Allbirds Sustainable Shoe and Apparel Company (BIRD) Update
Allbirds (BIRD) stock is at a low of $1.23 as sales have slowed
Allbirds has had a difficult path since going IPO, Sales have since slowed. The company reported a 13% decline in year-over-year revenue in the first quarter. In March 2023, Allbirds shares plummeted 47% after a disastrous earnings report that included a $101 million annual loss.
However their loyal customer base has kept them in the game and provided more time to find a profitable journey. The company is now slowing the pace of store openings, adding more wholesale partners and working to "reignite product and brand."
Allbirds has opened an office in Portland, Oregon where athletic shoe talent lives, especially from Nike and Adidas. Allbirds hired several Nike and Adidas veterans to run the office, including Ashley Comeaux, who spent more than 10 years at Nike before becoming Allbirds' vice president of product design.
Final Thoughts
Currently, the strongest asset going forward is the $143 million in Cash on the balance sheet. Hopefully, Allbirds can find a profitable growth path by end of year 2023. Allbirds extended and upsized revolver with JP Morgan: maturity through 2026 and access to up to $50M of committed liquidity and the option to request an upsize to $100M.
The management team is confident that there is no need for additional capital in the foreseeable future. A winning holiday season will be key to build momentum for the stock price growth in 2024.
We will continue to watch and update Allbirds stock especially with the hot July record setting temperatures, we need more companies focused on sustainable , green and carbon neutral products, supply chains and transportation.
Allbirds Plans for 3rd and 4th Quarters 2023
Where Allbirds is today:
● Leading NPS (Net Porter Score) with a core consumer
● Steady progress with high quality third-party partners: Dick’s Sporting Goods, Nordstrom, REI and Scheels
● Significantly increased bench of company leaders and board members with deep footwear experience
● Realigned incentives for greater focus on cash flow and profitability
Allbirds Strategic Transformation
● Reconnect with core consumers
● Obtain new consumers in a capital efficient way
● Significantly reduce operating complexity and costs
● Focus on profitable growth
Allbirds Strategy for 2023
1. Reignite product and brand
Recalibrated product line with greater focus on core franchise management expected in early 2024
Social-first marketing strategy rooted in consumer insights work
2. Optimize U.S. stores and slow pace of openings
Focus on driving traffic and conversion
Various pilots underway, led by new head of stores
3. Evaluate a transition of our international go-to-market strategy
Increase distribution partners
Demand and brand health remain solid in international business
4. Improve cost and capital efficiency
Significant improvements in costs for products from new factory partner in Vietnam; expect to see accelerated savings throughout 2023
Recent workforce reduction will deliver approximately $7M in annualized SG&A savings, with full year impact to be reflected beginning in 2024
History of Allbirds
Green Shoe Company Allbirds made its IPO Official
The San Francisco-based company said it filed for an initial public offering with plans to list under the ticker symbol BIRD on the Nasdaq Exchange. Allbirds hopes to cash in on surging demand for brands that reduce their carbon footprint.
The company raised $100 million from Franklin Templeton and T. Rowe Price, reportedly valuing the business at $1.7 billion. Allbirds was founded by Co-CEOs, Joseph Zwillinger and Timothy Brown in 2015 and began selling its first pair of shoes 12 months later.
Allbirds shoes are made from merino wool and recycled synthetics to bolster natural material content. A focus of Allbirds is innovating new technologies to increase the performance and longevity of sustainable and natural materials. Designed to minimize odors, you can even throw them in the washer!
Allbirds added a line of activewear made from eucalyptus tree fiber and wool. The company, which calls itself environmentally friendly focused, avoids polyester, stating it makes up to 55 percent of all clothing and contributes to multiple tons of carbon emissions.
Morgan Stanley, JPMorgan, and BofA Securities are lead underwriters, part of 17 banks working on the deal.
Allbirds use natural, sustainable materials that are super light, comfortable and breath
Growth Opportunity
There has been enormous consumer demand for activewear along with a shift toward to comfort/Casual dressing during the pandemic and increasingly those consumers are looking for sustainable companies. At the same time Investors are also looking to find sustainable companies to support, which may have in part motivated the Allbirds executive team to consider going public sooner than it had anticipated.
Allbirds expands into casual activewear apparel
Co-founder, Tim Brown, said as recently as February that the company had “no plans for an IPO,” according to a WWD report. “The possibility of being a public company is a huge challenge, and at five years old, it’s still very early in our life cycle.”
REVENUES
Digital sales totaled $194.6 million in 2020, representing 89% of total sales. More people shopped online last year due to the Covid-19 pandemic, and Allbirds has benefited from the shift towards more comfort and casual dressing.
Its revenue has grown to $219.3 million in 2020 from $193.7 million in 2019. For the six-month period ended June 30, revenue was $117.5 million.
The company had 27 stores as of June 30, and it plans to expand its number of brick and mortar locations stating it is in the “early phase towards hundreds of potential locations.”
Allbirds-environmentally friendly company files for IPO - its Retail locations are busy
Allbirds wasn’t profitable last year or the year before with a net loss of $14.5 million in 2019 and $25.9 million in 2020, according to documents filed with the Securities and Exchange Commission.
For the six-month period ended June 30, Allbirds reported a loss of $21.1 million.
Allbirds said it expects it will continue to be unprofitable for the foreseeable future.
Interestingly, Repeat Customers accounted for 53% of its sales last year, up from 46% in 2019, the company said. Its fans also spend more money over time. Allbirds has a loyal following with repeat customer’s average spending growing by more than 25% in the second year they shop the brand, according to the company sources.
Allbirds has acknowledged how competitive the footwear and apparel market is today. It’s aiming to take market share from businesses such as Nike and Adidas, which have been around for decades and have huge brand awareness among consumers.
Money.Wrapped will keep following Allbirds to report on the first day of trading and the analysts that cover the stock.
Selected Best Shoes for Indoor Rowing Machines
Recommended BY MAYBE.YES.NO as their number 1 favorite shoe for rowing: Allbirds, Tree Skippers, Wool Runners, and Tree Runners.
Besides being cozy and fitting your every move, these Allbirds tend to have all the right characteristics required in a rowing shoe — they are on the lighter, thinner side, have a flexible sole, and a flat-bottom — basically a Minimalist activewear Shoe. Allbirds are made from breathable material on the upper part that allows for ventilation so your feet don’t overheat.
#1 ROWING SHOES
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