Allbirds stock plummets after shoe brand deteriorates fast

S.F. firm pauses store openings as it tries to cut costs

Allbirds sold investors on a growth story when the San Francisco sneaker brand went public less than 18 months ago. Those sales gains disappeared in the fourth quarter, tanking its stock.

Revenue in the three months through December sank 13% to $84.2 million, trailing the average analyst of $96.7 million. Joey Zwillinger, the company's cochief executive officer and co-founder, said Allbirds, which makes shoes from wool and eucalyptus, tried to win over more younger consumers and runners, but those products missed expectations.

“We just didn't see the sell-through on those franchises

that we would've hoped for, and that came at the expense of that core franchise,” Zwillinger said in an interview. “We took our eye off the ball a little bit.”

The shares closed Friday at $1.25, down $1.11, or 47.03%. The stock had already fallen more than 80% since an initial public offering in November 2021 to a

market value of less than $350 million.

The company's forecast for the current quarter also missed. Sales will be as much as $50 million — the average analyst estimate is $67 million. And the company could report a loss as wide as $29 million before interest, taxes, depreciation and amortization during the period — almost triple Wall Street's expectations.

The results and forecast indicate that the “business has deteriorated quickly,” said William Blair analyst Dylan Carden. To put the company back on the right track, it looks like there will be “a prolonged period of restructuring, revenue declines and cash burn,” Carden said in a research note.

Allbirds announced a cost-cutting plan that includes pausing store openings — one of the pillars of the growth strategy it pitched to investors. Chief Financial Officer Mike Bufano will also step down, effective April 24. He'll be succeeded by Annie Mitchell, who comes from athleticwear brand Gymshark and previously worked at Adidas.

“We know we disappointed in 2022,” the company said to begin an investor presentation. “Deci

SARAH REINGEWIRTZ — SOUTHERN CALIFORNIA NEWS GROUP Allbirds went public less than 18months ago and has had its stock drop more than 80% since November 2021. The company's forecast for the current quarter is expected to miss expectations.

ALLBIRDS Allbirds, which makes shoes with natural fibers, was part of a surge in direct-to-consumer brands that both make goods and retail them through their own websites and stores.