Allbirds saw revenue decrease last year despite 25 new store openings, which an analyst said is due to the company being misaligned with the market.

According to the footwear retailer, its net revenue fell 14.7 per cent to US$254.1 million ($412 million) due to lower average selling price, driven by increased promotional activity.

However, GlobalData MD Neil Saunders had a different view, saying that the company failed to improve product sales as its values are not aligned with the market.

“Given the company has opened 25 new stores over this same period – an increase in the store count of 71.4 per cent – this is little short of an abysmal performance,” Saunders said.

“The truth is that Allbirds is simply not aligned with what the consumer wants and its focus on sustainability, while worthy, is all wrong. By and large, sustainability does not sell footwear. Despite consumers being generally concerned about sustainability issues, it is hardly ever the key determinant of footwear purchases; it is only ever an afterthought.”

Allbirds’ US net revenue slid 16.9 per cent to US$191.1 million while international net revenue tumbled 7.3 per cent to $63.0 million. The company’s net loss worsened to US$152.5 million and gross margin shrank to 41.0 per cent.

For this year, the company forecasts net revenue of US$190 million to US$210 million. US net revenue outlook is US$150 million to US$165 million while international net revenue is estimated to be between US$40 million and US$45 million. Gross margin guidance is at 42 per cent to 45 per cent.

Meanwhile, Allbirds has appointed COO Joe Vernachio as CEO, effective March 15.

Co-founder and CEO Joey Zwillinger will remain on the board of directors and serve as a special advisor to the company.