operating margin at -52.4%. This improvement stemmed from aggressive cost restructuring, including reductions in personnel and rent expenses following store fleet optimizations. Net loss similarly improved 17.2% to -$77.3 million, with diluted EPS advancing to -$9.47 from -$11.87, underscoring disciplined expense management that mitigated the effects of revenue decline. These efforts demonstrate management's commitment to narrowing losses even as the business model evolves.

This strategic pivot hinges on completing an asset sale, as failure to do so would impair meeting future liquidity needs without additional capital or transactions outside management's control. Growth within the existing customer base depends on refining product strategy to match preferences, while scaling website traffic or orders would require further technology investments. These dynamics position Allbirds at a critical juncture, balancing cost efficiencies against persistent unprofitability and execution risks.