Allbirds Looks Beyond Losses in First Quarterly Report
Allbirds is looking to fly sustainably — but is still working on how to do that and turn a profit at the same time.
In its first quarterly report as a public company, the buzzy sneaker company posted third-quarter net losses of $13.8 million, or 25 cents a share, as it paid for new stores, more employees and costs associated with its November IPO. The red ink compared with year-ago losses of $7 million, or 13 cents.
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Revenues for the quarter ended Sept. 30 had a stronger showing, rising to $62.7 million from $47.2 million a year earlier.
Investors were a little wary and sent shares of the company down 6.4 percent to $18 in after-hours trading following the update.
Joey Zwillinger, cofounder and co-chief executive officer, said: “Revenue was strong across channels and geographies, growing 33 percent year-over-year, with notable strength in U.S. physical retail. Importantly, we saw strong consumer response in the quarter to our new product innovation, including our new Perform Apparel line.”
But clearly Zwillinger & Co. are looking beyond a single quarter.
“We’re at the forefront of a generational change in consumer values and purchase behaviors, led by our mission to make better things in a better way — which means we’re aligning our purpose of reversing climate change with our product quality and financial outcomes,” Zwillinger said. “Looking ahead, we believe Allbirds is uniquely positioned in an exceptionally large and growing market. As we continue to execute our strategic plan, we are focused on accelerating growth, creating value for our shareholders and building for a multidecade journey.”
Zwillinger and his co-CEO and cofounder Tim Brown retain significant control of the firm by virtue of their Class B shares, which have 10-times the voting rights compared with the Class A shares sold to the public. (Allbirds raised $252.8 million in the offering).
But company executives were careful to make clear that Allbirds was working to drive growth and to reach profitability while keeping true to its sustainable mission.
Zwillinger said the company has served more than 4 million customers since being launched in 2016 while building out a vertical production model with both a digital heritage and a growing fleet of stores.
“Now, we simply need to reach more customers,” he said. And part of that means meeting more people IRL.
Allbirds opened its first store in 2017 and now has 35 doors, including 23 in the U.S.
“Each store has strong stand-alone, four-wall economics,” said Zwillinger, adding that it is the omnichannel customer who is the brand’s strongest customer, spending 1.5-times more than digital-only customers.
The co-CEO laid out the company’s growth plan relying on store growth, international and product innovation.
That last category includes apparel, which Allbirds has been slowly rolling out, having started its lifestyle proposition at the shoe. Apparel is expected to represent about 10 percent the business for 2021.
This year, the company plans to post net revenues of $270 million to $272 million, representing growth of 23 to 24 percent — or an expansion of 39 to 40 percent since before the pandemic in 2019.
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