Allbirds Premarket trading on Wednesday saw shares fall more than 14% after the company reduced its FY revenue guidance. It also stated that it expected a larger adjusted EBITDA loss.

Allbirds’ Q1 net revenue was $62.8 million. This is slightly more than consensus estimates of $62.2 millions. The analyst consensus was $11.2 million. However, the adjusted EBITDA loss was $12.2 million.

BIRD anticipates that net revenues will range from $335m to $345m for the entire fiscal year. This is in contrast to the previous forecast of $355m to $365m, and analysts had expected $362.4 million.

FY EBITDA losses of between $25 and $21 millions are expected by the company, up from its previously forecasted range of $9 to $13million loss. This is a significant increase over its prior projections of an estimated loss of $10.9 m.

“We anticipate that external headwinds will continue to impact our international business and as such, we are reflecting a more cautious outlook in our updated 2022 guidance targets,” CFO Mike Bufano said.

Allbirds said Russia’s invasion of Ukraine and lockdowns in China weighed on the company’s international business operations in the first quarter. The company’s management said it expects these challenges to remain throughout 2022.

Jim Duffy of Stifel maintained a Buy rating, but lowered his price target to $7.00 per shares from $20.00.

“We acknowledge external challenges (Ukraine, China COVID restrictions, FX, supply chain, etc.) While we are encouraged by the focus on expense management, business momentum has been slow relative to our expectations. The current share price, including the franchise and sustainable assets as well the franchise and business are undervalued in the light of both external disruptions, and the revalorization of valuation. Additionally, we see opportunity within the P&L to defend against cash consumption and value destruction,” Duffy said in a note.

Telsey Advisory Group analyst Dana Telsey said BIRD delivered “solid” results. Also, the analyst lowered the price target from $11.00 to $9.00 per shares.

“We believe Allbirds’ business is on solid footing in the US and the company continues to benefit from increasing brand awareness, new store openings, and good reception to product launches. Investors are still concerned about the US’s consumer health, given the supply chain issues and inflationary pressures. The stock will likely be affected by Allbirds’ 2Q22 outlook that is less optimistic and the downward revision of the 2022 guidance. Looking further out, we continue to view Allbirds as a lifestyle footwear and apparel brand that is in the early phases of robust, multi-year growth, as a result of the company bringing a new proposition to consumers through its focus on simple designs and sustainable materials,” Telsey told clients.

By Senad Karaahmetovic