Allbirds stock fell late Tuesday after the sustainable sneaker-maker and recent IPO reported mixed third-quarter earnings and a full-year sales outlook that missed expectations.
XThe San Francisco-based company, which designs footwear aimed at more environmentally-conscious customers, reported as the shoe manufacturing industry attempts to find its way around pandemic-related supply-chain disruptions.
Allbirds Earnings
Allbirds lost 25 cents per share during the quarter. That was worse than FactSet estimates for an 11-cent per-share loss.
The company reported revenue of of $62.7 million, up 33% from a year ago and 40% from the period in 2019. That was above FactSet's forecasts for $62 million.
Allbirds attributed the sales gains to brisk U.S. demand and interest in new footwear and clothing. Management said its physical retail stores in the U.S. did well during the quarter, and it cited solid interest in its new Perform Apparel line.
The company said it expected net sales of $270 million to $272 million for its full year. The midpoint was below expectations for $271.6 million, according to FactSet.
Allbirds Stock
Allbirds stock fell 7% to 17.96 after hours on Tuesday. In regular stock market trading, shares rose 2.2%.
Shares have a very weak Composite Rating of 22.
Along with Allbirds stock, Nike (NKE) added 0.2% after hours. Shares were trying to clear a 174.48 buy point of a cup base.
Adidas (ADDYY) edged up 0.4% late Tuesday. Crocs (CROX) rose 0.6%. Skechers (SKX) was unchanged.
On Holding (ONON), the running-shoe maker backed by tennis star Roger Federer, was also unchanged. That company, another recent IPO, reported earnings earlier this month.
Allbirds, founded in 2015, is best known for its Wool Runner shoes. The company has tried to position itself as a more sustainable shoemaker, making products from tree fiber, sugar cane, crab shells and other materials. In doing so, it hopes to capture younger consumers who pay more attention to how and where their products are made.
Still, in the Allbirds stock IPO prospectus, the company noted that its footwear is largely made by a handful of vendors in Korea and Vietnam. Shutdowns in Vietnam earlier this year have hit sales for Nike, as well as quarterly results for Crocs. Factories in Vietnam have since reopened, but are hindered by labor shortages.
Allbirds also said that finding suppliers that meet its environmental standards can be an "involved process."
However, in its quarterly report on Tuesday, Allbirds said that gross margin expanded slightly, to 54.1%, compared to 52.9% a year ago. Allbirds said sales of higher-margin products like apparel and falling product costs were offset by "higher warehouse and logistics costs."
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Analysts Like Allbirds Stock
Even as shares fell after hours, analysts expressed optimism on Allbirds stock ahead of the report.
"Allbirds is a leading footwear company with a unique competitive moat given its focus on sustainability," BofA analysts said in a research note on Monday in initiating coverage on Allbirds.
They gave Allbirds stock a buy rating and a $23 price objective.
"With an aided brand awareness of only 11% in the US, we see opportunity for its innovative, sustainable product development to capture market share in the $1.8 (trillion) global athletic footwear and apparel market," the analysts continued.
William Blair analysts also found a lot to like. An initiation note on Allbirds stock on Monday gave the stock an outperform rating, and noted Allbirds' high rate of repeat customers. Blair analysts described Allbirds as a company that draws most of its sales from digital channels, with potential to gain from the opening of more physical retail stores.
"The opening of stores is expected to drive new customer acquisition while also lifting digital sales and translating to improved lifetime value," they said.
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