By Davit Kirakosyan and Senad Karaahmetovic
Allbirds (NASDAQ:BIRD) shares are down over 20% in premarket Friday following the company’s reported Q4 results, with EPS of ($0.17) coming in worse than the consensus estimate of ($0.12).
Revenue fell 13.4% year-over-year to $84.2 million, missing the consensus estimate of $96.89M. This decrease is primarily attributable to a decrease in the number of orders, and an estimated $3.2M negative impact from foreign exchange.
“2022 marked the end of our first full year as a public company and while we made important progress, the year came to a challenging close, with results below our expectations due to both execution and macro challenges. We need to improve performance, and are announcing a new transformation plan to reinvigorate the business with an emphasis on profitable growth,” said Joey Zwillinger, co-founder and co-CEO.
The transformation plan focuses on these four key areas: (1) Reignite product and brand, (2) optimize U.S. stores and slow pace of openings, (3) evaluate transition of international go-to-market strategy, (4) improve cost savings and capital efficiency.
The company expects Q1/23 revenue in the range of $45M-$50M (down 20%-28% year-over-year), below the consensus estimate of $67.1M.
Furthermore, the company announced the appointment of Annie Mitchell as CFO, effective April 24, 2023. She will succeed Mike Bufano, who will remain with the company through mid-May to ensure a smooth transition.
The stock selloff extended into premarket Friday trading after at least two analysts downgraded BIRD stock. Baird analysts cut to Neutral with the price target of $2 per share.
"With major change in the product strategy, operating model, and leadership team on tap in an already uncertain macro backdrop, we are stepping to the sidelines until there are clearer signs of stabilization," the analysts wrote in a note.
Stifel analysts also cut the price target to $2 per share.
"Declines suggestive of brand issues, inventory excess, and the DTC model, makes 2023 visibility extremely challenging. New strategy and go to market structure for international markets holds promise to improve profitability but not until 2024. We model than $135mn cash burn through 2024. Without sightlines to profitability inflection, we see risk of dilutive capital raises, or balance sheet impairment. We reaffirm our HOLD rating," they wrote.