Core Insights - Allbirds reported Q2 2025 results that exceeded Wall Street expectations for both GAAP revenue and earnings per share, with GAAP net revenue of $39.7 million and a GAAP loss per share of $1.92, although revenue fell 23.1% year-over-year [1][2] - The company lowered its full-year 2025 net revenue outlook to $165–$180 million, citing ongoing business transformation and slower-than-expected sales recovery [1][10] Financial Performance - GAAP revenue for Q2 2025 was $39.7 million, down from $51.6 million in Q2 2024, representing a 23.1% decline [2] - Gross margin decreased to 40.7% from 50.5% year-over-year, attributed to increased promotional activity and inventory write-downs [2][6] - Adjusted EBITDA loss improved to $12.6 million from a loss of $13.7 million in Q2 2024 [2][8] - Inventory levels decreased by 21.3% to $42.2 million [2] Business Strategy - Allbirds focuses on sustainable materials for its footwear and apparel, with core products including lifestyle sneakers and casual footwear [3] - The company has shifted towards cost discipline, reducing underperforming retail locations and prioritizing e-commerce and distributor relationships [4] - The transition to a distributor model in over 40 countries aims to reduce fixed costs but has resulted in lower gross margins [5] Operational Highlights - Selling, general, and administrative (SG&A) costs decreased to $24.2 million, representing 60.9% of revenue, down from 65.0% [7] - Marketing expenses fell to $8.5 million, primarily due to reduced digital advertising spend [7] - The company ended the quarter with $33.1 million in cash and $5.0 million in borrowings on its revolving credit facility [8] Product Development - Allbirds is preparing to launch new products, including a Remix subcategory featuring upcycled materials and fully waterproof footwear [9] - Upcoming collections include Elevated (professional/dress styles) and Relaxed (for casual wear), aimed at renewing brand engagement [9] Future Outlook - Management updated its FY2025 net revenue guidance to $165–$180 million, down from a previous range of $175–$195 million [10] - Projected adjusted EBITDA losses for the full year remain at $65–$55 million, with Q3 2025 revenue forecasted between $33–$38 million [10] - The company anticipates a negative revenue impact of $20–$25 million due to the shift to international distributors and domestic store closures [10]