BIRD - Earnings call transcript Q1 2022

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Operator

Thank you for standing by and welcome to the Allbirds' First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today Kyle Khasigian. Please go ahead.

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

in of will impact and to certain measures which and are items. that any during non-GAAP referenced discuss non-GAAP addition headwinds, achievement adjusted statements refer duration this factors to earnings reflect to start, we GAAP involve this and issued on that statements could obligation any the no other These the make time risk substitute forward-looking and a federal call only of adjusted I targets, for the These differ our that Form more like today. earnings XXst, securities for of affect number detailed statements XX-K for call should the results well results. opinions financial today revise Before of that year to financial not to results our adjust annual our note remind materially. as actual a we Please this EBITDA laws outlook, are in and changes EBITDA SEC of uncertainties that description these medium-term of including release the would report we milestones, you used XXXX for release be we our will meaning eliminate reflect results. external of forward-looking lifetime margin forward-looking may occur Please the also sales undertake of after as filings within our as certain December as matters statements risks cause about statements a to ended that items and call. Also to line that our our GAAP date

in non-GAAP their regarding today's a directly comparable financial find measures measures measures to reconciliation GAAP will most non-GAAP these these financial additional and earnings information release. You of

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

Joey Zwillinger

Thanks Kyle and good afternoon everyone.

expectations. quarter first XXXX The trends focused which to revenue with volatile XXXX as of We growth are and XX% creating our versus adjusted topline XX% both EBITDA robust basis controlling with and we a on net one against results includes along strong tailwinds both to pleased backdrop. compared right two-year in the controllables line on deliver are accelerated a Macro headwinds now. and

people Our US to business strength lifestyle go to physical in continues demand our offering work digital as retail. both increasing. show and core for And back is

believe consumer represented in international estimated year-over-year our in % would notably created spending most revenue with in mirror. the have our of to of our brand QX, As approximately buoyed in have sales post-pandemic in by in by Russia's demand further a same in the on resonant the run Japan. and power be resonant into the drag which product. Europe extended the and of quarter International first the digital-savvy improved towards invasion international an into in to in international time, EU. highlighted growth pricing was quarter COVID slowdowns receipts and Ukraine business, China regions Coupling mentioned China our we omnichannel is the a XX% some retail to headwinds strengthening the we which have markets new model our demonstrating more headwinds previously, particularly The the in due XX% quarter, due of COVID in quarter, rearview in and sales US dollar EU is further have additional and At These million X% headwinds restrictions. a end Europe reflecting business. the and grew certain $X recovery growth to China

well $XX to outlook XXXX, we of more brand the Underpinning sales affecting conservative we in our our we believe strong full transitory have factors. and reflected of this approximately for our is short-term in the of XX% range the XX% million setting built, at international year for changed us external this business, despite we pressures are balance XX% will XX%. As be durable short to $XX our deliver revenue in to of on model to top is that, Mike, We of we in despite million, the target that providing in impact confidence business. to these managing operating a growth the year decades the from growth have but of line revenue medium-term outlook international believe lifestyle which strong expect today. our growth reflect our guidance XXXX, look outlook what purpose-driven More up are within profitability, factors to we're and

to As reminder, product scale over to to on speak I'll innovation, and provide product portfolio store business. growth our going to jump a grow our our two. pillars Tim turn things are three to deliver color the back other innovation, and I'm to international

Tim Brown

already Thanks, we several compelling starting everyone. believe sustainability. we Joey, XXXX. that product, today, hello XXXX portfolios. far see performance highlights across on and road entering our are were thus And There On in told progress we what and trajectory to you and the across our map is last towards in excited our to a our lifestyle you most to with product history. unfold share we're brand I'm earnings call,

months. headlined performance Sliders shine. or to deliver We've shown comfort product reinforce into the great seasonal running and our lowest a early We of summer carries sustainable and to summer XX% phenomenal yet, Sugar our heel-to-toe. from also two sold franchises leverage latest which Adidas includes three lifestyle, more core and spring through April footprint our heading SweetFoam Zeffers, with consumer and tree natural offerings material the shoe, ultra-light innovations dropped days' have our than performance our collection time. that launched In proud a new platform super extremely rain carbon We're inventory by in in strategy this response. our First, collaboration of

our of recent our We to a apparel the also extension unique A shore, successful reengagement of compelling material use our tactic into was as our a celebrating this switch strategy great switch leveraging same franchise material innovations. continued platform. example

build visually and offering performance and new the continue In positive colors of and consumer of our trial design headline of our Tree to launch third with best finally, Tree heat performing And out our two response. rollout franchise, the performance our We bold week run the editions. Dash to limited building through Flyer, is the most this yet. shoe the bold latest we're

perfect on Flyer lab a X,XXX its countless run is run and runners race attributes. a performance. to in has with extensive testing gone wide and anything shoe conjunction tested on array in through conditions currently perform of launch our iterations community. of road Tree shoe. through in has clubs development and developed activations the on anchored happening idea run in road of XXX miles to been across between. Designed the in This performance our comprehensive or than remarkable with supernatural a are midst our The content validate We well day more The and good all collective equally over innovation climates first the confident both by to

its so this meaningfully first of shoe The The our product about stripes with what rate excited kind is expected and this XX%. of midsole category. in a increase result first credibility special our Tree launch to of SweetFoam incredibly all highest at makes is are as for a made core technology. Flyer We our high-performance the rebound runners yet

SweetFoam XX% synthetic, launch improvement, a continuing white leverages reduction in commitment and less to space are at versus to tap logan another plant-based the A and important are step oils midsoles innovation for of footprint the is responsive, on usually made reductive require journey flyer even provide enabling bouncy relentless the strong alternatives. performance SweetFoam. style more manufacture XXX% testament than of category. into existing midsoles airy While design while sustainable runners. XX% SweetFoam energy from our to to petroleum-based best XX% versatility synthetic petroleum in design Allbirds' to our Flyer's the and carbon lighter Tree The

the Joe could high The I we an time mix today. bar of and this environmental comfort together is our combination and are in design support sport centered powerful in average a elite professional As insights a with consumer. finish engine a a purpose that anchored runners will this opportunity and and innovation in and take Consumer XXXX, of lifestyle the full I falling patient saw deliver natural on having Marathon performance XX is for the brand between the built create that XX% material time increasing brand us to XX, and When times declining. An upswing, healthy customers high are of innovation. running or athlete, of of through XX on got short, ethos know meet that believe sustainability. over XX where minutes are In full rather runners and this by is by joy slowed to Allbirds' we uniquely a are the runners driven growing years. make demographic and on purpose of stay Recreational group core our consumer to positioned they an to desire runners a than new are. compete. generation running who those Allbirds their last index number is

we have values challenger a brand, As driven.

is naming most This mission. flyer step credit XXXX one flyer. which to beyond performance the launch comfortable events line world's innovation like and we've overall materials their We delivering do influential the itself. of week's Magazine most the honors highly at the with bring deliver are a named work overly category engine innovation category. Time huge by material running branded XXX performance sustainable last by of again our is specifically mostly are sums forward this of out our prestigious to a a Allbirds not footprint is companies performance it shoe. run this company ambitions they've in Since to our low that Time a the joy will calling the to and feat us up. carbon time natural and in in extends year team, time list in we Back that great we continued The progress differentiated performance from XXXX, managed to and and for for products A and

are in forward ahead We and excited to lies about energized look more what calls. future and sharing

our of stores and international. Now Joey to growth cover drivers two to I'll turn remaining it back

Joey Zwillinger

discussed was earlier. business humanitarian crisis macro Thanks our has I with our start an consumer on our of In of envision impact Europe, and the store by and is there of and digital two the European Tim. in retail being of influence U.K. growth we working slowed QX the and petroleum focus Germany. where resulting factors, indirect via the vertical I'll Russia's inflation the had this, in Ukraine regions Despite on in Europe prices. rate psyche the international our model believe particularly of

In preparing China, slowed sales partnerships. restrictions As in but I'll mention four believe via third-party our have stores bolstering the shutdowns this slowed through in COVID overall impacts for the and China, on be we we XXXX. later. are these are to restrictions demand business varying extended of severity of We through approach in transitory remainder region.

important U.S. as scale-up that an the to Having grow a least like the established We broad Asia, growth early of foundation a continue international as we we is awareness and element believe to our as brand strive our of Europe consumer in our to which have business regions view opportunity the set in large algorithm. as we into at elevate invested from

growth Now and portfolio distribution I'll third turn strategy. the to our store broader pillar, our

purchased drive new our with past times business, produce multichannel our those customer, through productive XXX% customer of tends customers a the customers. to than increase quarter absolute profitable number serves well efficient multiple growth. quarter, Our a acquire including year-over-year first brand now stores. in us spend most driver to the excess is US awareness channel. This and an digitally inception in more of In of single our retail grew biggest who on who times journey this increased in footprint was shop and the from averages of repeat our effect company's X.X repeat who and highly retail stores overall as and Opening provides in both mix new an halo and means

highlighted in flagship Flatiron a locations. US With stores the we District, four successful XX in opening by QX of new now Manhattan have

in $X.X strengthen on addition million store our XXXX achieving XXXX, for stores the continue pro US opened earlier. QX and targets $X.X sales in to Based conviction In expectations openings, of are forma EBITDA in and and these balance to margins. new new we seeing performance we our have the performance to of previously of to gross strong four-wall XX% store shared million continue in low stores

When just that have to we elements our power in the QX of we that and e-commerce creation set we're omnichannel model, our reinforcing value not We Allbirds and is out that core also saw at at has its but manner. I'm years. zoom distribution and during tremendous not omnichannel confidence innovation greater modern led distinguished up aware the this coming strategy. vertical the that strength brand also the by and substantial materials compete sit US product operating with in than any Tim And that conducted of to in underpin model. even durability win look today our a model. spoke being by here XX% of XX% we we vertically

to awareness the retail touch product we by catalyze vertical select we the target believe an points pipeline our exciting can With additional be come, powerful now distribution. additional and this layer consumer incredible brand in can another we across foundation elements our increasing in assortment have to strategy and now These segment. consumer growth third-party profitable is where

soon. We share Lands as in live Sporting first as in awareness two of with way are to highly view drive that accelerating low are here brand to the sell-through excited and we banner Public of and Goods growth. awareness the Early our with Zalando bottom-line announce US a while to third-party we With and indicators are effective partnerships Dick's QX build a pleased Europe partnerships in are credibility additional and US top aided positive. on double-digits

This in ones which pleased often also our our core promise lightly our on rerun than our circularity work we're resell early on Finally, us core we to delivering the innovation performance a distribution target reaffirms shoes addition model. of of program to different materials. consumer at for brand platform the to natural used allows

to us This are to six for remarkable we of $X just flock With in our their in a distribution and up grateful dedication the And product work a hit of model quarter. this engine is humming, future second point. us this getting billion sales milestone in the lifetime sets hard years. accomplishment to the in

volatile a staying with strategies on on and Mike navigating growth and are against remain today, profitability financials while outlined Tim the We environment, outlook With value. targets will building in discuss shareholder down focus that on review long-term well, the and greater I heads our course executing a our detail.

Mike Bufano

to well discussed months us so a technologies effectively in In with the on consumers pricing quarter. growth structure QX, new taking a the to of quality generally pleased maintain that signals along several products value period is and establish XX% performance some as which refreshes in the product this of architecture regions and the was believe both past last increased to This use we will average impact deliver pricing XX. price net executed on premium We architectures. current price launches product strength and commanding with just performance, and QX add order this headwinds, Thanks, to occasions overall especially of their as Joey. price advanced value positioning that materials in XX% an demand. thoughtfully and out which XX%. to observable We're orders the strong Allbirds increase premium. stock call increases our the like up revising enable picked up channels, premium second brand is pricing given brands after our external and inflationary the new stronger I'll much as come March, on drivers February our by This a environment color no our revenue Joey We primarily and opportunity attributable increase other

like promotion pricing, in on in I past, note surgically. done we've to up as we QX also wrapping that Before utilized the would

manage see drive growth in inventory. to realize us us XXXX, helped to the In price future approach continue do will full XX% effectively this yield. this and You

the year. gross which QX intensified XX the the XX.X%, shift points to was higher-margin offset gross $XX These now at which well by to than Positive retail to with Turning up as headwinds we profit, last through positives impact quarter. mix and drivers were as basis margin XX% pricing. million physical of more of down margin moved gross products were to as external

year-over-year negative basis cost unfavorable XXX rates spread points of an XXX estimate across FX logistics distribution were factors: headwinds three One, gross basis impact when a sales in mix our estimated points Two, of macro-driven a impacted business margin-accretive basis basis QX center XX we margin headwinds And XX points by total had lower year-over-year. international and compared Specifically, of the year-over-year. XXXX three, point to approximately year-over-year.

the Moving to quarter. SG&A P&L. in deleverage down

to million with and we costs. saw were stores the so store-level XXXX XX more $X you compared approximately and release four drivers along have company opened As costs of SG&A in stores the the here start-up primary in QX public quarter

estimate guidance demand second On in this international we our mix quick business. how marketing around the the the unfavorable QX, and and believe Pulling now the China negative we up We of inbound business external targets, is in there Ukraine and XXXX guidance efficiency year-end total close gross are in-transit XX.X%. headwinds $XXX target, revenue to our here. million, basis our accretive out XXXX. guidance to continue targets, to cautious Compared XXX $XXX.X particularly XX% a the margin net target combination are we of is factors in resulted facing to FX our two-year extended as gross our like gross on million of target will to accretive headwinds headwinds our on further how because range more curve. incorporating XX% We $XX.X including our guidance with from estimated to revenue about impact to impact the a revenue of up gross million target basis due within margin represents of center came international have our two-thirds two is an we business, of highest ripple together, $XX FX increased Ukraine balance FX the levels XXX gross a we year in when target in-transit middle guidance China of the degree the million. XXXX inventory. COVID $XX from thoughts cautious less million XXXX solidly targets. is stay that our all logistics length acceleration Two, and $XXX sheet. and million. balance especially margin share lead taking about distribution that the to guidance QX that on At and year-end and effects from XXXX times restrictions the prior these an restrictions net margin into down year-over-year to the Factoring range a of impact this updated Breaking leverage. to updating on severity targets rates. FX, the With midpoint define estimated our full basis higher was impact of gross be the which that thinking cautious of quarter. have headwinds, external it through logistics outlook medium-term certainty an environment to market. EBITDA to million one-third our factored drove continue of navigate target basis into our points XX%. XXX our as also external the and impact marketing due the and Until one-third are at which of the gross to external transparent To of margin accounted to inventory One, taken the I'd to a in ahead year-over-year versus XX%. as this and and of freight headwinds from QX, Inventory XX% for impact on some costs, China's We're $XXX profit net international all biggest prior COVID XXX XXXX some adjusted to we're about at is impact driver up this assume guidance to demand represents sheet. that updated costs. and crisis about XX% the in of higher At our the balance points. of strongest outlook Compared unpack range comes the outlook margin front in the crisis channel a XX% its approach, is prudent well points change gross guidance on target profit of our to more of was estimated XX% Taking rates, account, look industry-wide

now Russia's fuel costs of headwinds points driven these increased be of estimating basis that to by impact of XXXX. in impact surcharges, was due the XXX to estimate the external of shipping XXX are byproduct Ukraine. rates these XXX and to a basis We external outbound headwinds FX points Recall we invasion

total of we looking now points So are a over impact a two-year of XXX to at XXX basis period.

spending Looking negative at our year $XX offset updated of guidance EBITDA tightened the of XXXX just negative I'll we million, the million headwinds. SG&A of our $XX partially target to note impact external adjusted balance have to that

In XXXX includes estimated estimated to external million costs. addition, of public most the that recall impact of company an QX. be acute is The in headwinds $X the target

versus FX $XX to up XXX revenue XX% represents this XX%. QX to $XX XXXX XX% net points. growth to QX estimated million, target range basis year-over-year XX% impact an million is of Our XXXX, XXX to including guidance to Compared of

of guidance cost. company including EBITDA million is $XX public adjusted there estimated that QX $XX here. Our an are negative parts of a million $X moving negative target Appreciate lot million to

few necessarily Let given thoughts the help it's this give more on won't color a environment. you me model basis, the an ongoing helpful We but to external year. feel out add

grow XX% to one- on and acceleration the basis. a and-two-year targeted is range revenue net US in year full the for First, upper

year to digits. full revenue international is targeted net Second, mid-single grow

international revenue grow rates FX the to of is low impact year the in targeted net Excluding full teens.

medium-term growth flywheel to velocity our retail increased a in pipeline second net revenue of the of US. omnichannel stores our target XX% is and strong range more the the by middle be total of in Third, targeted product half to driven XX% the in

adjusted channel is augmented In half of incremental profitability into to back business our tightly growing note. the Fourth, And the model housekeeping the year responsibly this XXXX roughly as future. EBITDA the costs half focus is via managing finally, select the the in and last breakeven introduction we of targeted sales provides. partners be and on second and awareness addition, by and one third-party further sales

For full will year stock-based XXXX compensation million. million approximately we will and that depreciation be approximately amortization anticipate that and be $XX $XX

by the Let our external we're headwinds of facing gross medium-term direct in few me our close confident a belief remain revenue now adjusted right grounded targets of net teens. that reiterating high our confidence XX% are achieve largely growth, mid- We our the EBITDA vertical transitory. XX% margins margins to ability in north in factors. is This XX% channels and to in to

excitement international historical especially our that it's retail new rates broader in feel footwear. plus recovery, When line gross once and to the at US that's to getting margin pass significant a the will in us of top we of accretive growth. improvement headwinds XX% record be the the with road external our gives of its channels. our accelerating party map conviction gross confidence in flywheel the margin for US to third growth our The vertical our we about track look business lever On direct our performance EBITDA the particularly product potential business return omnichannel

continued products of past basis of two of margin years. gross strong easing higher-margin XXX to We have a international power, headwinds our we growth faced retail points XXX the the the and pricing new least businesses, hit this accretive logistics at cost clear our a path introduction in portion through have of the to over target

top disciplined through to to approach that lines. growth things Q&A. committed bottom open and responsible balancing let's are the we to Finally, With profitable a SG&A up and

Operator

first Please [Operator ahead. Your you. Boss go with Matthew Thank Instructions] question from is JPMorgan.

Matthew Boss

Thanks. Great.

as new It mid-XXs to low think I up think implies fiscal half XXs sales to the growth about relative the guidance, year or second and acceleration, we CAGR. the So past.

drivers What move confidence that of in reacceleration? forward? are as I the think in remain gives your you what second So half guess, the terms the confidence half in we of the you back year

Mike Bufano

Hi, there. now. the continue there's is for of balance rolling back to One, things we the the out Matt on year. have we to We'll said question. do pipeline Yes, which some a script, roll going thanks product a few out strong of, through what the really

So behind we tailwind us. feel good about having that

have certainly then, going addition, basis. with which are going stores In Coming is the a to is on growth year-over-year the velocity more we seeing increased we're to more show omnichannel that stores, the up help a along we flywheel, that in more going and And in little to you continue are QX. in to business side. have saw US results that lastly, then even our on third-party bit

in volume still So back it's on a basis year-over-year the help sales the while half relatively small, does overall it a of year.

Matthew Boss

pricing utilize you picture or competitive landscape, promotional the Just Great. larger be from any noted that backdrop, you would pricing? follow-up and your from And are -- then seeing on you'll the customer from pricing promotional any maybe to Is a continue base just helpful. promotions. activity one on From the promotional on front. perspective, pushback margin anything thoughts

Mike Bufano

Joey, on comments you The the one in took year price the sort one of in the want on was took if landscape. Yes. August. Matt, this of we is increase a substantial. bit then competitive modest a it, now broader we I'll anything add Like last more price to piece more touch said the on call the second I little

overall, the I that things been Score, just in value speaks really them. of what It's like pretty high Promoter And early. tell March. obviously, in drop the the demand. Net to really think, went haven't you observe brand in early the able any people That like power We off products the giving that overall you're to quality, of

there's pushback if So that’s holding we're regard comes the that Again, the you'd when early price know, broader that. I in add on ton markdown Joey, not don't how days. it seeing anything of to increase. we're landscape want a But on promote. to or

Joey Zwillinger

used, by Yes, impact bit mean, large we and maybe business. And a the fantastic some think our promotional what customers industry. increase we've have I see that But across the -- with activity and full customers. promotions I for acquire LTV of on we from selectively when there's used price seen -- past the really been seen that in -- everything little we've match in we've we're curves, do our

it's interesting as selectively that And to in think really that so we brand way make we scale it to lever, sure them and that's can use selectively a do continue we accretive. do a

really a clean making on inventory our and lever. really our heads and great position business manage just we we're a So, down and that to as using focused sure, keep

Matthew Boss

Helpful…

Mike Bufano

Matt. Thanks,

Operator

comes Stanley. Your Alex Please with go Straton from ahead. next question Morgan

Alex Straton

guys. Thanks question. I for Hi, taking for couple a got just the you.

quarter. about on talked is the it you guidance the from the that back in of of year in happens quarter quarter second first, press release, in you through, you be the says expect The that that exactly full the of what downward in what you the to means? the half? mean, just walk kind second Does kind how vision that me second Can the are fall guys off majority assuming

Joey Zwillinger

Yes.

But impact far receding bulk so March we and to the to that see certain signs consumer happen invasion degree. I the in in is the Ukraine to it kind our continued we're look segment. for into business, International the where on today. of a demand impact And is to you to the extend related April seeing of and think, that already that impact saw commentary most of that in at on biggest of we which if

already from think a relative now. in to for of do the inside China, conflict, in And homes direction. to status up positive their that returning COVID, days somewhat I So restrictions trends see we been locked people have the XX of

different have, the we've and Shanghai occurred. severity modeled to not that when continuing of in to this locations. that And just of a impact of remainder that that's we going starting be those of think we the we've that's some going the to so, And specifically. year, in to -- extend of QX, because that bulk seen is but that -- to timing for Obviously, is impact the in that's

Mike Bufano

then is the FX And just piece, the Alex, last rates.

provided factor as have that well. all of guidance peers the forecast banking we're using on we latest we side the So into from that your the and

Alex Straton

being it right quick inventory the How guys or any sense. are China you regions That one stands? Great. just lockdowns composition. Maybe feeling in in Are makes where of about by one is, now? on more your other impacted you

Joey Zwillinger

kick really we've shutdowns. to has strength in in China. yes, moved is navigating of We've This And impact out Asia our from a effectively navigate environment us with for The particular over well. chain for Upstream supply all this year, this degrees is of really footwear production a tumultuous So, varying I'll been continued through past that. Joey. the

to manufacture X So we in facilities no have really operating footwear. country that Tier

terms result a much that, we our to these as recent so, region. don't in supply chain see of And in that impact of restrictions

and faring well of COVID So stringent most now combating terms split between applying the and really in government is and production Vietnam are Korea, which responded of our there. less has much effectively restrictions

really really in what's upstream there. story So conflict. and good an is from the China in The on perspective side demand happening that

Alex Straton

color. That’s Great. helpful very Thanks.

Joey Zwillinger

later. to you talk Thanks, Yes. Alex. All. We’ll

Operator

I’m sorry.

Hutchinson with Lorraine from next question Bank comes of America. Your

Your line is open.

Chris Nardone

Chris on Nardone Hey, is for This Lorraine. guys.

quick So couple of a questions.

So expecting breakeven this the like roughly sounds year. half it EBITDA of you're back during

do partnerships you contribute better basis talk your remain can just how or public reaching lands and breakeven this through will a you still next year So today, know full confident adjusted you with EBITDA to And Zalando outlook? year? given what on

Mike Bufano

Yes.

given your So EBITDA. Chris, just that I on to know clarify XXXX we’ve question, guidance on first don't

what’s think probably So analyst of the some that's models. and I consensus models the in

half big you a XXXX. if look on the half investors of we'll forward the getting think for on to update continue to back us EBITDA path is I of do there. from year, in the say, milestone I'd breakeven though, adjusted at back And the

and to at I line my the do We're on I is. guidance a headwinds loud That really XXXX of the we'll path facing P&L. that understand. in means are those. SG&A the of just side of on touched overall, and message bottom balance kind to being this bit to like bit want looking cautious this a there lands line balancing of people we doing responsible clear. across message are think, top growth, we're spend these I that I the continue want kind and a as of sure that on external make some more the the

a marketing think It touched profitable business through I us. up. continues the on as of In but to this, I Joe third-party, channel on view good as impact ramp both we the flow and have party really for terms should

beyond. impact pretty that impact both But profile So positive on overall I story, really financial is business overall that the think the if small. in helps expect the we do half have back on XXXX the business accelerates, a and it to

Chris Nardone

you, All guys. right, thank

Tim Brown

Chris. Thanks

Operator

from Guggenheim. next with Bob Drbul Your comes

line is open. Your

Bob Drbul

me. for questions Two evening. Good Hi.

or think and brand is, little sort on awareness would levels you in think helpful And first fashion, think to, talk progress I the around in I sustainable of you is seeing be the changes in that similar you're to just Can of one can category you're interest a that bit pretty Thanks. terms us? one any that you data making? talk any around. footwear second level sustainable the

Mike Bufano

Sure.

to of double-digits we awareness think month-to-month would to looking at grew a But low we low-double a XXXX brand other or really from we're looking I then, around flywheel basis. do to positively. into increase this XXXX and brand that campaigns we figure yeah, So got up see directionally a techniques on digits. that great suggested building all which using about is not that kind of is quarterly is partnerships kind great recommend running. continuing that We're of and overtime what trend from And we're distribution

we're also stores doing And right but we're as methodically awareness factors. awareness all with great lift, in the that not with about it's good good marketing. So only seeing building that lift

means that, leadership as comfort supernatural our that to around the we're think in position well So we're as sustainability. people positioning that aligned what brand

across the not where well, to And but awareness. selectively better variance the at that those And see third-party where highest because and highest of channel. catalyze that's and EBITDA flow great really top concentration our in you partnerships the you'll bottom-line marketing trending we through, stores speaks for just on there often great strategy, that of for all expect really geographies awareness. so when level course, direct only that line growth aided is our layer of that or lifts And to those it we see efficiency also just highest of you highest specific is look the the if concentration

of past are for of that say, quarter over minute done or that just past few months they I to in to brands that, that. because And have focused products. We not do So be terms They will not speak is our overall ones, of increasingly products, Tim, just consumers believe on that products sustainable phenomenal fantastic of that to on we've we every picture would bit towards kind energy continue great just making but values. and have gravitating environmental also as than brand to business build we awareness. it awareness. the And data that believe buy consumer some faster frankly expected. do grow do to products we've in that in continued see But then, the in hand we what a see that's sustainable. be on the even this highlights has maybe And I'll

or in point double us on see it's in-store, that whether really that down and our platform. this every you'll party campaigns through digital touch So third to on emphasize marketing of kind speak

Tim Brown

material point sustainable the release it last is innovation, that week but reinforcing the, a a add product just I'll recent Tree is Flyer powered better. from by Yeah.

in research high example experiences. consumer performance think product but that that better us And level. all I flyer think is yes think and is at that's saying, executing focus. a I sustainability matters, only I of it's the in in very of And service So our great a

Mike Bufano

with a bit. you All right. Thanks Bob. in little We’ll chat

Operator

you. Thank

question from Your Altschwager next Baird. Mark with comes

is open. Your line

Mark Altschwager

detail afternoon. the afternoon. this for Good all Thanks

So million. guidance $XX was of revenue the midpoint reduced the

estimated I think the of million impact as million. to international $XX you $XX

guess mean rising you're wondering that to revenue the prices, you just domestically? for signs has momentum the market volatility, if brand US? seems clarify any I'm outlook demand stock saw et in change any energy for seeing the impacting nice really It is could like I underlying there your So been you cetera some I quarter.

Mike Bufano

about I'll start the Joey is in That's Mark it haven't because about us long-term the medium-term consumer, that feel to talk what targets. the in saw That sort us thesis to growth XX% great drop to of US. this we is on in our No and then We any around gives answer tells that we confidence us. expectation seen that off little the turn a intact. short really

we midpoint like a outlook external million. just script, on million are we with lowered $XX because we're some estimate situations impact I here dealing taking $XX question Like to the Your open-ended million we in and said the of cautious $XX by with these the headwinds.

in kind of math Joey landscape to I'll there it model the on to you about up turn the a US. that the So question consumer bit if little but talk marries the hopefully

Joey Zwillinger

Yeah.

US statements numbers. we consumer in of Just business consumer made, the that the just supporting a necessarily confidence bit and a hit taken little the already just not terms that see Mike our has but macro in of in

tailwinds and get picks as from and And stores. are or that the we the traffic up have that the And our people I'd in as that so mentioned people restate reaffirm seeing we reading coming internally, can more we're back formal confidence to we inflation of at activity that impact say up, out look business kind remarks. travel we when We're up and actually want. markedly us see gives near-term economics People about about newspapers. we we hit those in see and that unit pick the lastly much to than anything product picks that

performance style comfort choice. are to are We the mirror. the a of made moment. I This the fact in as and we're meeting point we this versatility -- And COVID rearview perfect better receives that much of and blend the that earlier, is that's

there's restrictions think significantly the historically consumer whereas, ongoing the be confidence we've get just up When come restrictions a of fashion. see sustained past pickup So, and it lifted markets that when to a again in in to today. despite some we give markets. confidence of And tailwinds going speaks us our seen we business significant we some half. that in in this picks international out COVID create And US that headwinds restrictions international of lot some the

Mark Altschwager

repeat product apparel customers spoke as versus And does us some a purchasing months to a lot Dasher with are in like that What you. give X Thank those product introductions? new Trail color relative you on the the recent mix new which to. innovations? follow-up, you historical Can you. of and look that and Thank introductions the

Mike Bufano

brand that don't basis. we member here. just give we're I a a on Mark only out would Yeah. six-year-old quarterly

a customers we referenced we're get a customers just launches But really of doing going think Tim to time new still that the acquiring but I product very of always the our new We're of bunch and products excitement balancing the about nature of how some a categories profitable the And that's new customers. news to clip. repeat balance team in things And do on sales. product nice pipeline. into the into healthy also job by think over very energy on So and and bringing -- the the core from that come and you bring pipeline. those that side like new of at product

Mark Altschwager

Best luck. of

Mike Bufano

All right. We Mark. shall, Thanks.

Operator

next comes from question Advisory with Telsey Dana Your Telsey Group.

Your line is open.

Dana Telsey

Hi. Good afternoon, everyone.

margin go through anticipating price any XX%, is that the I it think balance additional As the far increases then in category? year? by quarter so you And basis first price for of year was much headwind about given increases are as And of taken you. built that the gross XX the you does international of points? around secondly believe how an we new margin differ only Thank you've gross the the with guide

Joey Zwillinger

Thanks, take margins. Dan. to first over it and one Mike on pass I'll the

took materials. you really the there we And there's varying large price and that did what for March by of if the is anticipate what year, that's across we through set full pricing action an in kind of For parse that levels we but we architecture up.

performance add cost our consumers So that on into more lifestyle price when technology build. we technical packing value then have similarly price in a expect those the are are an lot the we're and on the to we versus the and material. on to features elevated set going by And performance differentiating as product quality specifically consumer should

that established in has we're architecture. into So as we that been flyer the architecture fit layer new like will that now as doing

product at new kind change as that that most the ever and offering expensive that products the see core you of that well. some through will can line. we've And in flyer impact pricing $XXX that's introduced of So flow is the a

Mike Bufano

Yes.

basis margin price through guidance. increase And unpack -- margin gross XXX less on was question further driver I there's in external XXXX. your talked international. our bigger the So guidance. factors is two I the about here no versus up our and And prior points other walk The in of demand then kind headwinds when prior gross Dana from plan that

Now to it's XXX points. basis points XXX basis

about gross So the is basis XXX points if now lower. margin

head demand in your You the can international the from have would logistics being coming hold side that and the is than in distribution last the center on roughly and the kind of of from that's we kind of comes rest one-third stuff it it guidance been thinking what of target.

Dana Telsey

how get we and more should year? about should And Got running way it. the this about think is partners any third-party we expect should And third-party the year, to then distribution two that that? it up cost or that think added this to just on be we

Joey Zwillinger

No.

You'll from subsequent in the hear months. more us

really material also are a to to We and we and do provide in then particularly methodical into that a in of this that about will grow expect be and really business think to and direct how don't starting we going we XXXX. impact catalyst itself start But XXXX. haloing selective the

they're think partners the hear going coming all in So are us. months important these deep brand-building announce we're partners you'll we that really us that partners for and strategic

cost it built created terms multi-hundreds and channel of up business support into a stand from much of that. a dollars engine of direct millions more just we've we've of the that this So touched point. earlier high another again are really that Mike on consumer awareness boost -- like growth these great in just level. And catalysts touch that's of and in look this to than the could that And nice for that's product is so kind sales

the work. sales and cost like behind this that a so is make a And small really the to third-party operations that to just very organization partnership layer on

and for And that just confident as to provide flow-through EBITDA line we've going quite from is really add. be to there's nice So And perspective, infrastructure layer bottom well. technology. or that's why attractive finance a very to laid whether we're us growth groundwork thin largely an the be the in really

Dana Telsey

you. Thank

Joey Zwillinger

Thanks, a in bit. Dana. you We’ll talk little to

Operator

comes from Jim Stifel. Duffy ahead. go with question Please next Your

Jim Duffy

Thanks productivity question. in for channels? that did versus in in XXXX. lot market suburban taking pressure the about retail store to really more I Thanks. through of performance And I speak Good digital, fleet, more specific come or March it smaller you the newness afternoon. in business, my recognize, both you versus then seeing can bit ask trends locations? European urban was a store or little Thanks. to there's but saw to wanted the a you're

Joey Zwillinger

Jim. Hey,

of way compare there So on all noise is XXXX. the really lot to back stores, a to

environments a that handful point. I dense all think, urban we had probably at stores of in just

retail And urban the the of so recovery locations, high changing can COVID attest as locations in general environments that's in – I behaviors. to to a slowest result and pretty restrictions that have And densest everyone we as had street people's quickly. were think and and now we adapted

more in So And and we have really, be well. during the centers restrictions behaviors, really performed signing in and in whatnot. much resilient of started leases COVID whatnot. consumer Those or regardless lifestyle regions the those proven to malls suburban have

for looking which you positive the been as seeing Manhattan, a of bit targets uplift trend for environments. And of that really, continuing we're said, as on for we and stores with the So estate us to in in SoHo really new continuing hit comeback and leases up is real start are we're a confidence types ago transactions new signing a lot launch confidence when But focus in we those bellwether nice that our a lot if a that just mentioned. those gives seeing launch that I – on lot we're just gives month store we about a of a us are at to really store us urban Flatiron nice a and it's for of those to well. think a we fantastic couple did we of quite

Mike Bufano

it's And and... the e-comm Europe or impact, retail if

Joey Zwillinger

to the digital at the Yeah, slanted Europe moment. is mix really in heavily

then completely. was There to restrictions the stores would heavy periods. said, But of bit to that some just of impact again. of and high the say, a what I that consumer seen quite it's hard some during consumer. an prices on peak it's that to of broad-based does psyche parse out the it kind also based the so show resilience gas start of we've really And on And incredibly

Jim Duffy

I Thanks. it leave Helpful. that.

Joey Zwillinger

Jim. Thanks,

Operator

Dylan ahead. Your with Blair. next Please from Carden question go comes William

Dylan Carden

Thanks lot. Yeah. a

within Mike are curious reach? lot level, leverage What EBITDA is back levers sort of retail have do broadly? guess, there? about I your control thinking I control Just in relates outlook in that to more you third-party maturity a breakeven here sort your on of acceleration that of have the half your status a it you and beyond what marketing factor level confidence do international quo. is feel you mean, as

Mike Bufano

drivers the again that see. on a that's that year. the and And going to through the that to certainly to flywheel back the help basically half in party back range the of go product behind increase that then, the you well go will have as I'd gave Yeah. with -- fact continue the part third retail XX% basis, XX% getting to omnichannel retail we more middle – stores medium-term of comments year-over-year of velocity our certainly line of having the the kind top are about portfolio that into media we of place the of there, we help the kind in as

thing us is gives or of that biggest kind So gives us I the of think factor that all confidence.

Dylan to we're were beyond things that this cautious the fact about going factor next I think call. on this the also is than talking that, accelerate like, if outlook

of what now. especially in an broadly lot I the think starting you QX, hit to if a for the we're couple US than faster is benefits even pace a obviously more see That of like retail on the recovery Allbirds. has

model well. know You our

confidence that So I think got if some we have there.

the thing just other solely tell just breakeven. story again about for guidance. sales you year breakeven. out you It's I when we a growth started think EBITDA in I would EBITDA with referenced not -- The

on we environment back I which do if good necessary, would there's little trimmed more think in and pullback thing to there We an think do have a at spend, really in marketing responsible feel I is marketing and our a it's there this. the But marketing revisit SG&A like about. not efficiency a our balance as get what we even can doing wise. bottom our our size, talked I growth brand and and certainly think we're spend we levers are line top responsible that building and business a we've pull to bit

Dylan Carden

Thanks. Understood.

Operator

Cowen. comes Your Please next from with question Kernan go John ahead.

John Kernan

as Excellent. maybe the you XX% my Thanks talk on. flow to Good quarter. could afternoon, for up inventory in everybody. year-over-year question. Mike, taking goes XX%, It's it was the year the of up fourth

the we inventory easier, should is think balance kind how about the sheet? As the of comparison of growth on

Mike Bufano

the -- Yeah. inventory. big I two mean the big of X the time length of there in-transit are certainly factors

ocean a like a bit pace. on to though on day-to-day could overall some We started little see different have come that down have basis China the news effect shipping on obviously

any of kind the So closely. actual has itself. cost that's if something shipping certainly, impact we're watching that on then, And really then

first the I those think factors. are big two

new continue going to clearly, the to where that we're to through with product I have balance we're sell product be think a the launches. demand-wise, in position we going

the what on inventory easier the to down. not we’re over of with giving come inventory should do that those formal I dynamics So, guidance in I side see laid we out, laps we position happen as be on plan course sort year. where to we should get just start a the to But of the think expect

John Kernan

potential? Is across inflation this changed question concerned. you anything there Obviously achieving you the freight been now a labor just gross that's you're has inflation, quite inflation, inflation the on curious, targets thinking will My There's just margin long-term a gross lot of change that from a really amount gross out? prior changed bit it. the here IPO. put I'm in since margin is structural of follow-up margin next it inflation long-term think sector right I D.C. of has prevent Got that outlook. stores cost investors the the in are There's about way product

the a concerns across about look valuations group, in think at whole are expansion time, long structural I they we at and the sector. levels seen You margin the there's across story haven't

go can forward. these how inflationary you maybe going we talk of you're offset some So as to headwinds to

Mike Bufano

Yeah.

there's there think I John. pieces two in

right. pass So, question able in call, been where the on through I the than we've to show we said I there's inflation successfully. price. think earlier that the more when last started, road part And I think more like you're summer. we've do the taken were also

commands great brand And point, the position helps some that And beliefs, us from different that. thoughtfulness the products. I the launching products, think who strong of I products. to right, that margin of others come get tremendously a price for believe categories for. advantage back unique have brand we're think of with and those And people products and which it We and lot to launching people the in repeat that's Allbirds offset and the that story love long-term in have. the quality the And we new don't Joey's a anchor an in of then the higher

this. in huge are those think all I factors

like in kind from even So of time the news of the new roadshow.

over logistics products. two the of ago, XXX this two headwinds XXX years points when to again, And today just to cost new inflation the that power referenced, part I a I've the the be these probably, accretive of mini back that as will of factor. over strong the we'll overall The in take versus there. one. to The margin get then at growth us end think said But gross higher-margin years. introduction the other of a I we at a margin over Again, story, past that direct have factors announcing channels these basis and forward that do gross in if hit we margin. call don't that few certainly get significant to another That's the pricing thing, to bit where businesses. years. big where step We of my next little walk XX%-plus The our time. back, that's retail we in the tried repeatedly. international all That's about but we of from as big ability well look gross are

John Kernan

Thanks Mike the it. all for detail, Got

Mike Bufano

Yes.

John. We’ll talk later. it, got You

Operator

next Your question Please, Tom Wedbush. go from comes ahead. Nikic with

Tom Nikic

gross Historically, Good for like, the the of of of remainder margins XX% kind in how year? Hey. guess, in we for minutia. When the assume question. afternoon, Mike, Thanks sort head kind QX like spikes thing think my modeling the of guys. think for quarterly taking year, the some that of the I about more we remainder for QX. guess, had I do cadence you've kind XX% this you're seasonal the kind of, year? and range and shoulders that of where Should of you saw we

Mike Bufano

We're the have on. group. coverage to Well, Tom, first welcome to the to off Welcome call. you happy Yes.

to spending you forward. forward Looking more we time go as with

in decent QX the on that's you are there's on acute to impacts gross your because external If those gross a in both then has at have margin think though, ripple the I QX. most tell pressure sales certainly I in gross seasonality effects indicator margin, I and the some been, of historical you, of point, think pretty probably margin would our what look

in So year point, QX. the were of XX.X% at back the your part to we in

it XX.X%. I fairly year and the And get back going QX across of the have QX, to similar probably think think looks three obviously be quarters below part QX. I to that the to to the is

Tom Nikic

thank happy the I -- I'm well aboard. Got wishes. very it. to And think for be you much

year? a change XX this call to that markets? store is some And still as I you're willingness think, seeing does international or you growth said goes, stores stuff plan stores As markets to your the far that in open last the international XX of in for desire

Mike Bufano

certainly call on the start results have good feel with And the and the I'll in we're beaten QX and and seen to we've retail. US. XX Joey happy drum So that this still good in It's on think loud I US the heavily the the guidance that XX is weighted the towards balance feel we of point. overall about about

you more in you perspective growth on Joey, on levels reiterate little target. call. maybe doesn't change what it maybe and a our to XXXX earlier bit the of want some of the touch the store shared on So different international

Joey Zwillinger

do to have for the and continued we we've think store in US different do foreseeable regions. opportunities the skew portfolio to future. that heavily will We very I

different is And XX five just as cost can the the the does we Europe on those that a require on three-year it format based build-out the sometimes to with that versus are US lease whether structure extend. plus do terms the lower options versus is in China leases a typically term in XX of in in shorter or

lease how region. for omnichannel about play, to be all we each dynamic trying dynamics regions strategy that it's across the halo rightsized the impacts each and play So, be the in of And the in. how go-to-market we're

Mike Bufano

more I time have for question. Carmen, right. one we All think

Operator

at question take Jefferies. We'll our final Please go Helgans from Ashley ahead.

Unidentified Analyst

It's Thanks our taking for afternoon. good Hi, Blake question. on Ashley. for [ph]

You've answered any to said China just most due and ask know most international. on impact was of you one just them. line you could that, I quantify you that wanted I to on versus I of more? the -- if confirm Europe. top didn't believe Could

Mike Bufano

Yes.

Happy on off, to to coverage call Ashley well. welcome have you you have you happy as as well. First to Blake and group, on the the

to you forward the and forward. a looking working more team with So little going bit

was clarify then was to convey Just didn't factor that out We those impact China comment what bulk Ukraine. and I other the difference to the the two of the factors. trying from of break there combination impact the And FX. of the think between we're I the was made,

other that So was the piece.

script -- So the the of just FX Yes. put -- I what own that me my COVID I restrictions here if had rates. crisis about let second. I due due two-thirds About me China one-third think to to a it. let -- Ukraine impact and and for find We fact is talked

we're the in Ukraine any shared had out we and and what not was between China. more recorded remarks that So breaking

Unidentified Analyst

just how I we expect about But I one for marketing. stay the around it about to maybe then international? ratio talk Thanks of if of was And And year? it. on Got of of terms could should sales US versus that. percentage also a last is for don't the the you've know as talked much in dollars you know rest XX% then, that already.

Mike Bufano

in and gotten that in the out QX. piece Yeah. the marketing last we of on in did certainly the on leverage years We don't international. couple of And point, versus US have break dollar leverage

increased to of get drivers efficiency. continue that marketing leverage leverage to the and are We expect

drive marketing that's I pace the going channel a the own big both job phenomenal just think direct piece ramp us we And third-party teams the then another of awareness done our big driving is marketing up the -- through of as marketing have driver for certainly channels. us incremental retail our two no last be overall of to And then to helps efficiency. with growth that. it raising going is Number spend. on towards awareness mix certainly

good continue that line. get we leverage we'll that on to feel So

Unidentified Analyst

Thanks so it. I appreciate much.

Mike Bufano

so you thank Well much everybody. right. All

Joey Zwillinger

everyone. Thanks Yeah.

Operator

remarks. closing …for

Joey Zwillinger

just We'll a close out with comments. of couple

we've be that the China people those as particularly I clearly really And or outlined as conflict as the in restrictions well really internally COVID world with whether think well. Europe, feel regions some are and in dealing this circumstances, in we around it in unfortunate Ukraine.

things And pass. we these now. will from are that And Shanghai directly focus in people right know we yet, Our control we can on what this. affected

hit for that strength I coupled We have on on and in a and really that's coming shown is to road us and that And just pair out that's stands launched excited and we of strong the that beautiful as And confidence said. May think the general in a encourage flyers a confidence just as consumers point gives we've we product meaningful road hands those brand just financial we're we building when business. good for being outcomes the long-term resonates XX the what have you too, the pointed in map US, to starting this everyone we the and us model guys model on that to coming a distribution to the get something of ton our all map forward. their with with able keep that and well this

the So look thanks in next talk to quarter. with forward you all and again

Operator

you may we participating. And ladies gentlemen, for and disconnect. call. with that today's And conclude now you conference Thank

Allbirds (BIRD) 11 May 222022 Q1 Earnings call transcript