Allbirds Q3 is strong but losses widen as it invests in growth
Allbirds enjoyed a “strong” Q3 with the three months to the end of September seeing net revenues surging 33% year-on-year. The rise reflected the shoe-specialist-turned-apparel-maker being “at the forefront of a generational change in consumer values and purchase behaviors”, the company said.
Revenue reached $62.7 million and as well as the impressive increase on an annual basis, it was up 40% compared to the same quarter in 2019.
But the firm remained loss-making with a GAAP net loss of $13.8 million — wider than the $7 million a year earlier — and an adjusted EBITDA loss of $6.3 million. It had an EBITDA loss of $3.8 million in Q3 a year ago.
Allbirds is still at a relatively early stage in its development and losses are a regular occurrence for such companies as they invest in growth.
The company has continued to invest in its stores network and opened four in the period, ending the third quarter with 31 locations.
As well as store opening costs, it had to fund increased headcount, and public company preparation costs, plus higher marketing expenses.
But gross profit increased 36% to $33.9 million on the year and the gross margin expanded 120 basis points to 54.1%. The increase in gross margin primarily reflected the “favorable product mix, sales of higher gross margin products such as apparel, and a decrease in product costs, partially offset by higher warehouse and logistics costs”.
Co-founder and co-CEO Joey Zwillinger said the performance “reflects solid execution by our teams and robust global demand for the Allbirds brand”.
The higher revenue was “primarily attributable to robust consumer demand in the United States and a strong response to new footwear and performance apparel product launches”. Net revenue in the United States actually increased 42% to $47.7 million and international net revenue increased 10% to $15 million year-on-year.
For the full year, the firm forecast net revenue of $270 million-$272 million, representing growth in the range of 23%-24% compared to 2020 and 39%-40% versus fiscal 2019. Adjusted EBITDA should be a loss of $17 million-$15 million, including an estimated $5 million of public company costs.
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