24 Feb Allbirds’ Q4 Revenues Climb 23 Percent
Allbirds, Inc. reported a slightly wider net loss in the fourth quarter but adjusted EBITDA showed improvement as gross margins expanded 45 basis points and revenue increased 23 percent. The sustainable footwear brand forecasted growth of 28 percent to 32 percent in the current year.
Quarter and Full Year Highlights
- Full-year 2021 net revenue rose 27 percent to $277.5 million compared to 2020 and increased 43 percent compared to 2019.
- Fourth-quarter 2021 net revenue increased 23 percent to $97.2 million compared to the fourth quarter of 2020 and increased 43 percent compared to the fourth quarter of 2019. Fourth-quarter 2021 was Allbirds’ highest sales quarter to date.
- Full-year 2021 gross profit increased 30 percent to $146.7 million compared to 2020. Full-year gross margin expanded 145 basis points to 52.9 percent compared to 2020, and fourth-quarter gross margin expanded 45 basis points to 50.2 percent compared to the fourth quarter of 2020.
- Full-year 2021 GAAP net loss of $45.4 million, or $0.65 per basic and diluted share. Fourth-quarter 2021 GAAP net loss of $10.4 million, or $0.09 per basic and diluted share.
- Full-year 2021 adjusted EBITDA loss of $11.7 million, an improvement of 24 percent compared to 2020. Fourth-quarter 2021 adjusted EBITDA was $0.4 million, an improvement of 108 percent compared to the fourth quarter of 2020.
- Physical retail channel sales grew 112 percent in 2021 compared to 2020. Opened 13 stores during the year, ending 2021 with 35 locations worldwide.
- Reduced the carbon footprint of ifs Top 10 products by 14 percent in 2021 compared to 2020.
Sales of $97.2 million topped Wall Street’s consensus estimate of $91.9 million. The loss of 9 cents a share compares to expectations of an 8 cent loss.
“We are pleased to report a strong finish to 2021, with Q4 representing our largest revenue quarter on record, headlining financial performance ahead of our guidance targets,” said Joey Zwillinger, co-Founder and co-CEO. “Our results reflect strong global demand for the Allbirds brand and best-in-class execution by our teams during a period of ongoing macro challenges. Fourth-quarter revenue grew 23 percent year-over-year and 43 percent versus 2019, representing an acceleration of our two-year growth rate. In the quarter, we saw strength across retail and digital channels, as well as geographies. The quarter culminated with a remarkable holiday season, which included the two biggest sales days in company history, highlighting the power of our omnichannel model.”
“We are also proud to have made significant progress in 2021 under our Allbirds Flight Plan—our blueprint for reducing our already-low product emissions by 50 percent by the end of 2025 and 95 percent by 2030. For the year, we reduced our carbon footprint per unit by 14 percent compared to 2020. This is particularly gratifying as we continue to prioritize creating better products in a better way. We see our 2022 product roadmap as our strongest yet. Importantly, we believe that our innovation engine, continued retail store expansion, and increasing international presence will continue to drive an accelerating topline growth rate in 2022, helping us march down the path towards durable growth and our medium-term profitability targets while furthering our goal of combating climate change.”
Fourth Quarter Operating Results
Net revenue in the fourth quarter of 2021 increased 23 percent to $97.2 million compared to $79.3 million in the fourth quarter of 2020 and increased 43 percent compared to the fourth quarter of 2019. The increase is primarily attributable to consumer demand during the holiday season in the United States, which it was able to take advantage of due to its omnichannel model, the strongest new product quarter of the year, and its inventory position entering the quarter. Net revenue in the U.S. increased 25 percent to $76.9 million and international net revenue increased 14 percent to $20.3 million compared to the fourth quarter of 2020.
Gross profit in the fourth quarter of 2021 totaled $48.8 million compared to $39.4 million in the fourth quarter of 2020, and gross margin expanded 45 basis points to 50.2 percent compared to 49.7 percent in the fourth quarter of 2020. 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.
Selling, general and administrative (SG&A) expense in the fourth quarter of 2021 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 in the fourth quarter of 2021 totaled $18.5 million compared to $23.6 million in the fourth quarter of 2020 and improved as a percentage of revenue to 19.1 percent from 29.8 percent a year ago. The decrease in marketing expenses as a percentage 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.
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.
Full Year Operating Results
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. 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.
Gross profit for the full year 2021 totaled $146.7 million compared to $112.7 million for the full year 2020, while gross margin expanded 145 basis points to 52.9 percent compared to 51.4 percent in full-year 2020. The increase in gross margin primarily reflects favorable channel and geography mix, sales of higher gross margin products and cost savings, partially offset by higher distribution center and logistics costs.
SG&A expense for the full year 2021 was $122.2 million, or 44.0 percent of revenue, compared to $86.7 million, or 39.5 percent of revenue, for the full year 2020. The year-over-year increase is primarily attributable to expenses for the opening of 13 new stores during the period and continued operational expenses for stores opened during 2020, increased corporate headcount and public company preparation and operating costs. Marketing expenses for the full year 2021 totaled $57.3 million compared to $55.3 million for the full year 2020 and improved as a percentage of revenue to 20.7 percent from 25.2 percent a year ago.
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.
Net revenue of $277.5 million came in above Allbird’s guidance provided on November 30 of sales in the range of $270 million to $272 million. Adjusted EBITDA of negative $11.7 million came in ahead of guidance calling for a loss of $17 million to $15 million, including an estimated $5 million of public company costs
Balance Sheet Highlights
Allbirds ended the year with $289 million of cash and cash equivalents, which includes net offering proceeds from our IPO of $231.6 million, after deducting underwriting discounts, commissions, and offering costs. Allbirds also ended the year with $40 million available under our revolving credit agreement. Inventories totaled $107 million, an increase of 80 percent compared to $59 million at the end of 2020. The increase was attributable to a combination of higher in-transit inventory, given extended lead times from ongoing supply chain disruptions, as well as the impact of higher inbound freight costs.
2022 Financial & Carbon Footprint Reduction Guidance Targets
Allbirds provided the following guidance targets for full-year 2022.
- Net revenue 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;
- Gross profit of $187.5 million to $195 million, which at the midpoint of its net revenue and gross profit targets represented a gross margin percent of 53.1 percent, a 27 bps increase versus fiscal 2021;
- Adjusted EBITDA of negative $13 million to negative $9 million, including an estimated $8 million of public company costs; and
- Carbon footprint reduction target of 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.
Allbirds provided the following financial guidance targets for the first quarter of 2022:
- Net revenue 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; and
- Adjusted EBITDA of negative $13 million to negative $11 million, including an estimated $2 million of public company costs.