Allbirds appoints new CFO as 2022 sales rise but losses widen
Sustainable footwear and apparel brand Allbirds saw full year 2022 net revenue increase 7% to £246.3 million ($297.8 million) compared to 2021, despite a drop in Q4 revenues and an increase in losses.
Fourth quarter net revenue decreased 13% to £69.6 million ($84.2 million) compared to fourth quarter 2021. The San Francisco-based company said Q4 revenues were hit a decrease in the number of orders, and an estimated $3.2 million negative impact from foreign exchange.
Gross profit in the quarter totalled £30 million ($36.3 million) compared to £40.3 million ($48.8 million) in the fourth quarter of 2021, and gross margin declined to 43.1% compared to 50.2% in the fourth quarter of 2021. The decrease in gross margin is primarily due to the previously announced discontinuation of certain first generation apparel, as well as an increase in promotions.
Selling, general, and administrative expense (SG&A) was £34.4 million ($41.6 million), or 49.5% of net revenue, compared to 37.7% of net revenue in the fourth quarter of 2021. The increase is primarily attributable to expenses for the opening of six new stores during the period and operational expenses for 23 additional stores opened since the fourth quarter of 2021.
Net loss was £20.6 million ($24.9 million) compared to £8.6 million ($10.4 million) in the fourth quarter of 2021, and net loss margin was 29.5% compared to 10.7% in the fourth quarter of 2021.
Looking in more detail at the full year results, the rise in revenues can be attributable to an increase in the number of orders and an increase in third party sales. In the US, where net revenue increased 9.5% from to 2021 to £190 million ($229.8 million), retail store sales was the primary driver. International net revenue was roughly flat compared to 2021 at £56.2 million ($68 million), as the business was negatively impacted by external headwinds, including continuing COVID-19 restrictions in China and the impact of the crisis in Ukraine in Europe,
Gross profit totalled £106 million ($129.6 million) compared to £121.3 million ($146.7 million) for the same period in 2021, whilst gross margin declined to 43.5% versus 52.9% in 2021. Net loss was £83.8 million ($101.4 million) compared to £37.5 million ($45.4 million) in 2021, and net loss margin was 34.0% compared to 16.4% in 2021.
The company also announced the appointment of Annie Mitchell as Chief Financial Officer, effective 24 April 2023. She will succeed Mike Bufano, who will be stepping down from Allbirds and will remain with the company through mid-May.
Mitchell is an experienced finance executive in the retail industry and joins Allbirds from Gymshark, where she is wrapping up her role as Vice President of Finance and Insights. Prior to that, she spent 10 years at Adidas where she held various positions within the finance organisation, including most recently as Senior Vice President of Finance (CFO) of adidas North America.
Mitchell will be tasked with assisting with Allbirds' strategic transformation plan to reignite growth in the coming years, as well as improve capital efficiency, and drive profitability. The plan focuses on four key areas including reigniting product and brand, optimising US stores and slow pace of openings, evaluating transition of international go-to-market strategy, and improve cost savings and capital efficiency.
Joey Zwillinger, Co-Founder and Co-CEO, commented: “2022 marked the end of our first full year as a public company and while we made important progress, the year came to a challenging close, with results below our expectations due to both execution and macro challenges. We need to improve performance, and are announcing a new transformation plan to reinvigorate the business with an emphasis on profitable growth. Our focus is on four key areas to help Allbirds reconnect with our core consumers and meet new customers in a more capital efficient and profitable way.”
“We founded Allbirds with a vision to create better products in a better way – and we are aligning our operational and financial execution with the strength of that vision. Our brand fundamentals remain strong, with best-in-class NPS and customers who look to us for our quality, comfort, design and sustainability. I am extremely proud of every member of the Allbirds Flock knowing they have the discipline and focus to execute on our new priorities and prove that together, we can create value for consumers and shareholders alike.”