Allbirds Gets Lift From New Physical Stores as Headwinds Persist

Direct-to-consumer (D2C) clothing and footwear retailer Allbirds saw a lift in its most recent quarter as the addition of a record number of physical stores helped drive sales.

In its Tuesday (Nov. 8) earnings report, the company said it opened six stores in the United States during the third quarter and 15 since the close of last year, ending with 38 U.S. locations.

Allbirds — which recently marked the one-year anniversary of its initial public offering (IPO) — reported an 18.5% increase in net revenue, driven by increases in both the number of orders and in average order value.

Meanwhile, Allbirds — whose stock is down about 89% since its IPO — reported its losses for the quarter were $25.2 million, versus $13.8 million in the third quarter of last year.

Co-founder and Co-CEO Joey Zwillinger said the company is seeing “increased choppiness in the external environment,” warning of worsening consumer headwinds driven by inflation.

Allbirds pointed to the toll inflation has had on customers during its August earnings call as well, saying that changing demand had led the company to make moves such as tightening inventory levels, putting a greater focus on cash flow, and reducing its corporate headcount by 8%.

The direct-to-consumer brand has formed partnerships with third-party retailers, such as Nordstrom, Zalando, SCHEELS and Selfridge’s in London to reach places its own stores can’t.

Zwillinger’s warning comes as inflation — while slowing — is still at levels not seen in more than 40 years, a condition that’s left half of consumers with a gloomy outlook on their economic future. Nearly a third of those consumers said paying bills has become tougher, PYMNTS reported Wednesday (Nov. 9).

“Consumer Inflation Sentiment: Inflation’s Long Consumer Spending Shadow,” found that Generation X is the most pessimistic age group, with nearly three-fourths saying they are either very or extremely concerned about the state of the economy, and 68% believing the U.S. will likely enter a recession.

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