Lifestyle and footwear brand Allbirds says its strategic transformation plan will “reignite growth” despite its revenue and profit slipping.

For the quarter ended June 30, net revenue fell 9.8 per cent to $70.5 million while adjusted EBITDA saw a loss of $18.3 million.

Gross profit reached $30.1 million compared to $28.2 million in the second quarter of last year while restructuring expense contributed $1 million, or 1.5 per cent of net revenue.

At the end of the quarter, the company entered into a non-binding letter of intent with a distribution partner in Canada and South Korea, which will be finalised in the second half of the fiscal year.

Joey Zwillinger, co-founder and CEO of Allbirds, said the company gained “traction” across key benchmarks which helped lower operating cash use and exercise cost control in the quarter.

“Our teams are laser-focused on the four key pillars under our plan, which has us on track to reignite growth, and improve capital efficiency with the goal of driving improved profitability.”

Neil Saunders, MD of GlobalData, described the results as a “progress of a sort” and added the company has a lot of work to do in making the business work financially.

“Allbirds’ core customer is more affluent and insulated from economic challenges. The segment of the market that Allbirds operates in – which is an athleisure/sports/casual fusion – is more robust than the general footwear market.

“As such, we would really expect current economic trends to moderate growth rather than drag the company into negative sales territory.”

Meanwhile, the company’s first-half net revenue fell 11.4 per cent to $124.9 million due to a decrease in average selling price, while gross profit reached $52 million compared to $60.8 million in last year’s first half.