Allbirds at TD Cowen Conference: Product Innovation and Strategy Shift

On Tuesday, 03 June 2025, Allbirds Inc. (NASDAQ:BIRD) presented its strategic vision at the TD Cowen 9th Annual Future of the Consumer Conference. The company outlined its turnaround strategy focusing on product innovation, marketing enhancements, and operational efficiency to drive growth and profitability. While optimistic about its future, Allbirds acknowledged challenges such as tariff impacts and consumer sentiment shifts.

Key Takeaways

• Allbirds plans to launch 19 new products between July and December, compared to just 4 earlier this year.
• The company has transitioned international markets to a distributor model, achieving immediate profitability.
• Marketing efforts will increase, focusing on the "Allbirds by nature" platform and the "Cards on the Table" series with Stanley Tucci.
• Despite a 10% tariff on Vietnamese footwear, Allbirds maintains its pricing strategy through modest price adjustments.
• The company is reducing office space and workforce to ensure profitability amid growth.

Financial Results

• Inventory Management: Allbirds has optimized inventory levels, transitioning international markets to distributors for immediate profitability. Cost reductions in product COGS and SG&A have been achieved.
• Consumer Sentiment: Initial instability due to tariff announcements has stabilized. The core consumer demographic remains resilient.
• Tariff Implications: A 10% tariff on Vietnamese footwear production is in place, with potential scenarios planning for increases up to 46%.

Operational Updates

• Product Pipeline: A significant increase in product introductions is planned, with a focus on waterproof shoes and shearling-lined items.
• Distribution Channels: By Spring 2026, Allbirds will engage five US sales agencies to penetrate US specialty stores, while most international markets shift to distributors.
• Marketing Initiatives: The company is enhancing brand visibility through strategic marketing platforms and celebrity partnerships.

Future Outlook

• Growth Drivers: Emphasis on product innovation, marketing investments, and customer experience is expected to drive growth into 2026.
• Product Focus: New materials like Terralux and expanded product categories aim to meet diverse consumer needs.
• Profitability Targets: Allbirds is committed to achieving profitability through strategic product launches and marketing.

Conclusion

For a detailed understanding of Allbirds’ strategic plans, refer to the full conference call transcript.

Full transcript - TD Cowen 9th Annual Future of the Consumer Conference:

Operator: Hi, everybody. Thank you for joining us today. We’re excited to have

Unidentified speaker: the CEO of Allbirds, Joe Vernaccio, and the CFO, Annie Mitchell. They are guiding a a very clear turnaround in the Allbirds brand. Allbirds IPO ed in 2021 at a big market cap, and this management team is is guiding the the brand through a big transformation. So, Joe, if we could start with you, something, you know, a little high level. Three or the the key focus areas are product, marketing, and customer experience.

And that’s expected to drive a return to growth. Can you talk about those three?

Operator: Yeah. Yeah. I’d love to. It’s important to know that, you know, we’ve spent the last couple of years just improving the foundational underlying business, the mechanics of the business, the inventory, and how we’re structured, and we’ll put that to the side. Now we turn our attention to to the three main important things that you have to do in a consumer driven business, especially in footwear.

You’ve gotta have a relentless flow of compelling product and and we started that process a year over a year ago and that first product is starting to come to bear July, August and September of this year and will only increase as time goes on. Second is marketing. We have to tell our story to the consumer. We have to reintroduce this brand and all the charm that existed when it first began back to the consumer and we’re starting that we started that early in in q one with a very top of funnel piece of content that we can talk about more in a little bit. And and then the last piece to it is the experience.

So how does a consumer purchase your product? What’s it like on our site? What is it like in our store? You know, you have to remember most people when they engage on your site and your store, most people actually don’t purchase products. They walk away not with an object, they walk away with an experience.

And if you give them a good experience, you may or may not have the right product that moment, but if you give them a great experience, they will come back to you. They will be open to you, and when you do have the right stuff, you get those sales in the future. So it’s kind of those three main components of product marketing and experience.

Unidentified speaker: Can you talk about the product pipeline for fall twenty five? I think you’re pretty excited about it.

Operator: Yeah. Yeah. So, you know, I’ll give you a simple example. Between January and July of this year, we’ve introduced four new products. Between July and December of this year, we will introduce 19 new products.

So the new product pipeline is is flowing in full force. We’ll have a variety of products that start with the very first piece will be re anchoring ourselves in that original runner and in wool to make sure that we don’t ever lose that position, that those products, that silhouette, that material’s iconic with our brand. We don’t ever wanna lose that, but we can’t just sit on that. So right behind that, we’ll be introducing a court silhouette that we’re we’re calling the cruiser, which will give us a lot of dimension. It’s what a lot of people wear right now in their silhouettes.

They’re wearing these court style silhouettes. Then just some highlights for the back end of the year, we’ll have waterproof shoes. So we’ve never had waterproof. So shoes that look exactly like our shoes, but are completely fully waterproof, which is really hard to find. When you find a waterproof shoe today, it’s pretty dowdy.

It’s pretty ugly looking or it’s a shell boot that just doesn’t go with anything. So we think there’s a big opportunity there and then and then we’ve got kind of a very, very cozy leaning into our wool proposition with with shearling linings of slippers, clogs, and short boots that people will be able to just wear for very casual occasions. You see it right now. You walk down the street. You’re hard pressed not to see somebody wearing a slipper out just on the street.

So while these are designed in that use occasion, it is used in many different options. We think it’s a big opportunity for us in the future.

Unidentified speaker: That’s exciting. Annie, macro, how’s your core consumer feeling and how are you approaching tariffs?

Annie Mitchell, CFO, Allbirds: Sure, so we definitely saw some consumer uncertainty and some choppiness following announcements on April 2. And what we’ve been pleased to see though is that that has been stabilizing and smoothing out over time. So it used to be with every new headline, the consumer would respond either positively or negatively similar to how the stock market did. But really since then, the each headline or each moment is less and less impactful or goes away faster. Our core consumer has a household income of a hundred and $50,000, equally split male and female, generally married with both folks working, and a number of kids.

This demographic has not been as meaningfully impacted as maybe some others. And so I think that’s why, again, we’re seeing these moments of reaction, some choppiness, some uncertainty, but overall it’s not been a huge impact for us, which we’re pleased to see and hoping that things continue to smooth out and stay stable going forward.

Unidentified speaker: Good to hear.

Annie Mitchell, CFO, Allbirds: From the tariff perspective, all of our footwear is produced in Vietnam, which has an incremental tariff of 10%. That’s on top of the underlying duties that we would normally pay. And the 10% is related to the ninety day pause that was put in place. The initial announcement was 46%, you probably remember that day like the rest of us. I think we joked that we all blacked out for a moment or two when we heard the amounts.

More. Exactly. But now that we’re down to the 10%, we believe that that is a base case for what to expect going forward. When we do scenario planning, we’ve now scenario planned all the way up just going back to an incremental 46%. We have some scenarios for that.

That largely includes meaningful price taking. But as a quick reminder, that won’t just be for all birds. That will be for everybody in the footwear industry and really across numerous industries as well. And so the bigger impact of that is how does the consumer respond. But our base case is that the 10% or something like it stays.

And with that, we’ve taken very modest price increases for fall holiday. Because we believe in our product architecture. We believe in the price points that we wanna come out at, and so we’re trying to hold to that as

Unidentified speaker: much as possible. Excellent. Joe, back to you. Who is the Allbirds core consumer and how do you accelerate customer acquisition in men’s and women’s?

Operator: Yeah, so the core consumer is probably sitting in this room right now. Somewhere between 30 and 45 up to 50 years old. They have young families. They’re on the sidelines at soccer games and softball games on the weekends. They’re going to farmers markets.

They have jobs. Both parents are working, and they travel for both work and pleasure. There are millions and millions and millions of these people that we don’t need to slice it very thinly. There are tons of use occasions in this casual lifestyle footwear space that we can harvest. We haven’t even begun to scratch the surface of all the different possible use occasions and opportunities we have to meet them.

The the really nice thing about our proposition as a brand is we don’t just have to introduce a product in a silhouette in a particular material or a particular color. We’ve been known for materialization and color. We haven’t even begun to really deliver that to the consumer. So you’re gonna see that really come through in the back half of this year. We have one shoe that that we’ll be introducing that will be available in over 20 color ways.

So when you walk into a store, you’ll really see this impact. We’ve been known for delivering color. Of course, we don’t expect all those edge colors to get purchased, but it really makes a visual impact and gives people a little more courage to show off, to to express themselves. There was a time for for men and and I think it’s still happening where men used to express themselves through through their socks. They would be very conservative, but they would have this little sock moment that showed, you know, it used in the old days, it used to be a tie, then it turned into a sock.

We think that that a little bit brighter, happier, less serious footwear is something people can express themselves. So you can see the marketing campaign that’s already gonna be coming to life. We use Stanley Tucci in our advertising that we did in the beginning of the year. If any of you have not seen cards on the table, I encourage you, even if you’re not interested in in our brand or anything, it’s very entertaining. We created content to a four twenty minute series.

Stanley Tucci hosted these dinners and we curated a set of questions and we introduced and curated the the dialogue and it’s evergreen content that continues to gain views every single week. We it continues to grow and grow and grow in popularity because the wide variety of people. We have formula one drivers, we have chefs, we have physicists all having a really interesting dialogue. Even though I’ve seen these many times, I still go back and rewatch them because you get little tidbits and insights into these people that you’d never heard before. The idea behind all that content is to create our team.

When you’re a lifestyle brand, you have to associate yourself with people so that the consumer, I’m getting back to the consumer, the consumer sees their reflection in your brand. That’s really important and can be really nuanced in a lifestyle brand. Sometimes you you will anchor yourselves to one famous movie star. We don’t believe in that. We believe that we need a variety of people to express all the different dimensions of our brand.

Unidentified speaker: That’s excellent. Annie, let’s jump back to the financials. You’ve done a great job managing working capital inventory and liquidity since you’ve joined.

Annie Mitchell, CFO, Allbirds: Thank you.

Unidentified speaker: How do we think about your current investment needs and the long term margin profile of the business?

Annie Mitchell, CFO, Allbirds: Sure. So you’re right that we have really taken a strong look and managed through our balance sheet. So we feel good about the inventory position. We cleaned it up in 2023 and have kept it healthy levels ever since. That means we have the space in our open to buy to invest in this new product that’s coming, we have the cash to be able to invest in the product and marketing.

But importantly, and I’m glad you asked about margin, is it’s actually the operating improvements that we’ve made across both our product COGS as well as our SG and A that have reduced the overall cost of the business, which is starting to show up now in our cash flows. And as we position the company for growth, specifically in q four of this year and going into 2026, again, by that customer experience, the new product, and the investments that we’re making in marketing, these are the things that will help us to grow and following growth is when we get to profitability and cash flow positivity. Between now and then, we feel confident that we have the runway to be able to deliver against this plan that we feel very confident about.

Unidentified speaker: That’s excellent. Joe, shifting back to you. Channels of distribution focus, balancing DTC and wholesale and distributor markets. Can you talk to that?

Operator: Yeah, so in The US, believe in a balanced marketplace. We need our own ecommerce business, and that’s the core of our business today. We need retail. We don’t need a lot of retail, but we need a core group of retail. We believe it’s important today to have an analog version of your brand out there in key cities telling your story and using them to activate your brand.

And then there’s wholesale. You need more points of distribution to grow significantly. In order to do wholesale well, you have to have a product engine that is producing a flow of product in a variety and on a timeline and with a pace that that you can sell in and deliver to those retailers. We’ve just built that engine. So spring twenty six is our first season of we’ve just signed five US distributor, sorry, not distributor, US sales agencies with sales reps to start to sell into US specialty.

That will be slow, that will take time, you have to get in with some tests, it takes two, three, four seasons, But once the rest of the product is flowing and our ecommerce business starts to grow again, the wholesale business will really, really inflect and it allows us to grow this business disproportionately because we get preseason orders. So it’s a lot less inventory and financially risky to grow disproportionately there versus in your own ecommerce business that you have to be very thoughtful with inventory. This business is really an inventory management business. The very first thing Annie and I did when we when we started this was to clean up the inventory. And I’m just we are so laser focused on making sure the inventory stays healthy and it it’s it’s the path to profitability which is keeping the inventory healthy.

Underneath all of this is our international markets. So we were direct in in a bunch of markets, six markets that we have transitioned to distributors. If you don’t understand the distributor market, how it works, basically there are companies that do business with authority in all of these countries that have a multitude of brands. They leverage all of their infrastructure to bring on new brands so that they can grow. They know all the wholesale accounts.

They know all the landlords. They’re running e commerce. They’ve already got a distribution center. We were doing all of that direct. Annie and I have transitioned all of those except for The UK.

We’ll be transitioning Europe in June. The minute we flip a market from being direct to being a distributor, it is profitable. So we are now profitable in all of these markets. We have 14 international distributors. They just came in last week for our spring sales meeting.

These are people who are running businesses for sometimes forty, fifty, sixty years in these countries. They are serious and earnest and have a really good eye. And I’m happy to say that they were floored by what they saw, what’s coming, both what they saw last fall, but also what they’re gonna see in spring twenty six. So the momentum just continues. This is a product business.

Nothing else matters. Right? I I say this to our team constantly. Nothing matters except for product until the product is there. Once the product is there, everything else matters.

So we’ve been product, product, product focused for the last twelve to fourteen months. That product is gonna start to deliver here in the back half of the year and it’s why we’re we’re here now because this is this is the time we’re done talking about all of the transitions and the this and the math and the complication of how to look at things. Look, the product is coming. The marketing is coming. The experience is coming.

You know, between Annie and I, if you combine just our years, you know, we’ve been selling we’ve been making and selling shoes for fifty years. This isn’t a new a new concept for us. We know we know how to do this, and we know what it looks like when it works, and it’s coming.

Unidentified speaker: Yeah. It’s all about product in this industry. I just got out of a a meeting with a footwear industry expert at the conference, Matt Powell, who thinks performance is driving lifestyle now and that lifestyle shoes without a performance angle are not resonating. How how do you play in in that game?

Operator: Well, I mean, I love Matt. I’ve known Matt for a hundred years, it feels like. It depends on how you define performance. So our performance angle is our shoes are wildly comfortable. That is our performance angle.

It doesn’t need to be you don’t need to, like, carve giant holes in your mid soles. You don’t need to have a win a foam fight with everybody out teching them. They simply, in a in a lifestyle situation, they simply need to put the shoe on and go, oh, damn. That thing’s comfortable. I just was in our SoHo store yesterday.

I sat there for three hours just watching people. I just sat in the corner and I just observed people. And every single time somebody put on a shoe, they were like, wow, that’s comfortable. Even there were three or four women over the three hours trying on our flats and they would try on our our ballet flat and say, how do they make this thing so comfortable? That’s the magic.

That’s what it comes down to. That’s our performance angle. You layer on top of that our sustainability proposition and the materials and the consideration. It’s not the thing why people purchase, but it is a reason why people purchase. It is part of the proposition.

People wanna feel good about their purchase and they wanna know that we thought about that for them. And we almost think of it as a gift with purchase that, you know, you can come in and feel good about your purchase at Allbirds. So I would love to see Matt. I haven’t seen him in a couple of I need to I need to shake him a little bit.

Unidentified speaker: Annie, product and marketing go hand in hand. How are you thinking about marketing? Is that dollars, marketing rate, and where are you investing?

Annie Mitchell, CFO, Allbirds: Great. Let me take you down a little bit of history. So when we kicked off our transformation at the beginning of 2023, we knew that cleaning up that inventory and getting out of certain product lines. So many of you might know that Allbirds went from this lifestyle footwear where we certainly belong to performance running. We started going into apparel.

And with that, when we did the transformation, kicked it off, we wanted to get back to our core product that we were known for and loved for. And so with that, had to get rid of this excess inventory. So in addition to clearing that product, putting it on a markdown on our own site and our own retail stores as well as traditional liquidation partners, we also cut back on our marketing in a really meaningful way. Because we didn’t want to introduce ourselves to new consumers with product that was on sale and not really who we were gonna be going forward. So really for ’23 and 2024, we dramatically pulled back on marketing dollar spend.

Especially when we look at upper funnel or brand awareness driving. Well, now that we have a marketing platform that we really believe in, it’s all birds by nature. We have the cards on the table series that we invested in in q one. That was a big investment for us. If you look at our marketing spend, in q one, it looks a lot more like what a q four marketing spend would be.

This is just the beginning of us reintroducing ourselves. So we believe or we plan to spend more marketing this year both as a dollar and as a rate of sales compared to what we’ve done the past two years. And intention of that is to again reintroduce ourselves to people who might not have heard from us for a while, introduce ourselves to new people who are not aware of Allbirds. You might know that our aided awareness is only 15%. So lots of opportunity to grow from there.

And we’re willing to do that now again because we have the brand platform and most importantly, like you said, hand in hand, we now have the product that we’re excited about. We stand behind and it is completely in line with our product architecture strategy going forward. So now is exactly the right time to be investing in marketing.

Unidentified speaker: Understood, that makes a lot of sense. Joe, back to you. The international piece of the business, how do you build brand awareness there? There’s distributor markets, you said they’re profitable right away. Like, how do you build on that momentum internationally?

Operator: Yeah. I mean, first have to make sure that you’ve got world class distributors. And if you take a look at our portfolio of distributors, we have a company in Japan called Goldwyn, which is the premier distributor in all of Japan. We have Bell or Bailee depending on how you pronounce it in China who’s who’s managing the business for us there. I mean, they’re world class retailers and they they manage all aspects of marketing and sales and marketplace management for us And they’re very respectful of the brand.

I think a lot of times people have a perception that, oh boy, you’re using distributors. Do they do harm to your brand? If you hire and you bring on and partner with world class distributors, they are brand builders. They actually do a better job of representing our brand sometimes than we do. You go into a market and you’re like, wow, the brand looks amazing in this market.

And so the the key is the right partners. They’re they’re experts at what they do. They have a portfolio of brands that they are able to leverage. They have most of our of our distributors do not have another footwear brand. They might have had one, or if they do, it’s a very adjacent one and not conflicting.

So it’s really important that our business works for them. So I think the combination of their expertise and our value to their portfolio and their ability to really understand that it’s a brand and not just an object that they’re selling is really powerful. Again, I mean, they were just in. We had hundred over a hundred people in, you know, rented out the ballroom, just gave our big presentations, and you could just feel the energy in the room. And, you know, you ask you ask a distributor one question, and you tend to do it, you know, after a few drinks when they’re a little a little more willing to tell you the truth.

And you ask them one question. Do you have enough to do the business? And to a single to every single distributor, they were like, there’s more than enough here for me to do business in in my country. And you just need to make sure that you’re taking care of them and that they have enough product and enough variety to manage across all those markets. Right?

There 14 distributors representing, you know, 70 countries if you actually look at every flag. So it’s it’s a big business. And the beautiful part about our distributor business right now is it is profitable and it is growing. And those are two very good qualities.

Unidentified speaker: Oh, all right, there we go.

Operator: It’s all right.

Unidentified speaker: Earlier you talked about product marketing, customer experience as three focus initiatives, and that’s going to return you to top line growth in the back half of the year potentially. Can you talk about which is the biggest driver? Is it product, is it marketing, customer experience, how does it all

Operator: Yes, yes and yes. Mean, think I said product is the most important thing, but as soon as a good product is there, you’ve got to tell a good story. It’s gotta have a good name. It’s gotta be in context. You have to explain the use occasions.

You have to under explain what what problem it’s solving for people. It might be a technical problem like, you know, Matt Powell will always wanna talk about technical and performance. That’s his that’s his world. But you also have problems in your everyday life. So we believe that consumers are looking for sneaker level comfort in every possible occasion in their life.

So if they can get away with wearing a sneaker or a flat at a wedding, they will. And so we’re one of the one of the capsules that we’ll be introducing this fall, we’re calling elevated. And it is taking sneakers and sneaker level comfort and bringing it into a slightly more elevated use occasion. So the sneakers, every every man in this room would probably look at these sneakers and go, oh, I can wear this. I could wear this with a pair of slacks.

I could wear it with khakis. I could even potentially wear it with a suit if I and not look out of place. We’ll be introducing a new bio leather that’s never been used in footwear before and I tend to pride myself on materials and textile knowledge. It’s kinda where I started in this business way back when I was a product developer at the very, very early stages of this. I cannot tell the difference.

If you put leather down and you put our material that we’re calling Terralux on the table, I cannot tell the difference. The only way I can tell the difference is I have to light it on fire to see how it melts and how it changes. And it’s all bio based and recycled material and it’s and it’s beautiful. So you couple that with the consumer and the use occasion that is real. It it is a real problem that people are trying to solve and they’re solving them with white sneakers or maybe there’s a handful of shoes but they’re very expensive.

So in this sweet spot between 80 to a hundred and $30, if we can deliver on that proposition, we just think there’s hundreds of millions of dollars to be had in this space.

Unidentified speaker: That’s excellent. Annie, last question. With all these initiatives in place, what are you most excited about in the financial model as we go into the back half of the year in 2026?

Annie Mitchell, CFO, Allbirds: So to build on what Joe was just talking about, product. In simple terms, we took almost two years off from product. As he mentioned a moment ago, only introducing like four new products a season, etcetera. And so we took those two years to really restructure the company. We talked about the international transitions to the distributor model.

We closed unprofitable retail doors. We shrunk the size of our offices, our workforce, etcetera, really to get down to a much smaller overall structure, wireframe of the company, and importantly, of the company. And the interest in doing that was to basically make sure that when we grow again, as we’ve been working on this product in the background for a year and a half, that we would then become profitable. And so I feel like the hard work is behind us. Right?

Those tough things that you have to do when you’re restructuring a company, we’ve done that. And now we couldn’t be more excited about what’s in front of us. The fun works in front of us, which is bringing this product to market. That’s the tip of the spear supported by these new marketing, not just campaigns, but the content reintroducing ourselves. And then making sure that those customers have a fantastic experience if they come to our store, they come from one of our international distributor stores around the world, or if they come to our website.

And so we know after our fifty years in the industry, most of those are Joe’s years, product is absolutely the thing that makes or breaks a company. What we’ve done to do is try to make sure everything behind that and underneath that product is going to set us up for profitability going forward and to be cash flow positive. And so as I mentioned before, we’re so excited and confident in this plan and just can’t wait for all of you to get a chance to check out the product. The first drops come in July and really builds over July through December and then continues into 2026. And we’re well positioned for growth.

We have the team that knows how to deliver it. And now we feel like we have the right product to really bring to life the most potent version of Allbirds, what people initially fell in love with.

Unidentified speaker: That’s excellent. Joe, Annie, thank you.

was great. Thank you. Congrats on time. Thank you. I just have one last thing to say.

We are super excited about Xcel launching, voting launching this week, and we love your support. Five star vote for Cowen if you found us helpful in your research process. Thank you.

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