Allbirds profit dips in Q3 despite revenue increase
Allbirds, the B Corp footwear and apparel brand, has reported gross profit of £28.2 million ($32.5 million) for Q3 2022, a £1.2 million ($1.4 million) drop compared to £29.45 million ($33.9 million) in Q3 2021.
The company however saw an 16% rise in revenues during Q3 2022, reaching £63.2 million ($72.7 million). The rise represents a 54% increase compared to the same period in 2020. For the nine months up to 30 September, net revenue increased 18.5% year on year to $213.6m and 52.5% compared to 2020.
Allbirds attributes the rise in revenues to an increase in the number of orders, primarily driven by retail store sales, and an increase in average order value. Allbirds recently announced continued growth in the UK with two new retail spaces in iconic London destinations - Selfridges and King's Road.
The company suggested that the decrease in gross profit margins primarily reflect costs related to its simplification initiatives, higher logistics costs, and the impact of unfavourable currency exchange rates.
Allbirds ended the quarter with $180.7 million of cash and cash equivalents and $40 million available under its revolving credit agreement. Inventories totalled $126.5 million, an increase of 27.4% compared to Q3 2021 and an increase of 3.4% compared to 30 June 2022.
Joey Zwillinger, Allbirds Co-Founder and Co-CEO, commented: “We delivered a strong quarter in what remains a highly dynamic operating environment. I am proud that we exceeded our Q3 adjusted revenue and adjusted EBITDA guidance targets while also delivering on our sustainability goals.
“Looking ahead to year end and 2023, we continue to expect macro headwinds to persist but believe that our brand, our growth strategy, and simplification initiatives position us well to emerge strongly from this period. Thanks to the team’s hard work I remain confident in our ability to continue to execute into the holiday season and next year.”
“November also marks the one year anniversary of our IPO, a critical step in building Allbirds into a 100 year brand while setting a new industry standard for sustainable business for others to follow. We recently released our “Flight Status” sustainability report for 2021, which shows that we were able to reduce our average product carbon footprint by 12% while growing our net revenues by 27% in 2021.
“We remain on track to deliver on our goal to cut our already low per product carbon footprint in half by 2025 and achieve near zero by 2030, while also delivering on our Sustainability Principles & Objectives Framework commitments first enumerated in our S-1. I could not be more proud of what we have achieved and remain tremendously optimistic about the future.”
During the third quarter, Allbirds also launched its 100% plastic-free, 100% vegan plant leather that produces approximately 88% less carbon than traditional bovine leather and approximately 75% less carbon than other synthetic leather alternatives.