Allbirds Inc. (BIRD) shares experienced a significant decline of over 14% in the after-hours session on Wednesday. The popular footwear and apparel maker reported an alarming drop of more than 20% in its quarterly revenue. This decrease can be attributed, in part, to lower prices and increased promotional activity.
During the quarter, Allbirds incurred a loss of $31.6 million, or 21 cents per share, which is consistent with Wall Street expectations. By comparison, the company reported a loss of $25.2 million, or 17 cents per share, in the third quarter of 2022. The decline in sales was also prominent, with revenue falling by 21% to $57.2 million. Allbirds sold fewer items, and the average selling price was impacted by the increased promotional efforts.
Analysts had anticipated a revenue figure of $59 million for the quarter, slightly higher than what was reported. Additionally, Allbirds faced a revenue hit of approximately $800,000 as it transitioned from a direct selling model to a distributor model in South Korea and Canada in September.
Looking ahead to the fourth quarter, Allbirds provided a sales outlook between $66 million and $72 million. This projection indicates a decline of 22% to 15% compared to the fourth quarter of 2022. The FactSet consensus for the quarter stands at $79.7 million.
Despite these challenges, Allbirds remains committed to delivering high-quality footwear and apparel products to its customers. The company will focus on implementing strategies that drive growth and regain momentum in the market.
Allbirds Inc. faces a significant drop in quarterly revenue due to lower prices and increased promotions. The transition from a direct selling model to a distributor model in South Korea and Canada also contributed to the decline. As the company sets its sights on the future, Allbirds aims to overcome these obstacles and restore its sales performance.