US-based sustainable footwear and apparel brand, Allbirds, has reported a 7.3 per cent increase in net revenue to $297.8 million in fiscal 2022 (FY22) compared to the previous year. However, the company’s gross profit in FY22 declined to $129.6 million, and gross margin decreased to 43.5 per cent due to various factors, including the discontinuation of certain first-generation apparel, higher logistics costs, unfavourable foreign exchange rates, and a lower mix of international sales.
In the US, where net revenue increased by 9.5 per cent to $229.8 million, retail store sales were the primary driver of growth, while international net revenue remained relatively flat at $68 million, the company said in a press release.
In FY22, international net revenue was roughly flat compared to FY21 at $68 million, as the business was negatively impacted by external headwinds, including continuing COVID-19 restrictions in China, a decrease in discretionary consumer spending as a result of increasing inflation, the impact of the crisis in Ukraine in Europe, and unfavourable FX rates.
Allbirds’ selling, general, and administrative expenses increased to $166.7 million, or 56 per cent of net revenue, primarily driven by expenses from opening 23 new stores, increased headcount, and recurring public company operating costs.
The company reported a net loss of $101.4 million in FY22 compared to $45.4 million in the previous year, and an adjusted EBITDA loss of $60.4 million compared to a loss of $11.7 million in FY21. Adjusted EBITDA margin declined to minus 20.3 per cent compared to minus 4.2 per cent for FY21.
In the fourth quarter (Q4) of FY22, Allbirds’ net revenue decreased by 13.4 per cent to $84.2 million compared to the same period in the previous year, while gross profit totalled $36.3 million, and gross margin declined to 43.1 per cent. The company’s net loss was $24.9 million, and adjusted EBITDA was a loss of $12.5 million. Furthermore, the adjusted EBITDA margin declined to minus 14.9 per cent compared to 0.4 per cent in the fourth quarter of FY21.
For Q1 FY23, Allbirds has provided financial guidance targets of net revenue between $45 million to $50 million, a decrease of 20 per cent to 28 per cent compared to the first quarter of fiscal 2022, and an adjusted EBITDA loss of $29 million to $26 million.
“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,” said Joey Zwillinger, co-Founder and co-CEO. “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.”