Allbirds, Inc. topped market estimates for quarterly revenue as consumers splurged on its eco-friendly shoes during the holiday season. Revenue jumped 23 percent in the fourth quarter and 27 percent in the year while forecasts call for sales to expand in the range of 28 percent to 32 percent in the current year.
In the fourth quarter, revenue grew 22.6 percent to $97.2 million, topping Wall Street’s consensus estimate of $91.9 million. Sales increased 43 percent compared to the fourth quarter of 2019.
“This quarterly growth rate marks an acceleration of our two-year growth rate from the 40% we posted in the third quarter,” said Joey Zwillinger, co-founder and CEO, on a call with analysts. “We experienced notable strength in the U.S., punctuated by a strong holiday season. Consumers had a positive reaction to product offerings, particularly our Fluff footwear collection, our slippers that we call the Dwellers, the re-release of Smallbirds for kids, and on the apparel side to our comfy and cozy loungewear.”
He described the peak period of Black Friday through Cyber Monday as “exceptional,” including two record sales days.
“We also delivered a superior customer experience on these high-volume days, evidenced by our stellar NPS scores,” said Zwillinger. On Black Friday, more than ten of its U.S. stores ranked in the 100 Club, meaning they recorded an NPS of 100.
During December, the NPS scores grappled with COVID-19 exposures that forced Allbirds to temporarily shut down several of store locations in the U.S. The Omicron surge also impacted its international markets.
“Cyber Monday was the first time we utilized markdowns on old models and colors as well as on styles with broken size runs, and we were encouraged by our consumer’s reaction, including full-price sales that alone would have been our biggest day ever,” said Zwillinger.
By region, net revenue in the U.S. in the fourth quarter increased 25 percent to $76.9 million and international revenue increased 14 percent to $20.3 million compared to the fourth quarter of 2020.
Gross margins improved 45 basis points to 50.2 percent. The increase in gross margin primarily reflects favorable channel and geographic mix, sales of higher gross margin products and cost savings, partially offset by higher distribution center and logistics costs.
SG&A expense in the fourth quarter was $36.7 million, or 37.7 percent of revenue, compared to $25.5 million, or 32.1 percent of revenue, in the fourth quarter of 2020. The year-over-year increase is primarily attributable to expenses for the opening of four new stores during the period and operational expenses for 13 additional stores opened since the fourth quarter of 2020, increased corporate headcount and public company preparation and operating costs. Marketing expenses totaled $18.5 million compared to $23.6 million in the year-ago period but improved as a percentage of revenue to 19.1 percent from 29.8 percent a year ago. The decrease in marketing expenses as a percent of revenue is primarily due to increased marketing efficiency in its digital channels and a greater mix of physical retail.
GAAP net loss in the fourth quarter of 2021 was $10.4 million compared to a net loss of $9.4 million in the fourth quarter of 2020 and net loss margin was (10.7) percent compared to (11.8) percent in the fourth quarter of 2020. The loss of 9 cents a share in the period compared to Wall Street’s consensus expectations of an 8 cent loss.
Adjusted EBITDA in the fourth quarter of 2021 was $0.4 million compared to a loss of $5.3 million in the fourth quarter of 2020, and adjusted EBITDA margin increased by 710 basis points to 0.4 percent versus (6.7) percent a year ago.
For the year, net revenue for the full year 2021 increased 27 percent to $277.5 million compared to $219.3 million for the full year 2020 and increased 43 percent compared to the full year 2019. Sales arrived above Allbird’s guidance provided on November 30 of sales in the range of $270 million to $272 million.
Net revenue in the U.S. for the full year 2021 increased 26 percent to $209.8 million and international net revenue increased 29 percent to $67.7 million compared to the full year 2020. The increases are primarily attributable to consumer demand across geographies and channels and new products.
Allbird’s net revenue increase was driven by growth in its digital and retail channels. It achieved net revenue growth of 16 percent in the digital channel and 112 percent in its retail channel. The company also opened 13 new stores during the period, ending the year with 35 locations.
GAAP net loss for the full year 2021 was $45.4 million compared to a net loss of $25.9 million for the full year 2020 and a net loss margin was (16.4) percent compared to (11.8) percent for the full year 2020.
Full-year 2021 Adjusted EBITDA loss improved 24 percent to $11.7 million compared to $15.4 million for the full year 2020. Adjusted EBITDA margin expanded 280 basis points to (4.2) percent compared to (7.0) percent a year ago. Adjusted EBITDA came in ahead of Allbird’s guidance calling for a loss of $17 million to $15 million
Looking ahead, Allbirds forecasts revenue in the current year in the range of $355 million to $365 million, representing growth in the range of 28 percent to 32 percent versus fiscal 2021 and 62 percent to 66 percent versus fiscal 2020.
Adjusted EBITDA is expected in the range of negative $13 million to negative $9 million, including an estimated $8 million of public company costs. Carbon footprint reduction is targeted at 6 percent for its Top 10 products, aligned with its Allbirds Flight Plan to reduce by 25 percent by the end of 2025 and 95 percent by 2030.
For the first quarter, Allbirds’ net revenue is expected in the range of $60 million to $62 million, representing growth in the range of 21 percent to 25 percent versus the first quarter of fiscal 2021 and 42 percent to 47 percent versus the first quarter of fiscal 2020. Adjusted EBITDA is projected in the range of negative $13 million to negative $11 million, including an estimated $2 million of public company costs.
Photo courtesy Allbirds
