These additional consumer touch points can be another powerful and profitable elements to catalyze additional growth in our vertical retail strategy by increasing brand awareness across our target consumer segment. Hey, guys. And we expect that to really catalyze better efficiency on our marketing for our direct channel. The company said it will be taking "deliberate pricing actions" in 2022 to fight inflation, which should add 1% to 3% to 2022 revenue growth depending on the timing of its efforts. . Before wrapping up on pricing, I would also like to note that as we've done in the past, in Q1, we utilized promotion surgically. Net revenue of $335 million to $345 million, representing growth in the range of 21% to 24%, including an estimated FX impact of 150-200 bps, versus fiscal 2021. How are you guys feeling about where it stands? The Motley Fool has no position in any of the stocks mentioned. There's a lot of product cost inflation, freight inflation, labor inflation in stores in D.C. I think we've continued to skew very heavily to the U.S. store portfolio, and we will do that for the foreseeable future. These positives were more than offset by the impact of the external headwinds, which intensified as we moved through the quarter. And we've modeled in some impact of that continuing for the remainder of the year, but not to the severity that we have that we've seen, and we think that that's going to be -- a bulk of that is going to impact in Q2 just because of the timing of when those occurred. Selling, general, and administrative expense, Net loss per share attributable to common stockholders, basic and diluted, Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted, Prepaid expenses and other current assets, Accrued expenses and other current liabilities, Preferred Stock, $0.0001 par value; 20,000,000 shares authorized as of March31, 2022 and December31, 2021; zero shares issued and outstanding as of March31, 2022 and December31, 2021, respectively, Class A Common Stock, $0.0001 par value; 2,000,000,000 shares authorized as of March31, 2022 and December31, 2021; 92,264,946 and 49,016,511 shares issued and outstanding as of March31, 2022 and December31, 2021, respectively, Class B Common Stock, $0.0001 par value; 200,000,000 shares authorized as of March31, 2022 and December31, 2021; 56,155,776 and 98,036,009 shares issued and outstanding as of March31, 2022 and December31, 2021, respectively, Accumulated other comprehensive (loss) income, Total liabilities and stockholders equity. You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures in today's earnings release. I believe you said that most of the top-line impact was due to China versus Europe. On our last earnings call, we told you we were entering 2022 on a trajectory toward what we believe is the most compelling product road map in our history. Yeah. People are coming back to stores. Turning now to Q1 gross profit, which was up 26% to $33 million with gross margin at 51.9%, down 10 basis points to last year. But I think those dynamics I just laid out, we should be in a position where, as the laps do get easier to plan on the inventory side, we should start to see that come down. Sources: FactSet, Dow Jones, Bonds: Bond quotes are updated in real-time. As I'll mention later, we are bolstering this approach through third-party partnerships. Good afternoon. So it sounds like you're expecting roughly breakeven EBITDA during the back half of this year. First quarter 2022 gross profit increased 26% to $32.6 million compared to the first quarter of 2021, and first quarter 2022 gross margin was 51.9% compared to 52.0% in the first quarter of 2021. We took a more modest one last year in August. In the future, we may incur expenses similar to those for which adjustments are made in calculating adjusted EBITDA and adjusted EBITDA margin. We'll just close out with a couple of comments. Compared to 2020, this range represents growth of 48% to 56%. So I think that both helps the back half story, though the overall impact on the business is pretty small. This is our second price increase in the past several months with effectively no observable impact on overall demand. Again, early days. When we zoom out and look at the core elements that underpin our operating and value creation model, we have tremendous confidence that we're set up to win in the coming years. Can you give us some color on new versus repeat customers that are purchasing those new innovations? Bob Drbul -- Guggenheim Partners -- Analyst. The Tree Flyer has gone through extensive development and testing both in our innovation lab and on the road with countless iterations developed to perfect the shoe. Despite this, we believe our store and digital model of vertical retail is working there, particularly in our two focus regions in Europe being the U.K. and Germany. Your next comes from Bob Drbul with Guggenheim. "While we are adopting a more conservative near-term outlook in light of the transitory external headwinds affecting our international business, we expect to deliver strong full year revenue growth of 21% to 24% in 2022. So I'll start on the guidance point. So that architecture has now been established as we layer in new products like the Flyer as we're doing, that will fit into that architecture. Recreational running full of joy is on an upswing, driven by a new generation of runners who are running to stay healthy rather than to compete. Adjusted EBITDA and adjusted EBITDA margin should not be considered as an alternative to net loss and net loss margin or any other measure of financial performance calculated and presented in accordance with GAAP. Allbirds serves customers across 35 countries through 39 Allbirds stores and its e-commerce website, www.allbirds.com. Please go ahead. So that is -- so that's kind of like -- that's the high level. And the drivers behind that, again, are the product portfolio we have in place there, the retail -- having more retail stores on a year-over-year basis, that's going to certainly help the increase in the velocity of that omnichannel flywheel that we continue to see. So we have really no tier 1 facilities operating in that country to manufacture footwear. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our first quarter 2022 and 2021 results included in this press release. Underpinning this outlook is our confidence in the purpose-driven lifestyle brand and durable operating model we have built, setting us up for decades of strong growth and profitability despite these short-term factors. And then on your gross margin question, Dana, you go back the way I kind of walked through and unpacked the two factors versus our prior gross margin guidance. There's been quite a bit of inflation since the IPO. All Rights Reserved. 3PL . We are pleased to deliver strong first quarter results, which includes robust net revenue growth of 26% compared to 2021 and 49% versus 2020, along with adjusted EBITDA in line with our expectations. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Those have performed really, really well. Revenue grew 23% to $97.2 million from $79.3 million a year earlier, topping estimates for $91.8 million. And we've seen this historically in international markets. I do think there's more inflation than when we were on the road show last summer. Carmen, I think we have time for one more question. In addition, recall that the 2022 target includes an estimated $8 million of public company costs. I'm just curious -- has the amount of inflation change -- that's changed, has it changed the way you're thinking about long-term gross margin potential? And I think -- and thank you very much for the well wishes. Can you just walk me through what exactly that means? And then to Joey's point, the thoughtfulness with which we're launching new products, launching in different categories, the higher margin we get from those products. The year-over-year increase is attributable to a combination of higher in-transit inventory as a result of extended lead times from ongoing supply chain disruptions, as well as the impact of higher inbound freight costs. We define adjusted EBITDA as net loss before stock-based compensation expense, including common stock warrant expense, depreciation and amortization, other expense, interest expense, and income tax provision. And the other factor then was the impact of FX. This press release and the accompanying financial tables include references to adjusted EBITDA and adjusted EBITDA margin, non-GAAP financial measures. Allbirds is not just distinguished by materials and product innovation that Tim spoke to, but also our modern vertically led omnichannel strategy. I'll touch on the price piece of it, then Joey, if you want to add anything on the sort of broader competitive landscape. You'll hear more from us in the subsequent months. Yeah. And again, Mike touched on earlier that these are just really nice awareness boost and great catalysts for growth in this another consumer touch point. Yeah. And we sit here today at greater than 99% being conducted in this manner. Thanks, Joey, and hello to everyone. We define adjusted EBITDA margin as adjusted EBITDA divided by net revenue. Calculated by Time-Weighted Return since 2002. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. A Division of NBCUniversal. So we're not giving sort of formal guidance on what we expect to happen with inventory over the course of the year. Now it's 250 to 300 basis points. Of course, if you look at specific geographies, there is variance across those. So it's all about how the lease dynamics play, how the halo across omnichannel impacts the go-to-market strategy in each region. And does some of the stuff that you're seeing in the international markets change your desire or willingness to open stores in international markets? And then the fact that third-party will certainly kind of help with that as well as we go through back half of the year. Are you being impacted by any of the lockdowns in China or in other regions right now? Sources: FactSet, Tullett Prebon, Commodities & Futures: Futures prices are delayed at least 10 minutes as per exchange requirements. And so as a result of that, we don't see much impact to our supply chain in terms of these recent restrictions in that region. But I think a business even our size, there are levers we can certainly pull as we balance that top and bottom line and get to the responsible growth we've talked about. While midsoles are usually made from petroleum and logan at 100% synthetic, SweetFoam leverages plant-based oils, enabling a 20% reduction in carbon footprint versus petroleum-based synthetic alternatives. Last week, Allbirds announced the debut of its own resale platform, Allbirds ReRun, which it anticipates will lead to more repeat business and brand loyalty. First, our latest collaboration with adidas dropped in early April to a phenomenal consumer response. And I think in performance and in the flyer, I think, is a great example of us executing that at a very high level.All right. Got it. We're continuing to see that trend really positively. Please also note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise any statements to reflect changes that occur after this call. Thanks a lot. Yes, about two-thirds of the impact is due to Ukraine crisis and China's COVID restrictions and one-third due to FX rates. SG&A deleveraged in the quarter. 3. That's what gives us confidence around the medium-term targets. We don't have to get all of that back, but we get part of that back over the next few years. With the product assortment we have now and the exciting pipeline to come, we believe this is an incredible foundation where we can now layer in select third-party distribution. And I think the second one is similar around. Data are provided 'as is' for informational purposes only and are not intended for trading purposes. We use cookies and browser capability checks to help us deliver our online services, including to learn if you enabled Flash for video or ad blocking. Our U.S. business continues to show strength in both digital and physical retail. And that's always our -- how we think about the balance on the product pipeline. And finally, one last model housekeeping note. To find out more about our data sharing policy, please read ourterms of useandprivacy policy. And if you look at the impact on the invasion in Ukraine, we saw that happen kind of for the bulk of it in March so far, and that continued to extend into April and to today. In lifestyle, our core tree franchises have shown great performance heading into the spring and summer months. Without naming specific businesses, Allbirds said it plans to branch further into wholesale by selling through third parties. Here's how Allbirds did in its fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv: Its net loss for the three-month period ended Dec. 31 widened to $10.7 million, or 9 cents a share, from a loss of $9.4 million, or 18 cents per share, a year earlier. The first is on how you guys talked about the second quarter guidance in the press release, it says that you expect the majority of the kind of downward version from the full year to be in the second quarter. Mike, maybe you could talk to the flow of inventory as the year goes on. Thank you. We may not actually achieve the plans, intentions or expectations disclosed in or expressed by, and you should not place undue reliance on our forward-looking statements. We have a clear path to hit this target through growth in our gross margin accretive retail international businesses, our strong pricing power, the continued introduction of new higher-margin products, and the easing of at least a portion of the 450 to 500 basis points of logistics cost headwinds we have faced over the past two years. So I think all of that is the biggest thing that kind of gives us factor or gives us confidence. So it doesn't change our perspective on 2022 on the store target. I think, demand-wise, clearly, we're going to be in a position where we're going to continue to sell through the product we have, balance that with the new product launches. We believe these to be transitory impacts on our business in China, but we are preparing for extended restrictions of varying severity through the remainder of 2022. And finally, the headline this week is the launch of the Tree Flyer, our third performance shoe and our latest best-performing, and most visually bold design yet. Maybe one more quick one is just on your inventory composition. [Operator instructions] Your first question is from Matthew Boss with J.P. Morgan. Back in 2016, Time Magazine named Allbirds one the world's most comfortable shoe. The decrease in marketing expense as a percentage of revenue is primarily due to increased marketing efficiency in our digital channels. 6. And we're trying to be dynamic and be rightsized for each of the regions that we play in. And then I would just say maybe I'll hand it over to Tim in a minute for some highlights on what we've done in the past quarter, over the past few months in terms of brand awareness. With that, Mike will review the financials and discuss our outlook in greater detail. Looking at our updated 2022 adjusted EBITDA guidance target of negative $25 million to negative $21 million, I'll just note that we have tightened our balance of year SG&A spending to partially offset the impact of the external headwinds. I mean, the big -- the two big X factors there are certainly the length of time of in-transit inventory. Now I'll turn the call over to Joey to begin the formal remarks. I recognize there's a lot of newness in the store fleet, but can you speak to trends you're seeing in urban versus more suburban or smaller market locations? When we look at gross margin, our track record of improvement gives us confidence in getting to 60% plus gross margin in our direct vertical channels. As you think about the price increases that you've taken so far, are you anticipating any additional price increases as we go through the balance of the year? Specifically, we estimate a total of 420 basis points of year-over-year headwinds spread across three factors: one, macro-driven logistics and distribution center cost headwinds were an estimated 350 basis points year over year. Your next question comes from Tom Nikic with Wedbush. And then maybe just one follow-up on the margin front. Again, the growth in the gross margin accretive retail and international businesses. In Europe, Russia's invasion of Ukraine and the resulting humanitarian crisis has had an indirect influence on our business via the impact of inflation on the psyche of the European consumer and petroleum prices. To be transparent about how we define cautious outlook, our guidance targets assume that the Ukraine crisis and its ripple effects, the impact of COVID restrictions on our China business, and unfavorable FX rates all will continue to some degree through the balance of 2022. You know our model well. So looking forward to working with you and the team a little bit more going forward. The Allbirds story began with superfine New Zealand merino wool and has since evolved to include a eucalyptus tree fiber knit fabric and a sugarcane-based EVA foam (SweetFoam). Joey discussed the regions and channels, so I'll just add some color on the other drivers of the 26% net revenue growth in the quarter. And then if that has any impact then on the actual kind of shipping cost itself, I think those are the first two big factors. Since that time, we've continued to deliver innovation, and this year, TIME honors again by naming us to their prestigious list of the TIME 100 Most Influential Companies of 2022, specifically calling out our work in the performance category. Our people in Shanghai are directly affected from this, and yet we know that these things will pass, and we focus on what we can control right now. designed to perform equally well on a first run, on race day, or anything in between. A strong testament to Allbirds' commitment to sustainable innovation and relentless improvement while continuing to tap into the design white space of reductive design to provide style versatility for even the best runners. Please go ahead. It's up 70% year over year, it was up 80% in the fourth quarter. I'll start on that, Mark, and then turn it to Joey to talk a little about the consumer because the short answer is, no, we haven't seen any sort of drop off in our expectation in the U.S. We feel really great about that 35% growth that we saw. And then as we ramp up on third party, that's certainly going to drive awareness for us with no incremental marketing spend. By using our website or by closing this message box, you agree to our use of browser capability checks, and to our use of cookies as described in our Cookie Policy. At the same time, certain international regions have run into demand headwinds toward the end of the first quarter and have extended into Q2, particularly in China and the EU. Jim Duffy -- Stifel Financial Corp. -- Analyst. With the product engine humming, this distribution model of the future sets us up to hit a milestone of $1 billion in lifetime sales in the second quarter. SAN FRANCISCO, May 10, 2022 (GLOBE NEWSWIRE) -- Allbirds, Inc. (NASDAQ: BIRD), a global lifestyle brand that innovates with naturally derived materials to make better footwear and apparel products in a better way, today reported financial results for the first quarter of 2022 ended March 31, 2022. So we feel good that we'll continue to get leverage on that line. Data may be intentionally delayed pursuant to supplier requirements. I guess what control do you have in your confidence level there? I also think we've taken more price. And lastly, I'd say, as people get out and about and activity picks up, as travel picks up, we have the product that people want. So to your point, in the back part of the year, we were at 51.9% in Q1. And again, that speaks to some of our confidence despite ongoing restrictions in international markets that we think there's going to be some pickup in the back half. Encourage everyone to get their hands on a pair of Flyers on May 17 when we launch those, and that's just a good starting point for us and what we have on the road map coming forward. Recall that we estimate the impact of these external headwinds was 200 basis points in 2021, so we are now looking at a total of 450 to 500 basis points of impact over a two-year period. I will hand back to you for closing remarks. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. So we're really just heads down and focused on our business and making sure we manage our inventory to a really clean position and keep using that as a great lever. Making the world smarter, happier, and richer. Source: FactSet, Indexes: Index quotes may be real-time or delayed as per exchange requirements; refer to time stamps for information on any delays. The flyer is a huge step forward for Allbirds in the performance team, and they've managed to do it with mostly sustainable materials and a low carbon footprint, which is a feat in itself. Finally, we are committed to profitable and responsible growth through a disciplined approach to SG&A balancing the top and bottom lines. Thanks, Tim. Adjusted EBITDA and adjusted EBITDA margin facilitate internal comparisons of our historical operating performance on a more consistent basis, and we also use them for our business planning purposes. Importantly, we remain confident that our digital-savvy, omni-channel operating model will support continued growth and enable us to create meaningful value for our shareholders in the years ahead., Q1 2022 Financial and Operating Highlights. This program also reaffirms our core brand promise by delivering on circularity in addition to our innovation work on natural materials. We believe this is the prudent approach because we are facing the strongest headwinds in our gross margin accretive international business. This press release and related conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on managements beliefs and assumptions and on information currently available to management. Now I'll turn it back to Joey to cover our remaining two growth drivers of stores and international. Two questions for me. Consumer insights support this today. But that said, I would say it's kind of broad-based, just an impact of the consumer based on incredibly high gas prices, what that does to the psyche of the consumer. And that's an advantage a lot of others don't have. So some of that impact and that pricing change will flow through new products as well. And as we're doing that, not only good awareness lift, but also good awareness lift in the right vector. , Discounted offers are only available to new members. Allbirds said it experienced effectively no drop off in consumer demand after it made minor price increases last year, giving it the confidence to do so again in 2022. So as we think about the new fiscal year guidance relative to the past, it implies second-half sales growth and acceleration, I think, up to the mid-20s or low 20s CAGR. Further information on these risks and other factors that could cause our financial results, performance, and achievements to differ materially from any results, performance, or achievements anticipated, expressed, or implied by these forward-looking statements is included in the filings we make with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and future reports we may file with the SEC from time to time. Allbirds has attributed its revenue increase to "strong" consumer demand in the United States, although growth was negatively impacted by external headwinds, including COVID-19 restrictions in China, Russias invasion of Ukraine in Europe, and a strengthening U.S. dollar in some international markets. First quarter 2022 net revenue in the United States increased 35% to $48.9 million compared to the first quarter of 2021. My next question is just a follow-up on the long-term gross margin outlook. We believe our premium brand positioning and product quality enable us to maintain this pricing architecture that premium brands like Allbirds will come out of this period much stronger by taking stock of the current inflationary environment and thoughtfully revising their pricing architectures. That obviously has a lot of benefits for Allbirds. Source: FactSet, Markets Diary: Data on U.S. Overview page represent trading in all U.S. markets and updates until 8 p.m. See Closing Diaries table for 4 p.m. closing data. The mix of elite runners in the sport is declining. Like I said in the comments on the call, Matt, this is now the second price increase we took. We are incredibly excited about this launch, and as our first high-performance product expected to meaningfully increase our credibility in this category. The performance of our U.S. business, particularly the omnichannel flywheel that's accelerating with the broader U.S. retail recovery, our conviction that our international business will return to its historical growth rates once the external headwinds pass and the potential for third party to be a significant lever of EBITDA accretive growth. Historically, you've kind of had this sort of, I guess, head and shoulders kind of thing, where you saw seasonal spikes in Q2 and Q3. By clicking 'Get the Newsletter' below, you agree to receive the newsletter & marketing communications from theindustry.fashion. Sources: FactSet, Dow Jones, ETF Movers: Includes ETFs & ETNs with volume of at least 50,000. I'd go back to the comments I gave about the top line kind of basically getting into the media -- the middle part of our medium-term range of 20% to 30%. 20 Until we have more certainty around the length and severity of the external headwinds, we are incorporating a more cautious outlook into our updated 2022 guidance targets, particularly in the second quarter. We'll take our final question from Ashley Helgans at Jefferies. Excluding the impact of FX rates, full year international net revenue is targeted to grow in the low teens. The bigger driver here is less demand from international. And then just on the third-party distribution cost to get that up and running, any way that we should think about how we should think about that? And then lastly, we are going to continue to have a little bit more on the third-party side.
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