Allbirds sees Q3 profits fall despite strong revenues
The company also blamed costs related to its simplification initiatives, higher logistics costs, and the impact of unfavourable FX rates for the impact on its gross margin
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US footwear retailer Allbirds, which operates three stores in London and a concession in Selfridges, has revealed its gross profits declined 4% in Q3 to $32.5m (£28.2m), down from $33.9m (£33.9m) the previous year.
The decline comes despite it experiencing an uptick in revenues, up 15.9% YoY to $72.7m (£63.3m). It said the increase was primarily attributable to an increase in the number of orders, primarily driven by retail store sales, and an increase in average order value.
The brand also revealed selling, general, and administrative expenses (SG&A) was $45.4m (£39.5m), or 62.5% of net revenue, compared with $33m (£28.7m), or 52.6% of revenue, in the third quarter of 2021.
The increase was primarily attributable to expenses for the opening of eight new stores during the period and operational expenses for 23 additional stores opened since the third quarter of 2021, increased headcount, and recurring public company operating costs.
The company also blamed costs related to its simplification initiatives, higher logistics costs, and the impact of unfavourable FX rates for the impact on its gross margin.
Joey Zwillinger, co-founder and Co-CEO, said: “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.”
