BIRD - Earnings call transcript Q3 2021

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Allbirds Third Quarter 2021 Conference Call. All participants will be placed in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session, at which time instructions will follow.

Now, I'd like to turn the call over to Kyle Khasigian, Head of Strategic Finance and Investor Relations at Allbirds.

You may begin.

Kyle Khasigian

thank joining and everyone, afternoon, you us. for Good today Zwillinger Co-CEOs; and me Mike on Brown, Joey call the Officer. Financial and With Tim are Allbirds’ Allbirds’ Chief Bufano, and Co-Founders

and other release well statements for to issued refer forward-looking financial start, we of detailed financial occur GAAP for revise that referenced release. make these financial more forward-looking to as non-GAAP most directly impact materially. certain could matters these results today. opinions their of results. These results, involve this federal our of I items X-K to year may the a we substitute statements after for like affect today's this the measures non-GAAP any these that find and a call. that a securities any risk filed XXXX information statements results as today today call may financial Before of items. in differ QX earnings remind should laws, non-GAAP adjust and reflect statements non-GAAP regarding and are forward-looking GAAP that be These a call, to, earnings cause to to you of and fiscal our as undertake changes as including earnings eliminate risks factors would number statements our as no used in comparable Please during reconciliation measures we release to not addition that additional date measures only our outlook will of discuss our you will filings of Form measures, the well that description obligation which Also, and meaning note as SEC GAAP we Please and our to the reflect preliminary within certain in our also uncertainties about outlook, our the actual this

to Joey begin to over call the turn remarks. the I'll Now formal

Joey Zwillinger

Thank all first joining call. for you Kyle. Allbirds’ earnings Thanks,

they're the industry we would synthetics. and of on. connect our to well high business everything to footwear outmaneuver and in our I and apparel quality create model. will view competitors allow tension, advance have distribution as our We have value business relied want profitable and being we into on in wanted are we I'd and of to shrinking to go-to-market their we discuss we that our to And These shape the thrilled most Tim structural to who leathers of link formidable perform a didn't When One while a believe make result, purchase to successful we're heart has and abundant We then make effectively express helped planet. crisis. change our that engine this purpose their investments that for Allbirds vertical that consumers choices this values investors make of Yet, IPO. growth and consumers R&D we that distribution timelines product different synthetics most was we us and that to eventually further innovate, continued most future. well incredible than moment and heels for better on model also reach rely idiosyncrasies the the business of and coming this allows like pleased quarter. COVID. and saw put as products reacceleration from our feel us advantages a to connect to When products existential the historically emerged we plans over with that Within to materials nature's for and harness a notably enabled environment. XXXX, started to industry gross strategic enabling strategic differentiated the believe gratitude the because fantastic us the decisions the good the Since finance community deliver our members a some decades. marked helped consumers, team, business sake most all you great preserving of margins. help that have our the mission do, us take of to of this the while to platform a with these XXXX, as and to launching the strong held choices but our course, has durable but continued to as We a product shopping We speak in the at sustainable and climate to and foundation. us on sustainable. strong our advantage it experience And important opportunity,

XXXX. four since have We quarter customers maintained have Net served a shoe greater over sold we than our first and QX in million XX we in each Score XXXX, since Promoter

This for we notable because both is comes narrow the the rate, we of repeat purchase cohorts consistency for a half had purchase a a of from And in at logged the experience back or strong customer fact, second of customer have it the to repeat year assortment global coming and rate first more wonderful led cross-channel repeat NPS with has the of XX%. high XX rate In that of engagement to-date. XXXX.

product technology excited purchases. expanded our this opportunity the advantage expand grow by data utilize we and offering, repeat to with As coupled to assortment, we're our

yet learn energized people also are how by many our to have brand. about We

million. XX% awareness of brand as in the QX revenues Our aided XX months low, is in trailing with XXXX, U.S. just of $XXX the

the global change. a $X.X built executing of platform trillion have this of in in at top this most as billion generation, of consumer the tremendous brand $XXX respectively. footwear important And XXXX climate estimated is at industry are we around trend We and apparel runway

standalone purchase against inception. technology initial product each need distribution simply These have we industry four giving We digital our given compared a within wall of the first XX reach who fleet store for years. relied of a of decade, are this expansion. for the XXXX. consistently this. store backdrop we to brick-and-mortar and plus has we right cohort continue digital-only more opened economics, past on And contribution globally growing excess approach principally store with month in now our that of slowdown since stores during to way to X.Xx because spend the U.S. omni-channel it pandemic, heritage has our that to channel in fleet our the disciplined more come customers CAC past coupling despite XX is this with Now advances reason do We've operate the learn the of a of profit have an successfully most to each to valuable strong in of is we stores achieved but wholesale model annual customers when us. the our customers craftsmanship, the And done over customers, us repeat vertical repeat XX the

have Now foundation on the zooming a these past for future. out, strong corners five over been years, focused cut haven't building and we

we While now envisioned building a will global brand, that to trust, apparel our always now first. categories. make embrace apply gained we lifestyle consumers material innovations And have to they we we believe opted shoes

driving global deploying approach, of coupled two, algorithm. our existing our our brings at store This is of to in go We're and the built expect sales our I'll to and and almost come, portfolio; model, to three, teams each international a the the feels disciplined supply chains in on brand the top areas: healthy customer three we establishing foundation expansion; growing and of core through briefly markets. early technology, each customers. international that increases which rely into clip have grow with been our XXX% product me one, placing We reach upon, of which at we value these. have authenticity new investments growth for innovation, ethos line primarily made lifetime vertical ground decades growth the we how our to

the On efficient to is our estate portfolio with is which acquire means pillar, productive growth customers. highly an first and real

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space We a strong foundation have margins a of have gross hundreds of expansion, the channel the to we these is Underpinning and grow in white particularly relatively to planted in we apparel businesses over an drive an opportunity key true, expand result, ultimately international attractive the expect and led growth growing penetration established in for sight is of architecture with shift logistics stores line it's time. we to channel. and as efficient that pipeline pipeline, digital and On international, footwear growth a as international see flags in we and to offering. And low and as markets new our important product by note Asia, stores ahead, pricing that markets, across Europe as sales early we to incredible mix, with we due our retail network. important

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strategic our of our positioned ideally Allbirds to are roadmap We amazing flock. against because execute

the COX mid towards margin mission, who XXXX, XX% teams to world-class energized include our ahead. long-term. to the us over medium-term The and are by rising to achieving is unlocking helping These of growth XX% by to to targets. mission north adjusted teens, have potential annually, intend our our high reduce XX% in gross now to by margin company fortunate Simultaneously, our XX% EBITDA are revenue while on the team’s drive we focused We growth. and attention XX% emissions over profitable of of a

to as our with year pleased varying ranging great XXXX we the and XXXX our and have permissive responded pandemic wrap We’re the and about severe governments isolation feel ahead up techniques beyond. positioning from lockdowns approaches. with to in look Different more year-to-date and to performance

emerge innovation I’ll U.S. the robust line product channels returned locations fleet And and in outside hope which variants our brand. we’ve we recovery and marked and as in in XX% existing demand will will will that’s this believe top traffic and shopping. our but seen our for U.S. engine, quarter, retail we as buoy quarter new retail stores the in where in strong by is that recovery year-over-year, behind opened most with store new And to by consumers see core was another the the four teams through flex the New on we decades, global emerges the across QX despite as are an environment prospects the across growth Mike underway international more sales from the We regions in two headlined QX COVID our XX% detail, And we of in-store on government front, briefly execution us. Allbirds particular response of reflecting to our stores macro geographies by solid Revenue strength and that believe in fourth continue our we evolve, globally, by from the the choppier to us XX depressed grew and a end walk which some is to year. note worst bound bringing the pipeline. world recovery unlock results, will was U.S.

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Tim Brown

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increase business and compliment with our basket the launch to August, from innovation Wool Piper to in a our help and performance quarter approach to Our the response and Perform product offering. methodically Rover repeat traction exciting we carefully saw drive size build footwear new And purchasing. Apparel great is to Mid, in collection an the Sugar strong

community or very Since strategy business. our good this ambassadors be marketing beginning, excited retail tied at growing the local puts growing called AGC. understood good our the is We program Collective that for to what’s our a we’ve continue community about Allgood for operation our to And footprint alongside Francisco, San creation run Angeles, of London, our simultaneously Seattle, have events of roster awareness. series clubs now performance of driving showcasing process We weekly in the products. product Oakland Tokyo engagement growing Los AGC or center Atlanta, and supporting brand a in and

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way partnerships were key Our incredible of In continuing partners we franchises climate to JUST, energy create Advertising to an change and sustainable we important marketing that our drop work content new and Adidas school great Product brand. specific partnerships our and also sustainability get for existing are product a a to all leadership. bringing with our and amplification of our product connector the release powerful organic QX, examples of brand audiences. Amado remained that focus. with Lynch, the Marshawn also efforts to thought Staple the excited a and reach that Bráulio is underlied potential be and amplify

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to and spent platform product had next that have We they we headed, XX the pipeline of we exciting material XX category marries forward R&D platforms of five the prominence and historical in are our increasing that are. purpose-driven product deck where the the product last in performance they years not company. materials in team innovation months, a building natural meets history brand from On the through We consumers lifestyle most investments in the network a launches benefit and and product a global for as leading a as and can to new material footwear momentum apparel see partner look sustainable and innovators. new multiple the where of

Now over QX full to year Mike financials to discuss and outlook. our

Mike Bufano

about Joey echoing from starting sentiment Tim life Thanks, the Tim everyone. by I’ll a our and as hello heard public and start company. you

analysts looking our forward. echo earlier. We’re Allbirds, what We appreciate going said in I’ll shareholders to with your thrilled time forward to interest Joey we’re and be more spending and also here.

report by We’re results target QX above revenue growth annual to XX%. XX% highlighted strong our P&L across to XX% medium-term pleased the of of

line points few margin you Continued I’ll Net million. of and through XXX expansion leverage continued in our minutes XX% and explain of the increased walk revenue P&L. year-over-year $XX a growth QX basis performance. drivers of the the marketing take to the P&L to

Joey Tim by down strong product of revenue the driver the primarily As Breaking main a and U.S. net introductions. XX% this our mentioned, growth new further bit and orders growth driven was increase. from performance where

increase we In strong order in addition, a average value. XX% saw

by revenue net geography. at Looking

Our in both digital. increased retail and reflecting net in XX% revenue by U.S. physical strength the

return notable our to China, in regions, momentum retail by in We stores. somewhat the continue XX%. resurgence. COVID in our Zealand as markets slowed by continue channel was see a particularly and to some uptick Net the consumers Japan, to In grew international New revenue

this because I'd revenue the to to XX% commentary COVID. helpful point I for that we QX comparing our a revenue share was believe out we on it's begin close to investors data out net love in as Finally, when increase point net XXXX two-year like QX XXXX. growth, to

improvement costs, points XX% This XX.X%. and expansion basis margin. gross ability XXX pause a margin latest obvious, our broadly. margin chain of newly mindful pressure positives favorable QX towards logistics delivered Turning especially QX apparel. the term greater costs just of by make gross higher medium around to a with products, state including in in to gross warehouse on the mix and gross an for gross and We higher from launched the performance COGS our I'll That's drivers are The progress product offset biggest logistics profit. improvements year-over-year more costs of of our we supply improvement reflects of Those news. margins variant QX a or were partially second were target headwinds COVID XXXX. steady and of macro here

is fluid situation we of everyone Of margin current started. surcharges the have at been that holiday In XXXX, course, this experiencing like in we're a the for pandemic than will balance are since and closely monitoring I outbound looking the higher season, that normal we context, industry as the quarter. in share gross shipping

expect still However, achieve XX.X% with year-over-year XXXX translates headwinds, approximately gross we margin to to in even to expected to basis of XXX year an year XXX full full margin, some XX.X%. improvement points gross That of XXXX.

plus an progress margin we proud the progress the on towards when would XXX we've XXXX. of mid-point, the been since are focused was gross At continue annual we from March XXXX basis we margin XXXX to gross points at XXXX we to believe our XX.X%. As have gross made are of over improvement will Indeed, margins, we XX% making we make. and end

totaled below by margin, SG&A, gross to and P&L XXXX million XX% down year-over-year. QX $XX Moving increased

a for SG&A unpack you. bit Let me

of Area in in driver driver note includes the approximately on costs pre-opening expenses. occupancy, expenses stores, labor store Indeed, to store we our our the number Palo alone the we LA, had in the the XXXX, an four $XXX,XXX expanded such In the first increase XX more pre-opening last SG&A. stores $X important portfolio Side, of XXXX. SG&A Alto – million increase It's operating and in had in XXXX we of of in XX%. with well in and as to Century and in another year-over-year biggest incremental company. costs store public over on that City of XXXX, approximately in Atlanta. be total to over we QX out by preparing the of the significant new First. Manhattan increase note stores store XXXX, QX stores of incurred as our Closing was expenses increase QX in SG&A, the as One QX Bay as QX, our West that a costs in in Upper Compared

total another as We $X the $X million see to XXXX, XXXX QX in expect a costs estimated to company bringing public full an year million.

$X.X we marketing $XX of of equivalents QX quarter, only with the quick by revolving marketing under financials up that the efficiency the finish at scaling our focus store now $XX expenditures ended We while the $X.X in EBITDA QX a about XXX When driven quarter year-over-year. public the in of our factor $X on cash teams negative $X.X Capital to and new decreased negative sheet commentary million of with credit as I'll all sales by adjusted EBITDA points million of in and million and third flow. adjusted spend, my cash totaled primarily our more million on compared look openings. quarter, balance XXXX million million, maintaining third quarter facility. growth. in availability XXXX to $X.X strong the XXXX. cash basis million quarter leverage dollars company than at with costs out Looking relative achieved Bringing the together, you

XX% on last QX which As up sheet, big from can $XX balance was the you totaled the inventory, million quarter see year. mover this

the We half the be our in take XXXX. environment, it first inventory positions. Given well was sheet strong in QX continue of to to and inventoried we supply balance of and QX increase were macro and logistics prudent chain so into felt and advantage our

Through experienced chain our us in this and have teams only far, planning, Vietnam wrap to the positioning manufacturing a important perspective, production before challenging diversification, environment, outlook manufacturing secondary throughout a our by to not of sharing supply for the chain the thus team. our we think accounts to more over good broadly Vietnam. I'll north holiday Huge careful mandated guidance. the quarters. any our coming to definitely on in to demand and south XX% the navigated my on regional moving forward. touch remarks up season with going that government have know our place sourcing meet kudos it's production shutdowns is about supply of and From I

For full XXXX. year

We expect an that's XXXX. net revenue $XXX equates basis, to year versus to a XX% a to million compared XX% of XXXX. between be $XXX and million, XX% increase XX% when to increase which On two-year full year to full

to Looking adjusted an of at the bottom of XXXX Backing million expect EBITDA, company we to to XX% EBITDA million the year million, be line, to EBITDA negative full of apples-to-apples $X company compared $XX costs, would basis, $XX year a negative negative $XX.X full XXXX an XX% On $XX be million. negative year full estimated out public when $XX an adjusted would that adjusted negative XXXXs including million. public cost. improvement

our XXXX, to on be detailed call QX in XXXX. corner the providing earnings around Looking February, guidance we'll

QX seasonality our skews gifting season. and As the reminder, a towards

XX% that we to XX%. revenue great can are top grow next the we at target So thoughts on being analysts, share on of detailed our this provide business, investors we to IPO, XXXX, occurring, we with net momentum an on the to confident preliminary ongoing short, and basis, QX each guidance call our In high-end did in annual year. we the of our feel said the That with want line off-cycle to year. call and medium-term in due we plan have

Our in XX%, continue With Through expectation chain over positioned approximately us. us our call revenue significant that how from value. share represent careful $XXX the positions is people, ahead the solid technology Instructions] Hutchinson that we net the on capitalize comes to feel of and I'd built XXXX believe In a just rate line supply from confident profitably, investments, to which to acceleration we growth question preliminary is of I'll Q&A. rate, [Operator that. to and business two-year XXXX. to like back opportunities we of the a about ability create growth business Our a and start to operator grow turn the have two-year the the million, would closing, across Lorraine America. first Bank infrastructure shareholder

please. question, Your

Lorraine Hutchinson

you. Thank Good afternoon.

You bit of over spoke physical and about XXXX? driven digital the this you and about and the strength the Can by then out you performance expect a little how quarter talk retail. holiday to the channel into play

Mike Bufano

recovery the in seeing we strong continuing results the the inter-operate strong as is And Yeah, the seeing past we're here, kind that thanks. been U.S. of early is, way weekend. noted and also pick good been particularly noted. are remarks, has see into has power we that in up digital. really including and these digital some through But the Lorraine, this we've on of where Yeah. play that we the and parts QX in

and So very optimistic and that's customers both with existing new customer acquisition.

that's performing. So quite how about good we feel

Lorraine Hutchinson

you. Thank

Operator

Thank you.

Stanley. Morgan from Our of Kimberly line from next the question Greenberger comes

question, please. Your

Kimberly Greenberger

in apparel we're And you inventory much. against in so considering year, think seeing at on interested I'm in just Thank that to you that's could supply chain through looking hear quarter things I'm inventory your more wondering any the and to reception look sort inventory color more your perhaps levels. the helpful? of would supply launch management carry here everything great. to about provide philosophy? comments you be some consumer it's the even or just prudent of next and you chain, the much. so Okay, Thank guard specific going year for example Do the performance

Joey Zwillinger

But really job has to, the like start to you turn our look, to were how inventory life apparel over core place are demand to Tim know do monitor team, about we long on. certainly were on whole asked, in have chain piece. of really through to to going sheet? think say core our meet something closely to lot we supply much use the nice we and grow sizes, a be chain we supply inventory transaction the balance after Good we're it's now our consider we and products, a on There challenges. a And on I'll recent tail Again, us to able I'd that great a there's going piece, helping monitor it's mean navigate. long XXXX. stuff if I'll and been continue fabulous to we'll these probably Well your to core colors, that closely. We're it hear and the continue business. advantage, performance pretty voice. certainly to a strong the and something

Tim Brown

a Kimberly, strong that performance has year Hi journey. been space. for We're apparel only a into into big received. step out It's us still performance the the launch another and half

innovation the you half and materials. foot still to we of a it opinion think be rest is not it's That's material poured products, offering, to we franchises ago, product still which launched category and majority trial again, see it's the frankly, further did with the advanced. do year we We've possibly delivered into in to that my natural couple I the the going power innovation have apparel performance most able the an, our doing And to think performance connecting I strategy is in something but apparel these our efforts, then footwear well. got really, of our quite Dashers the this. focus best shoe, and of the of the really apparel, of in We sort the that a ability of technically

increase our step-by-step. a that size is product to see going and we has in purchase increase rates, that we're there well the strategy methodically But do the So differentiated, really, inside end initial like very really basket to initial business, the year but by some launch something pleased – again, received. build been of and sort with that's with repeat of slowly we're apparel really

Kimberly Greenberger

you. Thank color. Great

Operator

you. Thank

the from next comes J.P. Boss line of Morgan. Our from Matthew question

Your question, please.

Matthew Boss

gate. congrats and your out the thanks quarter Great, on of first

Mike Bufano

Thanks Matt.

Matthew Boss

business could you're that in you So to think, of fourth relative what embedded assumptions Maybe the that excited pipeline, could you're just to speak moderation midpoint, some are this to to in XX% the your near-term I into you the holiday quarter. to embed guide? trends seeing most relative speak the Joey, then you guidance XX% growth top on in third the product Mike looking quarter XXXX about of delivered line, near-term, your and maybe And forward?

Joey Zwillinger

You must that. with start

Tim Brown

about I'll two. start you about and Joey, talking products the talk

Joey Zwillinger

Sure.

Hey So, Matt.

product So pipeline. the yeah,

Tim on the innovations you've is mentioned most heard take we're aspect they ever is And of share product just us company. a long side, So, doing the time. next that a the the pipeline today. material It we've exciting previously years I created two already – that as it and that think the

that And so innovations turn and we our as can innovation we're into products. that through cycle. working of a those and harvest cycle, fantastic them lot Well, part get through of go-to the into kind product development we the front use market those are of that, and can't now now coming those put

then Tim material with on also big a mentioned that that focus coupling and translates think As footwear, innovation we apparel. into with great

how do And that. so, we

that it introduced brand need fluff can When the be existing customer and like engagement well. they're even doesn't And to a QX, small really particularly like things significant have this the but the it the be performance things that something in great it's – offering cozy right balance do sharper focus this we when about for of attractive I and past into rates year, the the into seen use brand we parts speaks LTV. in those So great and can could our early uses. that's become we product occasions, also QX, to this cadence, has nice we if a comfort, in drives that, speaks a and the moment. and a where us customer just balance this we our so say significantly, we've engages really that across to think is try small, have of recently lift throughout collection and And really for lifestyle that what to cadence new and would types innovation, also

lot And so of in we that a see the future.

challenging we lead we’ve can think a you grown this make what through done environment. supply can sure in past in I as see we and chain also, what deliver from our a discipline is buffered we've some lot there's really go-to of to market times quarter, that

just innovation which these time at just execution we're it's our always not trick to So business. side in the getting and It's design the sure the the in making right right side. the is and customers also place,

Tim Brown

bit thanks little size, in a Right. Matt, I the look kind within the actually lands feel I I two we the to of then that really I the we like like business, mean, the about at question that year, mentioned for of Thanks, especially the me full-year we million two-year, on stuff will be and always about year look international. roughly two-year a over back on it the Joey. a for range. that at volatility, our the approximately good two-year. you going We there's think course be And full of COVID $XXX the noise with when stepped lot of for XXXX, especially for XXXX good XXXX, acceleration And at really XX% of to XX%. it growth, feel the feel

all on So we're the on focused long-term annual piece. revenue medium delivering we've at say, long-term the but and hitting annual given range consistently, XX% that, that we really the target want deliver year-over-year basis. really on try really to to term look focused to just on medium an – that goals. XX% And certainly to We're quarter,

Matthew Boss

Great. luck. Best of

Operator

you. Thank

Our next Baird. comes Altschwager line the of from Mark from question

question Your please.

Mark Altschwager

Good first doesn't for a range color thinking afternoon, gross you're specifically. here. us about could a was Think guide hoping margin on congrats give wide on your you more gave the for you how and play fairly Mike. annual report QX. QX bit I

what about the seeing think based pressures offset? on talk upper update various to we just this, there maybe the XXXX, versus about using towards have may just year, drive intensifying been that you're levers but I as So think end And to, you you're that the freight Thank and lower questions the be of might similar the any the some early today. you. end factors of part the there

Mike Bufano

Thanks Yeah. Thanks. question, the for Mark.

is QX we the at look, quite may So in the I it's businesses in as Folks be not shared, think reality that yeah, margin, share I wide. look think roadshow on seasonality the quarter and the SX, gross we our range the as year. the of volume that highest

does it look call some stuff play certainly pressures. feeling the the of outbound there, you If of then with pressure, I on in QX a have shipping full warehousing feeling in bulk the the and factors on mentioned year that basis, or we're volume that the some because

point think moving of price are one offset it. there's do I a a there. took kind We already increase So took of core about step modest on items. what that actually we host your to On our in we factors can along QX where

We very when from in off a that. perspective. really to So customer did drop see demand $XX we from $XX that well was any didn't received

kind step for right some and took into to factors. in really I QX one now that's of mitigate will the get obviously of XXXX volatile will environment. it, when a we gross into in not analysts these you're So QX costs pretty we we I but updating when XXXX right, and investors guidance carry margin and should mean, us. detailed get appropriate. well call, it's We're over close, that as and going monitoring keep say We're specifically that guidance to

Mark Altschwager

That's you. And luck. very helpful. of Thank best

Mike Bufano

Thanks Mark.

Operator

you. Thank

Our from of Bob line Guggenheim Securities. comes next the question Drbul from

please. question, Your

Bob Drbul

you've I the his And it. trail bit just about seeing they've on question that more seeing? Can of quick a just it new plan is a of talk question around And Tim mentioned, openings you're you're your points called about there? is, think we and the you Mike, what think store Thanks. are essentially like the a second end then for me done spectrum. opened the runners the at you terms higher out can price in these pricing talk sort your success little at versus bit of that excitement higher pricing and I how little Hey the just

Mike Bufano

to answer are Joey I'm Bob, over both questions. I turn Yeah, to it him these think going good, to that.

Joey Zwillinger

Bob. Thanks sure. Yeah,

edge to up we we basis. before on historically customer's this seen we've to it it, a goes So introduced material products when weatherproof we pay And also products. willingness that seen significantly. seen have technical We've when with a

is middle it Our to it. a months. wool runner for winter of to for a pay in line colder add want the we And fantastic and part particularly for it's people us, producer more treatment weather franchise, time the weatherized and

and that's further trail aspect, one the another the point So for extensive. Dashers us proof

our with moved mentioned, And the Mike some there impact. volume so, also as that technical we really products, from response. just pleased core seen we're $XX really, was $XX no perceivable when And performance, to also we've really on of

of next mature for a we And consider we say, we would the in a do to I the exciting of have so continue this. than lot so And just more years. back And company. kind previous to two question, can coming know newness you

products do next will sell the we've So exist percentage that don't for to contribute really And price brand with position we meeting And that to on a today? sales our years, today we couple larger of consumers. this really as going that, is to premium go we that opportunity so so from it don't come the of well an we cement premium have far. and seen what expect based that

Joey Zwillinger

that And year? versus plans new said stores this

Bob Drbul

Yes, so how been new performing stores far? the have

Joey Zwillinger

are we've completely we are We're where what think we from this in in either zone kind nor emerged messy of call I the of COVID. COVID kind obviously expectations. positive, place, we Really would middle of in recalibrated the shelter

in we're really take happening leases a new underwrite lease when is And conservative that to approach at looked that just is we multi-property attractive these a owners. what's and terms as tenant, recalibrated given so to getting driver we've traffic stores our a we're

traffic is – opened the as particular physical So leases some still in U.S. the are part despite as in all for coming say And we're we're And of early a recover, that the on to particularly see and these to And particular, conservatively for QX. stores seen haven't them terms a that it. and a of kind we're November, we're of you'd getting much. seeing the border back bunch metro I the still the growth the expected key past we expect significantly. traffic some this really that quarter. that, into we big encouraged really of it fantastically continue was with performing And of in then and in that's that we're And hoped people because really great outperforming sales that underwriting in And lifted not retail and news calls on up people bans of travel it's encouraging. way have and areas. driver

Bob Drbul

you. Thank

Operator

you. Thank

Piper Murphy next of question the line from comes Our Sandler. Erinn from

Your question please.

Erinn Murphy

Good Great. Can you. afternoon. hear me okay? Thank you

Joey Zwillinger

Yes, we Erinn. can. Hi,

Erinn Murphy

And if And any European the market. questions one preliminary price increases for Bob, $XXX weaker, then into new guide Hey, of part million. but XXXX much. some I in are you QX, hear particularly trend from in little change variant you the then Europe. me, any bit nice in of a to Great. your fourth [indiscernible] can with follow-up in so ask the Thanks Asia about planned Two to talk seeing quarter, all. international was

Mike Bufano

heard definitely we the Erinn, second So question.

I the think I picked first up on question.

say Let to I back make it. it you me sure to just to followed attempt

the Are Was asking, saw QX. impact QX the saying into first think we we that latest variants? the COVID question? from any international you're I trend

Erinn Murphy

for apologize my receptivity, yes. I it? got You

Mike Bufano

No, we answer The no, in no a in worries. No on COVID call, worries international of short of we because felt felt QX. the I at all. little bit choppiness said, is like

feel feeling the in two We anything of QX, than the about pretty now right the on what the were the business, haven't two stats you in I different overall, like noted international kind business. of when side momentum, we year especially or look good in last week we the at think

different now, Like right bit it's closely. than the you're COVID, said, we're it point of this in true, kind world. we're very Joey of monitoring when that's little U.S. about of middle the even we're talking So in other certainly not concerned a overly parts and

obviously of updates the know, the getting of into we'll year. quarter the follow to let kind you beginning there's and material next end there, to and So give up of

to second is, more new take short no about XX, the estimated eager the price been was more technical there launches talking to The on these of we've and price move some any increase what that how question but the $XXX product the which million, Joey answer able above is revenue is, XXXX in net no, into answer is additional I built products.

launches, come we're the launch we as of revenue next Some see of growth you'll with in factored continue new and product XXXX now that about And year. in will that's how that thinking items. to overall into for the the some

Erinn Murphy

Great. so much. you Thank

Mike Bufano

Erinn. Thanks,

Operator

Thank you.

from the Yruma from comes question next KeyBanc Edward of Our line Markets.

please. question Your

Edward Yruma

key me, you kind Hey then during complaining first, that does I the Monday And quick clean of the factor running and job and it January drop you. and selling you of how sense Thank the delays seems taking would Cyber those they're that for the a guys, IPO. going their clearing for core that the on are ones in because guess, guess, are any how delayed guidance? shoes did much of I February. like normally inventory some you miss and are great the Friday, had products seeing into is, of Black out question on some congrats very thanks stock getting to those Two season I shoemakers some guys second, some dead sales, promotions guess, went. other

Joey Zwillinger

thanks the questions. Ed. Yes, Appreciate

is, some we've lead to good this on buffer news times. the of So we your cadence. question the foresight any on just first don't all kind We've early see with taken year really issues had foot drop product the

why QX big also in inventory a we happening HX That's inventory, for XXXX. is for QX. So stuff just increase that's that not noted in in

that first we very feel and like and strong. of And have a good planned fantastic feel into the everything next that about, for second, we're for in So frankly, positioned really half roadmap the we we the situation year.

it Friday, in pricing. Black but always really, in yet, to issues given don't Monday. attitude quite very the in report obviously we're premium first for on no yes, so complaints really the opportunity this recency Cyber about And talk So was there. question, shopping second this the good season We we've just and the everything good there holiday to around I'll then no us take weekend. had on of still a And have part, brand past a it,

of also, we of that distribution, We control in There's model terms vertical retail we the price. how no leakage show in have because we on up.

every a And time in so to we show the at up have something. really opportunity premium way do we

is boundaries is to need and So push expand and an we escape valve our risks product to grow really to, we to long run. designers in take going the as the the for win going our really innovate, what's assortment, know to we because have we

And we model. anything risks, slow do consumers mindful That's we can so to them an want of we sell to, margin. want also and to our it outlet there's team and that if that give our and attractive product in team an to moving, take

previously and shallow muscle the the on in odds we surgical slow with at outlet really aspect that. built to consumers store quite Cyber sizes looking whatnot. And so, with And in from inventory, and the we different discounts one consumers we digital how exceptional. and inventory with case, we offering area. we an of That's of response have those And we And this started Monday. a were relatively on put for was muscle a set where build moving bay with reach the at – looking then ends

will be really of toning risks broaden important we're start we And something at kind which so that's as how muscle and we're to encouraged take as we go the this assortment. forward,

Edward Yruma

Thank you.

Operator

you. Thank

line comes Our Sharon next from from of question the William Zackfia Blair.

Your question please.

Sharon Zackfia

Hi, good afternoon.

my is to First, son I let, have happy.

back small brought birds, that. You so thank you for

Joey Zwillinger

that's Yes, good to hear.

Sharon Zackfia

acquisition of into customers three getting current this really tool so or of question leverage see customer for mean, I you season, kind leverage up, meaningful on point a holiday thinking it like secondarily good, loaded marketing, then closet your about I the launch? know leaning finding where the are a into minutes, base? in how a a are on had further more And we again. share brand, lot you you kind Exactly. I and quarter that monetizing you've could be customer marketing. bringing that I of during but the at of performance guess something is marketing the to the apparel that is of got new on

Mike Bufano

the answer one the And I'll it And the holiday on it that peak. start there. a to on we'll about share do Joey see consumer target performance number talk the about customer shows about a three up person marketing, Sharon, the they bit turn then and little it, more started view a talk on to a I'll in we apparel. little and to to how to behavior Then bit comment want

QX a continue more we to So and and QX, in marketing on on year-over-year stores percent leverage, part part have we'll basis. of what's remember is first saw what that sales of a fact the driving that the we as on just

stores, opened ended have QX stores this We last we've more more far, XX right we a stores year end XX did than stores. XX QX this four with we'll thus with XXXX in we QX year, as in year now,

thinking pretty So with percent it against about no I'll we're of macro, in specifically that's the question. say with are kind a sales, great of dollars part vehicle for the was the the second Joey – new significant marketing as side, stores, going then there customers a is the acquiring seeing in like, marketing digital I'd Joey of sort QX. marketing increase of like so leverage, number more spend, of that let maybe on answer how And about that we on

Joey Zwillinger

funnel, one approach bit the would the than diversifying a portion broader are right the digital we meaning our particularly spend out that within company. of the to we to re-engagement? the great generating able And earlier the just And what's funnel Mike, orientation channels and – with methodical to mix we're reason really generating diversify that we focused as It's give to part the the on upper trying call, we're to is of of relates from right the media are the a of because made in the sales I point balance varying taken portion tried balance also understand And consideration comments awareness? and we or media perspective output to we Yes. that mix. Tim to media spend. And mix. or to we've a happening the of purchase of really continue of value edge that see data do and within of Are

dollar trackable helps on bottom different able a where because highly and on And ways. And we things have the to spend we funnel all company, to the the every broadcast analyze way are social. we we consumer between really spend sophisticated the multi-touch a and from like search that happening take And so of that we to that our us linear basis, in attribution down ranges do dollars. model. inform spend multiple every offline TV transaction that And really fairly and

have at, a good so hope year. on continues. And really And We think the is in to like really that effective going we ad and we're rest of continue to a place. that we're spend we're going feel I throughout leverage return the

Mike Bufano

just I it order the just QX, I'll one Tim call a apparel, so we XX% Sharon, touch average Joey. value part was of and then broadly, answer on to piece drove part, performance performance increase that turn but briefly we are apparel, over in order what to not thanks, seeing on saw larger Great, really sizes. that apparel mentioned that in

overall, mix guidance. whether if the about and it’s think more Now, it's performance type we’re part of there. of And XXXX people metrics apparel still in little Tim, to that shirts the apparel seeing a going the what talk consumer a we've the that or when and broadly you small percent in behavior of type what about showing considered maybe on That's stuff is the But saw quarter. itself. while of of is relaunched ways the behavior want we to that we one up certainly be

Tim Brown

to we’re often it natural cases when just asset trust in our platforms than the whole you in we to shift Allbirds quite that that to from time really synthetics of and leverage materials. of that simple they Again, the plastics Apparel Performance another synthetics fully the our stages to start But in to that focus the a a category to is make make well of think the early then will lifestyle we’ll with of apparel, in And Sure. realize before was able I as the some of very really transformational from see we mean, better long products I of and it to that Wool continue create material connecting And the is pair brand footwear. how differentiated. the founding principles as founded we in we’re was apparel shoes, terms, the think in goes And a apparel – we’re journey understanding do and cheap And differently can of of this in offering competition. and also one that apparel apparel do on Allbirds, a performance taking Tree. core strategy. oil our I think to on brand. throughout frankly, kind idea the you

Sharon Zackfia

Okay. Great. Thank you.

Operator

Thank you.

question Our the from next John Kernan comes Cowen. of line from

please. question Your

John Kernan

XX% we at out on the mix, targets, gate. IPO channel And my those getting competence to the the of how congrats Excellent. next in end question guys XX% medium strong the that XX% geography next and high year. even and on level just to year. core detail think hear. a on to about type Thanks term should It’s on targets for great taking of Any category and revenue growth

Mike Bufano

recovery it. the a couple ability I’d see you’ve of as seen the – we the clean that those drivers, white are a north those that will Yes. continue XXXX, don’t existing that’s right? know, and space drive huge non-COVID opening quarters, that the even stores XX%, year. with we the about The retail John an stuff in say of types last into of mega know have of the we the things So think you markets, and stores new of driver U.S., both internationally most when

we see our those ability really of opportunity product the big LTV a and lot the stuff within customers about expect Those to launches new of markets. what then see. to So we kind grow have it when a acquire those. comes with this of drivers talking and lot new been of And are to guys it’s both

we kind the to million we working our is We’ll and it’ll So more And is as we believe on that And really QX well work year. now. little preliminary gives continue just that peak a for right go know hope, $XXX is more real we it confidence in next give a stuff number. which here, and again into that we high through of little of us, bit remember color end info get once us season.

about a February. talk – bit it to with with you QX more So it on happy we’re little in the calls more

John Kernan

follow-up medium-term targets, margin the to the of the maybe EBITDA adjusted driver high reaching go My teens. mid expansion just we on margin gross Like it. as Got what’s biggest forward. margin

Mike Bufano

Yes.

up they’re that biggest margin really the of drivers going there’s to things gross over three there expense, get So term. the medium

sources retail are those So gross Physical international the like first accretive. I referenced. also and biggest growth, both our is margin of just

So half about come that’s a factor time that. see big to over from we expect is going to

here. logistics just The we’re sort over second of to that’s piece five defining some going see as the term, the of to assume think years going what we’re come, again, which is we medium of costs. normalization course We

think the the or think of lot levels, elevated we So we’ll not we all exceptionally way XXXX don’t saying today. pre-COVID we’ll – we to go at the back are don’t levels but be

able higher going and it are is talked customers really get that features we’ll then we technical come of the sort track think record for that gross the basis said, then another mean, and XX old it that there. great Launching about that products that of the some guidance. third that’s Like new last if we’re points hit to over proven we’ll way. you on the we points XXXX about normalization I right? do call, margin it few And the I of that seen over we’ve looking the it, years. stuff basis price if have on at last piece from be getting XXX the margin that the get So to warrant gross the XX midpoint to category. the And through fashioned to call, of higher a have

John Kernan

helpful. you. ran as to And best out of That’s holiday. Thank luck we Awesome.

Mike Bufano

John. Thanks,

Operator

Thank you.

comes Advisory. question next Telsey Our Telsey Dana of from line the from

Your question please.

Dana Telsey

see Good the progress. and nice afternoon, everyone so to

you. expand what portion you So on bit talked you decrease a seeing gross can that margin little what grow little you product do in store going the retail, about of there? see that physical costs, do you of with you cadence as are the and size how a openings assortment? think in How store about do you is the lasting? the you next into your product As appropriate year? of Thank think And long

Tim Brown

Yes.

physical Joey and one one. first the the on start can I’ll take So retail

gross and have scale, So size, we of bigger, we get is there. them. that the story lot like part products really engineering will a think more as that’s improvement, improve as like And more grow scale go a continuous as then, have it’s power is only I we again, with as forward. more it we we’ll to And the big continued things coming those what and and margin, That’s the of have on this it. honestly,

contributors, one Dana, that So part the gross of margin on it’s walking it’s bucket third the I through over definitely time. that John the was of just improvements

you add on So can more retail. physical Joey

Joey Zwillinger

this the fit side right the just viewed about and as a exceptional months and and for of mentioned is we between do And really what how traffic great landlords. create I with – really – We we’ve result the apparel as driver footwear that’s we’re customers. learn layout we XX past that model earlier, done how for in to fortunate work take situation a retail. throughout of retail a physical service being Yes, how our we multi-property

for openings, what year maintaining we we And this experience. terms to reached that do everyone thoughtful in we on to give This year. when here next would we’re new a think year. call give we’ll in we’re expect of did the at did we’ll exceptional trying going nice more can rooms And really a February. XX fit pacing, XXXX, about than space found And have generally an say around smaller plus. right as see X,XXX, service forward. we you course. to into and great this where up a X,XXX think kind are X,XXX you And may layout with But see flagships all of feet, bigger, size. you so then we box just of we just go And that’s feet fitting I that’s stores, have be square level, markets we that maybe do may more X,XXX high numbers slightly small customer in that a the annually and is a to can end But figure

about attractive keep result has ones, right we retail to employer what that. during assistant people. and and the the broadly great in then of It’s being side. U.S., the on and go is, deals, up brand plenty we really we’re out of on that with – The that capital and there’s we as spread to And store significantly And a experience. it’s of our up there COVID that is we deals need NPS. something making reflects specific fantastic that to traded mouth in XX get for based We get right people estate in fantastically a way most store experience, the a is pretty fantastic fleet and have we can that’s improved into sure that very picking probably great leaders we limiting a the And for across not we hard. the capital retail. that leaders. to real that significant deals And customer the come the factor. drives our human what support the Our comes It’s is in smart us work work we markets being capital stores to human human that promoted on opportunistic seen does company pick over word we’ve consideration about that available do the whether And treated the it.

We digital get that return that sure to powerful the enough that not there. it in thing, creates we’re to And these digital. something on it halo level the omni-channel so because store experience we get why into they only then what that working is a mentioned next important first and the when of we second kind on, that customers improves. remarks, have but you remind year. I more often this repeat so come earlier the but reason the give think customers and they are think And And marketing those good, the go time. store we’ll get They about we so there, it’s repeat maybe it’s time on home, in go we it. to my X.Xx markets, the it because Dana, for powerful. model we rates is is in specifically on lower you, high mention make spending that’s our find again, into in just how right when everyone, when So often efficiency they one again, try fits the buy And are. customers

a we just love – in meet walks And from NPS the turns see XX% terms have company, earlier of still this can remarks. need repeat in what the is to product, hope into and great just happens when NPS and roughly around awareness more the XX%, product from what exceptionally fact that We in and you the So I come people. and they I think from everyone that’s translate when U.S. understanding away engagement. our into aided And meet experience, you meet people would high. us, say the nutshell, we –

we’re future bright, So that’s we’re think journey that’s And – that the beyond. I optimistic really is the while on. this why XXXX is so about and

Mike Bufano

All right.

quick about while we’re I has know that gotten call, to second. out a I we’re had release. questions been time. just we’ve earnings of even on the for Joey in on Kyle just the operator while of and cover want very couple the a one call thing count is share I also a comment. closing So the

this count our just to be share remember, X/XX. So clear, is of as

counts. So the end the of was QX, which pre-IPO share

of offline take tied everyone’s page, from you of did a Joey, the questions say just close at All we But or stuff. kind earnings up call? the to toll questions answer But my get the the boring on just same that I’d so a to last questions analyst our first we’re call, of any of finance that. So of kind why don’t couple on or clean right. happy investors looking model same that. about That’s out kind and that way.

Joey Zwillinger

team foundation to to happier on couldn’t stakeholders. mentioned, Sure. Thanks, we’ve you just this a opportunity And congrats created five this everyone. with just everyone. we to we’re kudos the the grow big that Mike. Allbirds And close in built take and other last we’ve this be with as note And the to And be take investors, business. stage and a wanted along to stage this Well, analysts thank of thanks years. thrilled alongside we our to all, to continue with and

So speaking to thank you quarter. with all. Look you forward next

Operator

program. in and conference. gentlemen participation today’s conclude your This does for ladies the you, Thank

disconnect. You Good may now day.

Allbirds (BIRD) 1 Dec 212021 Q3 Earnings call transcript