Allbirds, the shoe-specialist-turned-apparel-maker, had an impressive third quarter with net revenues increasing by 33% year-on-year. The company attributes this growth to its positioning at the forefront of a generational shift in consumer values and behaviors. Allbirds reported a revenue of $62.7 million for the quarter, a significant increase compared to the same period in 2019. However, despite the positive revenue growth, the company recorded a GAAP net loss of $13.8 million, which is wider than the $7 million loss from the previous year. The adjusted EBITDA loss for the quarter was $6.3 million, higher than the $3.8 million loss in the same period last year.
It is important to acknowledge that Allbirds is still in the early stages of development, and it is common for companies at this phase to experience losses as they invest in their growth. Despite this, Allbirds has continued to invest in expanding its stores network and opened four new locations during the third quarter, bringing the total store count to 31. The company’s losses can be attributed to the costs associated with store openings, increased headcount, public company preparations, and higher marketing expenses. However, there was a positive development in terms of gross profit, which increased by 36% to $33.9 million, and the gross margin expanded by 120 basis points to 54.1%. The increase in gross margin can be attributed to a favorable product mix, higher-margin product sales such as apparel, and a decrease in product costs (partially offset by higher warehouse and logistics costs).
Joey Zwillinger, co-founder and co-CEO of Allbirds, expressed satisfaction with the company’s performance, stating that it reflects solid execution by their teams and strong global demand for the Allbirds brand. The higher revenue was primarily driven by strong consumer demand in the United States and a positive response to new footwear and performance apparel product launches. Net revenue in the United States increased by 42% to $47.7 million, while international net revenue grew by 10% to $15 million compared to the previous year.
Looking ahead, Allbirds has provided its full-year forecast, projecting net revenue of $270 million to $272 million. This represents a growth rate of 23%-24% compared to 2020 and 39%-40% compared to fiscal 2019. The company expects an adjusted EBITDA loss of $17 million to $15 million, including an estimated $5 million of public company costs.
Overall, Allbirds has showcased strong growth in its net revenues during the third quarter, despite incurring losses as it invests in its expansion. The company’s emphasis on innovative and sustainable products has resonated with consumers, leading to increased demand and a positive response to its brand. With its continued investment in retail stores and product offerings, Allbirds is well-positioned to capitalize on the evolving consumer landscape and achieve long-term success.
Useful links:
– Allbirds Official Website
– CNBC Article on Allbirds’ Q3 2021 Earnings
