Allbirds reported a loss in the second quarter, due to a 23 percent sales drop tied to planned store closures and international distributor transitions. Results were above guidance, but the footwear maker still reduced its revenue guidance for the year while maintaining its earnings guidance.

 Second Quarter 2025 Overview

  • Second quarter net revenue of $39.7 million, at the high end of the company’s guidance range ($36 million to $41 million), and a decrease of 23.1 percent versus a year ago.
  • Second-quarter gross margin declined 980 basis points to 40.7 percent versus a year ago.
  • Second-quarter net loss of $15.5 million, or $1.92 per basic and diluted share.
  • Second-quarter adjusted EBITDA loss of $12.6 million, above the company’s guidance range (loss between $16 million to $19 million).
  • Completed comprehensive financing package, including a new three-year $75 million revolving credit facility, consisting of a $50 million tranche and a $25 million accordion feature.
  • Inventory at quarter-end of $42.2 million, representing a decrease of 21.3 percent versus a year ago.
  • As of June 30, 2025, the company had $33.1 million of cash and cash equivalents and $5.0 million of outstanding borrowings under its $50.0 million revolving credit facility.

“Strong execution during the first half of the year has set us up for what’s ahead this fall,” said Joe Vernachio, CEO. “We are thrilled to be at the threshold of our product, marketing and customer experience initiatives coming together as we continue on our path to reigniting the Allbirds brand. In the weeks and months ahead, we’ll be delivering a continuous flow of modern lifestyle footwear that is distinctively Allbirds – modern design, unique materials and unmatched comfort. This debut, coupled with the operational and financial rigor we have embedded into the organization in recent years, gives us confidence in our expected return to top-line growth in the fourth quarter of this year.”

Second Quarter Operating Results
In the second quarter of 2025, net revenue decreased 23.1 percent to $39.7 million compared to $51.6 million in the second quarter of 2024. The year-over-year decrease is primarily attributable to our planned retail store closures and the transition of international distributors.

Gross profit totaled $16.2 million compared to $26.1 million in the second quarter of 2024, and gross margin declined 980 basis points to 40.7 percent compared to 50.5 percent in the second quarter of 2024. The decline in gross margin is primarily due to increased promotional activity, inventory adjustments primarily associated with the transition of the European market to a distributor, a higher mix of business from international distributors and a lower mix from retail stores, and increased per-unit freight and duty costs in our direct business.

Selling, general, and administrative expense (SG&A) was $24.2 million, or 60.9 percent of net revenue, compared to $33.6 million, or 65.0 percent of net revenue, in the second quarter of 2024. The decrease is primarily attributable to lower personnel expenses, occupancy costs, stock-based compensation expenses, and depreciation and amortization expenses.

Marketing expense totaled $8.5 million, or 21.5 percent of net revenue, compared to $11.7 million, or 22.8 percent of net revenue, in the second quarter of 2024. The year-over-year decrease was primarily driven by a decrease in digital advertising spend.

Net loss for the second quarter of 2025 was $15.5 million compared to $19.1 million for the second quarter of 2024, and net loss margin was 39.1 percent compared to 37.1 percent in the second quarter of 2024.

Adjusted EBITDA loss for the second quarter of 2025 improved to $12.6 million compared to a loss of $13.7 million in the second quarter of 2024, and adjusted EBITDA margin declined to (31.7) percent compared to (26.6) percent in the second quarter of 2024.

Six-Month Operating Results
Net revenue in the first half of 2025 decreased 21.0 percent to $71.8 million compared to $90.9 million in the first half of 2024. The year-over-year decrease is primarily attributable to planned retail store closures and our international distributor transitions, partially offset by gift card breakage revenue, resulting from a change in accounting estimate in the first quarter.

Gross profit in the first half of 2025 totaled $30.6 million compared to $44.5 million in the first half of 2025, while gross margin declined to 42.6 percent in the first half of 2025 versus 49.0 percent in the same period a year ago. The decline in gross margin is primarily due to increased promotional activity, a higher mix of business from international distributors and a lower mix from retail stores, increased inventory adjustments, and increased per-unit freight and duty costs in our direct business. These factors were partially offset by gift card breakage.

SG&A in the first half of 2025 was $49.4 million, or 68.8 percent of net revenue, compared to $73.3 million, or 80.6 percent of net revenue in the first half of 2024, with the decrease primarily attributable to decreases in personnel expenses, occupancy costs, depreciation and amortization, and stock-based compensation.

Marketing expense in the first half of 2025 totaled $20.5 million, or 28.6 percent of net revenue, compared to $19.5 million, or 21.4 percent of net revenue, in the first half of 2024, primarily driven by planned investments in the company’s new brand marketing campaign in the first quarter and partially offset by decreased digital advertising spend in the second quarter.

Net loss in the first half of 2025 was $37.4 million compared to $46.5 million in the first half of 2024, and net loss margin was 52.1 percent compared to 51.1 percent in the first half of 2024.

Adjusted EBITDA loss in the first half of 2025 was $31.2 million compared to a loss of $34.6 million in the first half of 2024, and adjusted EBITDA margin declined to (43.5) percent compared to (38.1) percent for the first half of 2024.

Balance Sheet Highlights
As of June 30, 2025, Allbirds had $33.1 million of cash and cash equivalents and $5.0 million of outstanding borrowings under its $50.0 million revolving credit facility. Inventories totaled $42.2 million, a 21.3 percent decrease from a year ago, which is in line with expectations.

2025 Financial Guidance
Allbirds is providing the following financial guidance for 2025, which includes approximately $20 million to $25 million of impact to revenue associated with the transition from a direct selling model to a distributor model in certain international markets and the closure of certain Allbirds stores in the U.S. This compares to prior guidance of $18 million to $23 million of impact.

Full Year 2025

  • Net revenue of $165 million to $180 million compared to previous guidance of $175 million to $195 million
    • U.S. net revenue of $132 million to $145 million
    • International net revenue of $33 million to $35 million
  • Adjusted EBITDA loss of $65 million to $55 million, in line with prior guidance

Third Quarter 2025

  • Net revenue of $33 million to $38 million
    • U.S. net revenue of $27 million to $31 million
    • International net revenue of $6 million to $7 million
  • Adjusted EBITDA loss of $20 million to $16 million

Image courtesy Allbirds