Allbirds’ net loss nearly doubled in the third quarter

Dive brief:

  • In its first report on earnings as a publicly traded company, Allbirds said on Tuesday that the third quarter net sales increased by 33% year over year to $ 62.7 million. Compared to 2019, net sales increased by 40%.
  • The sneaker brand DTC’s losses widened in the third quarter: operating loss increased 64.3% year-on-year to $ 11.9 million, while net loss nearly doubled to 13 , $ 8 million, according to a press release from the company.
  • Allbirds opened four stores during the quarter, bringing its total to 35 stores.

Dive overview:

Future out of its IPO last month, Allbirds exceeded expectations in its first report on earnings as a publicly traded company.

“Revenue was strong across all channels and geographies, growing 33% year-over-year, with notable strength in physical retailing in the United States,” Co-founder and co-CEO Joey Zwillinger said in a statement, adding that the brand has seen “a strong consumer response” to its new offerings, including its performance clothing line.

But even though Allbirds exceeded revenue expectations, brand losses continued to grow in the third quarter, which affected many DTC brands. To help offset the costs of acquiring customers online – which has often come at the expense of profitability – many digital natives brands have turned to physical commerce.

Allbirds appears to be leaning more into its offline presence, which started in 2017 when it opened its first store. The brand continued its store expansion in the fourth quarter, opening stores in Denver, Chicago, Boston area and Paramus, New Jersey.

Zwillinger during a call with analysts on Tuesday said that loyal customers buying through its channels – online and in-store – “are the most valuable to us” because “these customers spend 1.5 times compared to digital-only loyal customers, which gives us more reason to continue to expand our store “.

The brand provided guidance for the full year, forecasting 24% year-on-year net revenue growth (up 40% from 2019) to reach between $ 270 million and $ 272 million . Adjusted EBITDA is expected to be between minus $ 15 million and minus $ 17 million, including public company costs of $ 5 million.

But analysts believe Allbirds is in the early stages of multi-year growth. Telsey Advisory Group CEO and Research Director Dana Telsey predicts a compound annual sales growth rate of 26% to $ 700 million in 2025, up from $ 218 million in 2020, according to an emailed note . Telsey also predicts that EBITDA will turn positive in 2023 and reach $ 45 million in 2025, driven by Allbirds’ continued retail expansion, expansion of international markets and expansion of its product offering.

Ann J. Cox