Allbirds (BIRD) reports that Q4 2021 results are in line with estimates

A woman walks past an Allbirds store in the Georgetown neighborhood of Washington, DC on Tuesday, February 16, 2021.

Al Drago | Bloomberg | Getty Images

Allbirds shares tumbled in after-hours trading on Wednesday, as the sneaker retailer announced rising fourth-quarter expenses that weighed on profits and overshadowed double-digit sales growth.

Opening of retail stores and increasing the number of employees led to higher expenses year after year, the company said. Other headwinds are logistics costs and temporary labor shortages due to the Covid-19 pandemic, Allbirds said.

Allbirds’ first-quarter sales guidance also fell short of analysts’ expectations as the retailer anticipates stronger growth later in the year. The sales forecast for the full year is more optimistic.

Allbirds stock is down 60% since its first trade of $21.21 when it debuted on the Nasdaq last November. Shares hit an all-time intraday low of $7.98 on Wednesday. Extended trading was down as much as 8%.

Here’s how Allbirds compared to Wall Street expectations in the fourth quarter, based on a survey of analysts by Refinitiv:

  • Loss per share: 9 cents versus an expected loss of 9 cents
  • Revenue: $97.2 million versus $91.8 million expected

Net loss for the three months ended December 31 increased to $10.7 million, or 9 cents a share, from a loss of $9.4 million, or 18 cents a share, a year ago. That was in line with estimates by analysts polled by Refinitiv.

Revenue rose 23% to $97.2 million from $79.3 million a year earlier, beating estimates of $91.8 million.

In 2021, Allbirds said its digital business grew 16% year-over-year and accounted for over 80% of total revenue. Its physical retail business, meanwhile, has more than doubled as the company continued to open new stores. To date, the company operates 37 locations worldwide.

Allbirds said it was able to benefit from strong consumer demand during the U.S. holiday season thanks in part to its inventory coming into the quarter.

Co-CEO and co-founder Joey Zwillinger said Allbirds had the two biggest sales days in its history over the holiday season, “which underscores the power of our omni-channel model.”

For 2022, Allbirds sees sales of between $355 million and $365 million. Analysts were looking for $353 million. Adjusted losses before interest, taxes, depreciation and amortization are forecast to be in a range of $9 million to $13 million, including an estimated $8 million in public company costs.

First quarter revenue will be between $60 million and $62 million, down from the $63.7 million average revenue analysts had been forecasting.

During a conference call with analysts Wednesday night, management touted upcoming efforts that it hopes will boost sales and profits. Without naming specific companies, Allbirds said it plans to move further into wholesale by selling through third parties. As an example, she cited a previous partnership with Nordstrom.

Co-founder Tim Brown added that Allbirds will continue to innovate with new shoes and apparel to give customers a reason to return to its stores and websites.

Last week, Allbirds announced the debut of its own resale platform, Allbirds ReRun, which it expects will lead to increased repeat business and brand loyalty. As part of the program, the retailer offers credit to people who trade in their used Allbirds shoes.

The company said it will take “deliberate pricing action” in 2022 to fight inflation, which should add 1% to 3% to revenue growth in 2022, depending on the timing of its efforts.

Allbirds said there was virtually no drop in consumer demand after making small price increases over the past year and gave it the confidence to do so again in 2022.

Read Allbirds’ full financial press release here. Allbirds (BIRD) reports that Q4 2021 results are in line with estimates

Gary B. Graves

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