Allbirds Narrows Losses Despite 23% Q3 Sales Decline

Allbirds focuses on efficiency and product innovation and brand revival amid ongoing turnaround.

Allbirds, reported a narrowed adjusted operating loss year over year in the third quarter of 2025 despite a steep 23.3 percent decline in sales.

While earnings slightly exceeded expectations, sales came in line with guidance. The eco-conscious footwear brand also revised its full-year sales outlook and narrowed its earnings guidance as it continues to navigate transition initiatives.

Third Quarter Performance Overview

For the third quarter ended September 30, 2025, Allbirds’ net revenue totaled $33.0 million within its guidance range of $33 million to $38 million representing a 23.3 percent drop from a year earlier. Gross margin slipped by 120 basis points to 43.2 percent.

The quarter recorded a net loss of $20.3 million, or $2.49 per share, while adjusted EBITDA loss reached $15.7 million, outperforming the company’s projected loss range of $20 million to $16 million.

Inventory closed the quarter at $43.1 million, down 25 percent year over year, reflecting tighter inventory management. The company ended the quarter with $23.7 million in cash and cash equivalents and $12.3 million in borrowings under its $50 million revolving credit facility.

CEO Perspective on Turnaround Progress

Joe Vernachio, CEO of Allbirds, stated, “We’re pleased to deliver third quarter results in line with our expectations, highlighted by a robust flow of new product introductions many of which met with strong customer response. Entering the final months of the year, we will continue to support our product engine with compelling marketing content to capture consumer mindshare and reignite growth. Throughout the holiday season, we will be spotlighting gifting ideas and emphasizing Allbirds’ core principles of Comfort, Style and Sustainability.”

Vernachio added, “Our teams are focused on accelerating progress under our turnaround in the quarters ahead. At the same time, we are taking definitive steps to further reduce costs, enhance liquidity, and pursue value-creating opportunities.”

Third Quarter Operating Results

Net revenue declined 23.3 percent to $33.0 million from $43.0 million in the prior-year quarter, driven primarily by structural changes including international distributor transitions and planned retail store closures.

Gross profit was $14.2 million, down from $19.1 million, with gross margin down to 43.2 percent from 44.4 percent. The primary factors behind margin pressure were a higher proportion of digital and distributor channel sales and increased U.S. duties.

Selling, general, and administrative (SG&A) expenses fell to $21.7 million, or 65.7 percent of revenue, from $31.0 million, as the brand benefited from lower personnel and occupancy costs.

Marketing expense reached $11.7 million, representing 35.5 percent of revenue, up from $9.9 million last year, reflecting increased digital advertising around new product launches.

Nine-Month Financial Review

For the first nine months of 2025, net revenue totaled $104.8 million, down 21.7 percent from $133.9 million a year earlier. Gross profit declined to $44.8 million from $63.6 million, with margins dropping to 42.7 percent from 47.5 percent due to channel mix shifts and heavier promotions.

SG&A totaled $71.0 million, down from $104.2 million, while marketing spend increased to $32.3 million to support brand repositioning initiatives.

The company reported a nine-month net loss of $57.7 million compared to $67.6 million the prior year. Adjusted EBITDA loss improved to $46.9 million from $50.9 million.

Financial Position and 2025 Guidance

As of September 30, 2025, inventories decreased 25 percent to $43.1 million, aligning with Allbirds’ cost-control efforts.

For the full year, the company expects net revenue between $161 million and $166 million, revised downward from prior guidance of $165 million to $180 million.

Adjusted EBITDA loss is projected between $63 million and $57 million, showing modest improvement.

Fourth-quarter expectations point to net revenue of $56 million to $61 million and adjusted EBITDA loss of $16 million to $10 million.

Looking Ahead

Allbirds remains focused on executing its turnaround plan centered on sustainable innovation, disciplined cost management, and brand revitalization.

With a leaner structure and renewed emphasis on product and marketing, the company aims to regain momentum in 2026 while strengthening its market position as a sustainable footwear leader.