Allbirds CEO: Fresh Product Lines Are Resonating with Consumers
Now that Allbirds has hit a breakthrough in its turnaround plan, the brand is doubling down on its efforts to improve its product line.
During a conference call with analysts to discuss the company's second-quarter results, Allbirds CEO Joe Vernachio said consumers have responded positively to Allbirds' new product strategy, which includes a renewed focus on core styles like the Wool Runner and limiting launches to avoid saturating the market.
New products like the Wool Runner 2, Tree Runner Go, and Canvas Piper "have all been very well received by consumers," according to the CEO. He expects similar results for the new Tree Glider, which will be launched in the coming weeks.
Describing Allbirds' new focus, Vernachio likened the brand to an orange and the design to orange juice.
"If you've ever had an orange without juice, it's not very tasty, right?" Vernachio said. “So we’re investing a lot of time, energy and drive into creating that energy and then applying that to the product line and product offering.”
To “inject freshness as quickly as possible,” Vernachio said Allbirds has used its resources to create new colors and materials for existing styles in the second half of 2024 and 2025. Allbirds is also currently launching 10 new products for fall 2025 and spring 2026, which Vernachio said will “not only expand our product range, but also strengthen our obsession with quality, comfort, style and sustainability.”
In terms of measuring progress, Allbirds hopes to attract new customers into the brand through new products and marketing.
“For new products, we have to attract new customers to our business,” Vernachio said. “So we’re very focused on that performance.”
All of Allbirds’ new products are sold at full price, which is also important for brand equity, he added.
“All of these factors combined make us feel very optimistic about the direction we’re going,” Vernachio said. “We think we’re just at the beginning of this process.”
The San Francisco-based footwear company reported Wednesday that second-quarter revenue fell 26.8% to $51.6 million, in line with its expectations. Net losses of $19.1 million, or 12 cents per basic and diluted share, were also in line with expectations. The results beat the expectations of analysts surveyed by Yahoo Finance, who expected a loss of 17 cents per share on revenue of $50.51 million.
After several quarters of declining sales, Allbirds announced a business transformation plan in March 2023 focused on improving product, optimizing U.S. distribution and store profitability, reevaluating its international strategy and improving cost savings.
Allbirds has since closed 14 retail stores, transitioned its international business to a distributor model, cut merchandise and operating costs, reduced inventory, and scaled back its use of operating cash. In addition to strengthening the product, the next phase of the transformation will also strengthen the storytelling and shopping experience.