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Allbirds, Inc. (BIRD)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue of $33.0M declined 23.3% YoY, gross margin fell 120 bps to 43.2%, and net loss per share was $2.49; adjusted EBITDA loss was $15.7M, slightly better than guidance despite revenue landing at the low end of the range .
  • Versus S&P Global consensus, revenue missed ($34.25M*) while EPS beat (-$2.66*), as mix shift to digital/distributors and higher duties pressured top line and margin, while tight SG&A delivered a slightly better bottom line .
  • FY25 guidance narrowed: revenue cut to $161–$166M (prior $165–$180M) and adjusted EBITDA loss tightened to $(63)–$(57)M; Q4 guide introduced at $56–$61M (flat to +9% YoY), signaling an expected top-line inflection on new product momentum .
  • Liquidity remains a focal point: cash $23.7M with $12.3M drawn on $50M ABL; management is “exploring options to improve our liquidity,” including potentially raising capital—an important stock narrative catalyst alongside Q4 execution and gross margin trajectory .

What Went Well and What Went Wrong

  • What Went Well

    • New product cadence resonated: Wool Cruiser, Waterproof collection, and Relaxed/Slipper launches were cited as standout performers; “the products we’ve introduced over the past several quarters are the strongest…since the early days of the brand” .
    • Cost discipline: SG&A down ~30% YoY in Q3 to ~$22M, helping adjusted EBITDA loss land slightly ahead of guidance despite lower revenue .
    • Sequential setup into Q4: Management expects flat to HSD growth in Q4, supported by continued drops and a more favorable structural headwind as distributor/store transition impacts diminish .

  • What Went Wrong

    • Legacy franchises lagged: the Original Runner and other core franchises were “slower to rebuild,” weighing on Q3 sales which came in at the low end of guidance .
    • Mix and duties pressured margin: higher digital/distributor mix and increased U.S. duties offset higher ASPs; gross margin declined 120 bps YoY to 43.2% .
    • Macro distraction and competitive holiday: management cited consumer distraction and plans to be promotional for BFCM, acknowledging a highly competitive environment .

Financial Results

Quarterly P&L and margins (oldest → newest):

MetricQ1 2025Q2 2025Q3 2025
Revenue ($M)$32.114 $39.685 $32.989
Gross Margin %44.8% 40.7% 43.2%
Net Loss ($M)$(21.875) $(15.501) $(20.324)
Net Loss per Share ($)$(2.73) $(1.92) $(2.49)
Adjusted EBITDA ($M)$(18.644) $(12.572) $(15.730)
Adjusted EBITDA Margin %(58.1)% (31.7)% (47.7)%
SG&A ($M)$25.212 $24.156 $21.678
Marketing Expense ($M)$12.018 $8.525 $11.719

Q3 actual vs S&P Global consensus:

MetricConsensus*ActualSurprise
Revenue ($M)$34.25*$32.989 $(1.26)M (~-3.7%)
Primary EPS ($)$(2.66)*$(2.49) +$0.17

Values retrieved from S&P Global.

Segment revenue (by geography):

Segment Revenue ($M)Q1 2025Q2 2025Q3 2025
United States$25.625 $28.649 $25.586
International$6.489 $11.036 $7.403
Total$32.114 $39.685 $32.989

Operational KPIs:

KPIQ1 2025Q2 2025Q3 2025
Inventory ($M, end of period)$42.873 $42.243 $43.127
Cash & Cash Equivalents ($M)$39.056 $33.144 $23.704
Outstanding Borrowings ($M)$0.0 $5.0 $12.3
Total Stores (Count)28 24 23

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenue ($M)FY 2025$165–$180 $161–$166 Lowered & narrowed
U.S. Net Revenue ($M)FY 2025$132–$145 $127–$131 Lowered
International Net Revenue ($M)FY 2025$33–$35 $34–$35 Maintained to slightly higher mix
Adjusted EBITDA ($M)FY 2025$(65)–$(55) $(63)–$(57) Tightened around midpoint
Net Revenue ($M)Q4 2025N/A$56–$61 Introduced
U.S. Net Revenue ($M)Q4 2025N/A$47–$51 Introduced
International Net Revenue ($M)Q4 2025N/A$9–$10 Introduced
Adjusted EBITDA ($M)Q4 2025N/A$(16)–$(10) Introduced

Q3 2025 actual vs prior Q3 guidance:

MetricQ3 Guidance (from Aug)Q3 ActualResult
Net Revenue ($M)$33–$38 $32.989 At low end
Adjusted EBITDA ($M)$(20)–$(16) $(15.730) Slight beat

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 & Q-1)Current Period (Q3 2025)Trend
Product engine/launches19 new styles planned; Tree Runner NZ/Cruiser; Remix/circularity pipeline; website/store refresh Wool Cruiser (19 colors, Pantone), Waterproof collection, Slipper/Kiwi launches; strongest product in years Improving
Marketing cadenceScaling from 5–10 to 100+ assets/month; “Cards on the Table” driving awareness Shift to mid/lower funnel; influencers, PR, celebrity seeding; cultural relevance focus Improving
Supply chain/tariffsScenario planning for Vietnam tariffs; aim mid‑40s gross margin FY Expect full-year margin similar to Q3 (low 40s), citing mix and duties Manageable headwind
Intl distributor transitionsEU transition completed; structural headwind $20–$25M FY Headwind $23–$25M; transitions complete; new distributors added Diminishing impact
Store optimizationOngoing closures; U.S. stores down to ~21 by Q2 Total stores 23; closed one U.K. store in Q3 Stabilizing
Liquidity/financingNew $75M facility ($50M tranche + $25M accordion); cash $33.1M Q2 Cash $23.7M, $12.3M drawn; “exploring options to improve liquidity,” including potential capital raise Tightening, proactive actions
Wholesale strategyBegin selling into specialty accounts for Spring ’26 Expect ~150 specialty doors in U.S. for Spring ’26 Ramping into 2026

Management Commentary

  • “It’s undeniable that the products we’ve introduced over the past several quarters are the strongest we’ve delivered since the early days of the brand.” – CEO Joe Vernachio .
  • “For the full year, we anticipate the channel mix and tariff impacts will result in a full-year margin profile similar to Q3, in the low 40s.” – CFO Annie Mitchell .
  • “We are taking steps to reduce costs and recognize the need to enhance liquidity, which could include raising capital. We will consider all opportunities to maximize shareholder value.” – CEO Joe Vernachio .
  • “Q3 adjusted EBITDA loss totaled $15.7 million… Our strong gross margin profile and strict cost control enabled us to deliver bottom-line performance slightly above the high end of our guidance range, despite top-line results that came into the low end.” – CFO Annie Mitchell .

Q&A Highlights

  • Quarterly sales cadence and Q4 inflection: New products performing ahead of plan, legacy Runner still lagging, and macro distractions on consumers; structural headwinds from closures/distributor transitions fade to ~$2–$4M in Q4, supporting flat to +9% guidance .
  • Inventory and holiday strategy: Inventory lean at ~$43M; rigorous BFCM plan and willingness to promote—“we’re not going to be precious…we need to compete” .
  • Liquidity outlook: Higher operating cash use in Q3 due to marketing and seasonal working capital; exploring options to bolster liquidity .
  • 2026 setup: Product momentum and reduced structural drags underpin optimism into 2026; specialty wholesale to ~150 doors planned for Spring ’26 .

Estimates Context

  • Q3 2025 vs S&P Global consensus: Revenue $32.99M vs $34.25M* (miss); EPS $(2.49) vs $(2.66)* (beat). Number of estimates: revenue 2, EPS 3 .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Liquidity is the swing factor: with $23.7M cash and $12.3M drawn on ABL, management’s openness to raising capital is a central stock narrative; monitor capital markets actions and covenant headroom .
  • Q4 execution bar: The guide for flat to +9% YoY hinges on sustained new product sell-through and effective promotions; watch BFCM traction and December cadence .
  • Gross margin watch: Mix shift and duties held GM to 43.2% in Q3; CFO sees full-year in low 40s—any upside from lower COGS on new products/pricing could be a lever to surprise .
  • Cost control credible: SG&A reductions have supported better-than-expected adjusted EBITDA despite revenue softness; continuity here supports downside protection .
  • Structural headwinds abating: Distributor transitions and store closures are largely complete, reducing sequential drag into Q4 and 2026 .
  • 2026 wholesale channel: Initial specialty retail rollout (~150 doors) can broaden reach/brand awareness; track order book and door count progression .
  • Estimates likely to tighten: Lowered FY revenue range and a Q4 inflection outlook should drive recalibration of top-line estimates; EPS may benefit from operating discipline even if revenue lags .

Additional Q3 Context: Product & Distribution Press Releases

  • Wool Cruiser expanded to 19 colors with Pantone-curated hues; design/material story central to brand positioning .
  • First-ever fully waterproof wool sneakers launched Sept 30 (PFAS-free DWR, waterproof membrane), broadening utility offering .
  • Remix collection introduced, upcycling foam/textile waste into new silhouettes via Blumaka and Circ partnerships .
  • New distributor agreements across Eurasia expand profitable international model .

Values retrieved from S&P Global.