Macro environment impacts Allbirds business in first quarter – WWD – Advice Eating

Losses at Allbirds Inc. widened in the first quarter despite solid sales gains in the US as the brand’s international business was impacted by the war in Ukraine and lockdowns in China. As a result of these headwinds, which are expected to continue, the company lowered its guidance for the second quarter and full year.

For the period ended March 31, the San Francisco-based sustainable footwear and apparel brand announced that its GAAP net loss was $21.9 million, or 15 cents a share, compared to a net loss of $13.5 million. Dollars, or 25 cents a share, for the first quarter of 2021. Adjusted earnings before interest, taxes, depreciation and amortization were a loss of $12.2 million for the first quarter compared to a loss of $6.9 million in the first quarter of 2021.

Revenue was strong overall, with the company reporting a 26 percent increase in net sales to $62.8 million over the first quarter of 2021 and up 49 percent over the first quarter of 2020.

In the US, sales increased 35 percent to $48.9 million in 2021 compared to the same period. And at its 39 physical locations around the world, revenue increased 129 percent compared to the prior-year first quarter. International sales, however, were weak, rising just 3 percent to $13.8 million during the period from $13.4 million in the year-ago quarter.

In after-market trading on Tuesday, the company’s stock slipped below $4 a share and shed more than 15 percent after earnings were announced.

Mike Bufano, Chief Financial Officer, said, “We delivered a strong performance in the first quarter, with net revenue growth of 26 percent, beating our guidance, gross profit up 26 percent year-on-year despite higher supply chain costs, and a Adjusted EBITDA within our guidance target range. Looking ahead to the second quarter and the remainder of 2022, we expect external headwinds to continue to impact our international business and are therefore reflecting a more cautious outlook in our updated 2022 guidance.”

Bufano said the company believes these “external headwinds are temporary” and that the company is “confident in our ability to meet our medium-term financial goals, which include net sales growth of 20 percent to 30 percent, gross margin in excess of 60 percent and on an adjusted EBITDA margin in the high teens.”

As a result, the company updated its guidance for the second quarter and full year, saying it expects net sales of $75 million to $79 million in the second quarter, up 10 percent to 16 percent, and Adjusted EBITDA of minus $14 million to $14 million -dollars minus 11 million dollars. Analysts had expected revenue of $88.2 million for the second quarter

For the year, revenue is forecast to reach $335 million to $345 million, up 21 percent to 25 percent, and Adjusted EBITDA to be in the range of minus $25 million to minus $21 million . However, the company previously said it expected sales of $355 million to $365 million.

Joey Zwillinger, Co-Founder and Co-CEO, said: “Global turmoil since our last earnings report, including Russia’s invasion of Ukraine and China’s COVID-19 restrictions, impacted the performance of our international business in the first quarter and is expected to continue into the Remainder of 2022. These factors were more than offset by the excellent performance of our US business, which delivered 35 percent net sales growth in the first quarter. Net sales growth for the entire business accelerated again in the quarter, on both a one-year and a two-year basis, at 26 percent and 49 percent, respectively.”

He said despite the challenging macro environment and “external headwinds,” Allbirds will remain focused on driving sales through the delivery of product innovations, growing its store portfolio and international expansion, “with these pillars of growth being highlighted in 2022 by what In our opinion, the most exciting new product roadmap is in the company’s history. While we adopt a more conservative outlook in the near-term given the temporary external headwinds impacting our international business, we expect strong full-year revenue growth of 21-24 percent in 2022. Importantly, we remain confident in our digital – Competent omnichannel operating model will support continued growth and position us to create meaningful value for our shareholders in the years to come.”

Tim Brown, co-founder, highlighted a number of product highlights during this period, including the latest collaboration with Adidas for lightweight running shoes, which sold out 90 percent in three days. Zwillinger also said that Allbirds’ “core lifestyle offering” has experienced increased demand as the COVID-19 pandemic recedes.

The brand’s first foray into wholesale struck in the quarter at Public Lands, a division of Dick’s Sporting Goods, and Zalando, the German online retailer, and leading indicators are “positive” suggesting the third-party sale is a successful one Road to further construction is sales, said Zwillinger.

Allbirds stock has been in a tailspin for some time, having fallen more than 67 percent since the end of 2021 and now trading at around $4 a share. When the company went public last November, its stock was trading at $21.21. But Zwillinger said in the second quarter that the company will hit $1 billion in lifetime revenue since its inception six years ago.

Leave a Comment