Footwear Retailer Cites Costs and Currency Rates for Gross Margin Impact

  • Allbirds’ Q3 profits decline by 4% to $32.5m despite a 15.9% YoY revenue increase
  • Increase in SG&A expenses due to new store openings and operational costs
  • Simplification initiatives, higher logistics costs, and unfavorable FX rates impact gross margin

US footwear retailer Allbirds has reported a decline of 4% in its Q3 profits to $32.5m, despite experiencing a 15.9% year-over-year increase in revenues to $72.7m. The company attributed the rise in revenue primarily to an increase in orders and average order value. However, selling, general, and administrative expenses (SG&A) rose to $45.4m or 62.5% of net revenue from $33m or 52.6% in Q3 2021 due to the opening of eight new stores, increased headcount, and operational costs. Allbirds also blamed higher logistics costs and unfavorable foreign exchange rates for affecting its gross margin. Co-founder and co-CEO Joey Zwillinger expressed confidence in the company’s ability to navigate macro challenges and execute into the holiday season and next year.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Allbirds’ financial performance, including gross profits, revenue growth, and reasons for the decline in profitability. It also includes a quote from the co-founder and CEO discussing their outlook for the future.
Noise Level: 3
Noise Justification: The article provides relevant information about Allbirds’ financial performance and the factors affecting it, including increased expenses due to store openings, headcount, and unfavorable FX rates. It also includes a statement from the co-founder expressing confidence in the company’s ability to navigate challenges. However, it lacks in-depth analysis or exploration of long-term trends or consequences of decisions.
Financial Relevance: Yes
Financial Markets Impacted: Allbirds’ stock price may be impacted by these financial results
Financial Rating Justification: The article discusses the company’s financial performance, including gross profits and revenue, as well as its expenses and growth strategy, which could potentially affect its stock price in financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the article

Reported publicly: www.retailsector.co.uk