Allbirds BIRD, an eco-conscious footwear startup, experienced a decline of over 14% Wednesday morning after the company s latest earnings report.
The quarterly sales of $62.7 million, a 33% increase, exceeded the FactSet consensus of $62.0 million, but investors were disappointed by the wider losses. Allbirds' loss per share was 25 cents, well above the consensus loss of 11 cents per share.
The Silicon Valley startup's high costs widened the loss to $13.8 million for the third quarter, despite a loss of $7 million the previous year.
Allbirds closed at $28.89 a share in early November. The company has been expanding recently. In October, the company opened two new locations in Cambridge, Massachusetts and Oakbrook, Illinois. It now has over 30 locations in North America, Asia, and Europe.
In its prospectus for its IPO, the company wrote that we are in the early phase of a ramp towards hundreds of potential locations in the future, with strong unit economics. Based on our stores pre-COVID 19 performance, we believe our new stores will be highly profitable, have attractive payback periods, serve as good capital investments and be positioned well to take advantage of physical retail recovery from the Pandemic. WELLINGTON, NEW ZEALAND NOVEMBER 06: Prime Minister Jacinda Ardern wears a pair of Allbirds shoes after speaking at the Labour Party Annual Conference on November 06, 2021 in Wellington, New Zealand. Prime Minister Jacinda Ardern announced an increase in the Family Tax credit due to the impact of COVID on families, along with the increased cost of living, so that 346,000 families will be better off by an average of $20 a week. The Labour Party Annual Conference runs from November. The rising costs have been reflected by higher levels of investment, according to Hagen Hopkins Getty Images. Over half of the company's revenue came from selling, general and administrative expenses, compared to 42.5% of revenue for Q 3 of 2020.
Allbirds was founded in 2016 by Tim Brown, a former soccer player, and Joey Zwillinger, a biotech engineer. The startup raised over $7 million in investments from a funding round led by the venture capitalist company Maveron.
The New Zealand-American footwear company became well known in the industry for developing the Wool Runner, a shoe made of fine merino wool and castor bean oil. Allbird has also developed several other shoes in similar styles, all purportedly using environmentally-sourced materials and processes.