Strong retail sales and increasing average order value help Allbirds see revenues rise in the third quarter of 2022 despite facing several headwinds.
The San Francisco-based footwear brand reported on Tuesday that net revenue increased 16% to $72.7 million over the same time last year, and increased 54% compared to 2020. According to Allbirds, this growth is primarily attributable to a rise in the number of orders, primarily driven by retail sales, and an increase in average order value.
“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,” Joey Zwillinger, co-founder and co-CEO, said in a statement.
But despite these gains, the company still faced higher logistics costs and unfavorable foreign exchange rates that impacted the bottom line. In Q3, the company saw a net loss of $25.2 million compared to $13.8 million in the third quarter of 2021, and net loss margin was 35.0% compared to 22.0% in the third quarter of 2021.
The footwear company also saw took a profit hit from costs related to its “simplification initiatives,” which the company said is ultimately designed to generate cost of revenue savings, streamline workflows, and lower operating costs. Some of these steps include reducing logistics costs in the United States by transitioning to automated distribution centers and a dedicated returns processor; and taking steps to optimize inventory, including the liquidation of excess end of life inventory, and accelerate logistics cost savings.
At the time of press, Allbirds stock was up 6.43% in after-market trading.
With these results, Allbirds said it is maintaining its guidance targets for full year 2022. The company expects adjusted net revenue of $305 million to $315 million for the full year, representing growth in the range of 10% to 14%.
“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,” Zwillinger added. “Thanks to the team’s hard work I remain confident in our ability to continue to execute into the holiday season and next year.”