Allbirds, citing logistics, currency effects, and lower international sales as significant year-over-year headwinds, is taking a more cautious view of FY22. The six-year-old company is forecasting annual sales of $335 to $345 million, 18 percent gross profit improvement to a range of $170 to $177.5 million and adjusted Ebitda of -$21 to -$25 million. The combination of logistics/distribution, outbound shipping costs and currency are forecast to have a 0.45 to 0.50 percent impact on the gross margin rate over two years.
In the first quarter, the company reported a 91.5 percent increase in its year-over-year operating loss to $19,979,000 from a loss of $10,428,000 as revenues rose 26.4 percent to $62,763,000 from $49,637,000. The comprehensive net loss, including currency impact, was $22,552,000 against a loss of $15,453,000. The adjusted Ebitda loss, impacted by higher stock-based compensation expense and depreciation and amortization, increased nearly 78 percent to $12.2 million.
| Allbirds | |||
|---|---|---|---|
| Quarter ended March 31 ($ thousand) | |||
| 2022 | 2021 | Change | |
| Net revenue | 62,763 | 49,637 | 26.4% |
| Cost of revenue | 30,160 | 23,811 | 26.7% |
| Gross profit | 32,603 | 25,826 | 26.2% |
| Operating expense | 52,582 | 36,254 | 45.0% |
| Operating profit | -19,979 | -10,428 | 91.6% |
| Interest expense | 37 | 51 | -27.5% |
| Other expense | 100 | 2,691 | -96.3% |
| Pre-tax | -20,116 | -13,170 | -52.7% |
| Tax | 1,762 | 352 | 400.6% |
| Net | -21,878 | -13,522 | -61.8% |
| Earnings per share (diluted) | -0.15 | -0.25 | -40.0% |
| Source: Allbirds | |||
Outside the U.S., the conflict in Ukraine, Covid-19-related shutdowns in China and headwinds in EU consumer spending contributed to flat year-over-year revenues at $13.8 million and are expected to have an overall $15 million impact on the segment. Allbirds wants to eventually scale up the EU to be at least as large as its home market but realizes that may be difficult in 2022 given the persistent macro trends there. The current FY22 market outlook calls for mid-single-digit revenue growth outside the U.S., up low teens when excluding currency impact. Zalando is the brand’s first third-party retailer in the EU.
U.S. sales, helped by four additional stores including one in New York City’s Flatiron District, increased 35 percent to $48.9 million. Retail sales from 27 doors pushed U.S. retail sales 150 percent higher during the period and the brand opened its first third-party retailer, Dick’s Sporting Goods-owned Public Lands.
| Allbirds - Revenue by region | |||
|---|---|---|---|
| Quarter ended March 31 ($ thousand) | |||
| 2022 | 2021 | Change | |
| U.S. | 48,944 | 36,258 | 35.0% |
| Abroad | 13,819 | 13,379 | 3.3% |
| Total | 62,763 | 49,637 | 26.4% |
| Source: Allbirds | |||
Full-year U.S. revenues are predicted to increase in the upper 20 percent range this year, Allbirds implemented its second price increase in seven months in March as it “utilized promotions surgically” during the first quarter to manage its inventory level, which was up 10.8 percent to $118.5 million at period end.
From a product perspective, Allbirds last week introduced its third performance running shoe, the True Flyer, which it believes will increase the brand’s credibility in the segment. The model features sustainable components and has a low carbon footprint.
