Allbirds Q3 sales up, retains full year guidance

Net revenue at Allbirds increased 15.9 percent to 72.7 million dollars and increased 53.8 percent compared to the third quarter of 2020. Adjusted net revenue increased 15.1 percent to 72.2 million dollars.

The company said in a release that the increase in revenue is primarily attributable to an increase in the number of orders, driven by retail store sales, and an increase in average order value partially offset by an estimated 355 bps negative impact from foreign exchange (FX).

“We delivered a strong quarter in what remains a highly dynamic operating environment. I am proud that we exceeded our Q3 adjusted revenue and adjusted EBITDA guidance targets while also delivering on our sustainability goals,” said Joey Zwillinger, co-founder and co-CEO of the company.

“Looking ahead to year end and 2023, we continue to expect macro headwinds to persist but believe that our brand, our growth strategy, and simplification initiatives position us well to emerge strongly from this period,” Zwillinger added.

Highlights of Allbirds’ Q3 results

Gross profit for the quarter totaled 32.5 million dollars compared to 33.9 million dollars in the third quarter of 2021, and gross margin declined to 44.8 percent compared to 54.1 percent in the third quarter of 2021.

Net loss was 25.2 million dollars compared to 13.8 million dollars in the third quarter of 2021, and net loss margin was 35 percent compared to 22 percent. Adjusted net loss was 22.4 million dollars and adjusted net loss margin was 31 percent.

Adjusted EBITDA was a loss of 12.7 million dollars compared to a loss of 6.3 million dollars in the third quarter of 2021, and adjusted EBITDA margin declined to negative 17.6 percent compared to negative 10.1 percent in the third quarter of 2021.

Review of Allbirds nine month operating results

Net revenue increased 18.5 percent to 213.6 million dollars and increased 52.5 percent compared to the first nine months of 2020.

The increase, the company added, is attributable to an increase in the number of orders and an increase in average order value partially offset by unfavorable FX rates that had an estimated 259 bps negative impact on net revenue.

In the U.S., where net revenue increased 23.6 percent to 164.2 million dollars, retail store sales was the primary driver. International net revenue increased 4.1 percent to 49.4 million dollars, as the business was negatively impacted by external headwinds, including continuing Covid-19 restrictions in China, a decrease in discretionary consumer spending as a result of increasing inflation the crisis in Ukraine in Europe, and unfavourable FX rates that had an estimated 9.8 percent negative impact.

Adjusted net revenue increased 18.2 percent to 213.1 million dollars.

Gross profit totaled 93.3 million dollars compared to 97.9 million dollars in the first nine months of 2021, while gross margin declined to 43.7 percent versus 54.3 percent.

Net loss was 76.5 million dollars compared to 34.9 million dollars in the first nine months of 2021, and net loss margin was 35.8 percent compared to 19.4 percent in the first nine months of 2021. Adjusted net loss was 62.3 million dollars and net loss margin was 29.2 percent.

Adjusted EBITDA loss was 34.1 million dollars compared to a loss of 12.1 million dollars in the first nine months of 2021, and adjusted EBITDA margin declined to negative 16 percent compared to negative 6.7 percent for the first nine months of 2021.

Allbirds maintains full year guidance

Allbirds is maintaining its guidance targets for full year 2022 and continues to expect adjusted net revenue of 305 million dollars to 315 million dollars, representing growth in the range of 10 percent to 14 percent, including an estimated FX impact of 275-350 bps, versus fiscal 2021.

Adjusted gross profit is expected of 150 million dollars to 157.5 million dollars , which at the midpoint of our adjusted net revenue and adjusted gross profit targets represents a gross margin of 49.5 percent. The company expects adjusted EBITDA loss of 42.5 million dollars to 37.5 million dollars.

For the fourth quarter, adjusted net revenue is expected to be between 92 million dollars to 102 million dollars, representing growth in the range of negative 5 percent to positive 5 percent versus the fourth quarter of fiscal 2021 and adjusted EBITDA loss of 8.5 million dollars to 3.5 million dollars.