Smartbird, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Allbirds first quarter 2025 earnings conference call. All participants have been placed in a listen only mode. After management prepared remarks, there will be a question and answer session at which time instructions will follow. I would like now to turn the conference over to Christine Greeney, investor relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us. With me on the call today are Joe Vernaccio, CEO, and Annie Mitchell, CFO. During this call, we will be making comments of a forward-looking nature. Actual results may differ materially from those expressed or implied as a result of various risks and uncertainties. For more information about these risks, please review the company's SEC filings, including the section titled Risk Factors in our report on Form 10-K for the year ending December 31, 2024, for a more detailed description of the risk factors that may affect our results. These forward-looking statements are based on information as of May 8, 2025, and except as required by law, we assume no obligation to publicly update or revise our forward-looking statements. Additionally, we will be discussing certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP. A reconciliation of our non-GAAP measures to the most directly comparable GAAP measures can be found to the extent reasonably available in today's earnings release. Now I would like to turn the call over to Joe to begin the formal remarks. Joe?

Good afternoon, everyone. Thanks for joining us today. We're pleased to report another quarter of progress on our path to growth and profitability. Our first quarter results were in line with our expectations on the top line and exceeded guidance on the bottom line. As we move through 2025, the foundational work we've done over the past year, including reducing our retail footprint, transitioning international markets to a distributor model, right-sizing inventory, and lowering costs is now coming together with our efforts in product, marketing, and customer experience. Together, we believe these work streams will build momentum toward a meaningful inflection point in the back half of the year. Our refreshed product line will begin reaching the market in late summer and is expected to support our anticipated return to top line growth in the fourth quarter. Early reads on our product and marketing initiatives gives us confidence that we're on the right path. While our teams remain focused on executing our 2025 plans, we're also navigating an evolving macro environment driven by shifting global trade policies. Annie and I will speak to that more directly in just a few minutes. Before we get to that, I'll walk you through updates on each of our three key focus areas. Making great product, telling great stories, and creating an engaging shopping experience. First, product is our most important growth driver. The product engine is now fully staffed, sharply focused, and operating at a high level. When the first results of our work reach the market in the back half of the year, you'll see a mix of reintroduced icons, refreshed favorites, and entirely new categories that position us for long-term growth. Our fall lineup is the strongest and most diverse we've ever assembled. It spans casual, elevated, and relaxed silhouettes, brought to life with modern design, unique materials, and the signature all-birds comfort our customers expect from us. Call-outs include updates on our Runner franchise and the debut of the Cruiser, a new court-inspired silhouette made from recycled wool and offered in nearly 20 colors. Next will be the introduction of a new subcategory called Remix, products that feature materials made with ingredients otherwise destined for landfill. It's a strong expression of our ongoing commitment to sustainability. delivered through versatile design for everyday wear. Another first for Allbirds is a fully waterproof collection that looks amazing. We've designed a beautiful, versatile and functional collection of shoes our customers have been asking for. We're also planning to introduce two new collections that we believe represent significant long-term growth opportunities. The first is what we're calling Elevated, shoes that bring sneaker-level comfort to more dressy and professional settings. Through carefully considered silhouettes, materials, and color choices, we're tapping into a clear and growing trend that will be represented in sneakers for men and flats for women. At the other end of the spectrum, we're responding to the rising desire for extreme comfort at home with a collection we are calling Relax, with styles that feel so great around the house that you can't help but wear them around town. This introductory collection will be distinctly Allbirds in aesthetic and material. We're deeply committed to bringing new product to market because we believe it's essential to unlocking growth. Early validation in our Q1 results reinforces our conviction that when we deliver what our customer wants, it can drive meaningful and sustained momentum. A recent example is the Canvas Piper, a subtle variation on a silhouette we introduced last year, which quickly became one of our top sellers. Its success underscores the demand for clean, versatile, everyday sneakers. As well, our new utility pack, a more rugged, functional design, has performed well right out of the gate. Even with a relatively light flow of new launches, the percentage of sales from new products has grown steadily, rising from the high single digits in January to over 20% in March. We look forward to introducing a broad range of new assortments to consumers this fall and believe that they can be a meaningful driver of growth for our business. With all the new products coming, it is important that we keep a sharp eye on our inventory. We've taken steps to optimize our inventory position ahead of our upcoming launches. Initial buys have been conservative, and we're maintaining a disciplined approach to inventory management given the current macro environment. This posture allows us the flexibility to read consumer signals in real time and lean into areas of momentum as we move through Q3 and Q4. Earlier this year, we began reintroducing the Allbirds brand through a mix of brand building, traditional, and performance marketing. At the top of the funnel, our Cards on the Table series, hosted by Stanley Chuchi, has been a standout. When we spoke to you on our year-end earnings call, the series had just launched. Since then, it has generated over 25 million Instagram views, including 15 million unique viewers, and more than 1 million views on YouTube. On social, collaborative posts with partners like Stanley Tucci, Rolling Stone, and Carlos Sanz have outperformed benchmarks, generating up to 100 times our average reach. This early success confirms the power of storytelling and the cultural resonance of the diverse voices featured. Just as importantly, they reflect Allbird's core values and help re-anchor the brand with purpose and relevance. Building on that momentum, we're increasing the volume and range of content to support our hero products and seasonal launches in the months ahead. Still, under the Allbirds by Nature banner, our messaging will reinforce four key attributes, comfort, style, quality, and sustainability. Comfort remains foundational, but we will also help consumers see how our products fit into a variety of real-life occasions. responding to a clear desire for more styling inspiration. Layering on strong proof points around durability and sustainability helps create a well-rounded story, one that can be told consistently over time. As we talked last quarter, we have been focused on optimizing our performance marketing strategy, and those efforts are beginning to show tangible results. In the initial four weeks, key e-commerce metrics improved meaningfully versus the prior year. CAC was down, new customer acquisition accelerated, and conversion rates were up. Together, all these efforts reflect a marketing strategy that's both emotionally resonant and commercially effective, designed to build long-term brand equity while delivering measurable impact. The final piece to the puzzle is creating a standout experience, whether it's customers shop us online or in-store. Our efforts to elevate that experience are well underway. On the digital side, our website redesign is on track for a summer launch, featuring richer storytelling, more dynamic product detail pages, and a smoother, more intuitive shopping journey. In retail, we've been piloting a refreshed store concept at our Hayes Valley location in San Francisco. Updates to layout, fixtures, navigation, and visual merchandising have created a space that's warmer and more welcoming and much easier to shop. These improvements require minimal investment but deliver outsized impact. Early results have been strong, driving increased engagement and higher daily sales. We're now rolling out this new format to two additional locations. our Soho store in New York City, and the Stanford Shopping Center store in Palo Alto. We plan to build on our key learnings and expand the concept around more stores in the coming quarters. Now turning to the macro environment. While the current tariff landscape adds complexity, our team is well equipped to navigate these dynamic conditions, drawing on years of industry experience. With the majority of our manufacturing based in Vietnam, we're proactively managing potential cost of goods pressure through tighter inventory buys and ongoing evaluation of future price opportunities. At the same time, our growing international distributor business helps mitigate exposure to U.S. tariff impacts. Meanwhile, traffic and conversion across the customer landscape have been reported as choppy since early April, and we've seen similar trends. Near-term consumer behavior is difficult to predict and supply chain disruptions may occur as the broader market adjusts to new tariffs. Despite this, we remain cautiously optimistic, mindful of the burden on consumers, yet encouraged by our strong execution and the positive early indicators I just talked about. Assuming we do not see a material shift in the macroeconomic environment or broader consumer demand in the coming quarters, we believe we are positioned to return to top-line growth in the fourth quarter of this year. We are grateful to our teams across the company for their resilience and commitment. We simply would not be approaching this next chapter without their contributions. We also thank our shareholders for their continued support and remain focused on building long-term value. Now, I'll turn the call over to Annie to review the financials.