Allbirds shares dive after warning
AUCKLAND: Allbirds, cofounded by New Zealander Tim Brown, posted a betterthanexpected June quarter result but its Nasdaqlisted shares dived after it warned the costofliving crisis was finally catching up with its customers.
The sustainable footwear maker slashed its forecast for the rest of the year on the back of the consumer spending slowdown and said it was cutting 8% of its workforce.
Allbirds shares were down 19.22% at $US4.58 ($NZ7.28) in late Nasdaq trading.
The company reported revenue increased 15% to $US78 million for the three months to June 30 and a net loss that widened to $US29.4 million from last year’s $US7.6 million. Both numbers were slightly ahead of expectations.
The San Franciscobased firm said it had noticed a decline in consumer spending towards the end of the quarter.
‘‘Our teams were quick to detect the broader slowdown in US consumer discretionary spending in the back half of June, and responded with agility,’’ cochief executive Joey Zwillinger said
The company also reduced the global corporate workforce by about 8%, Mr Zwillinger added. It would also reduce office space, and seek savings in logistics and distribution.
Mr Zwillinger said on a conference call: ‘‘Since our May earnings call, persistently high inflation has started to take its toll on consumers. Across our industry, elevated inventory and promotional levels have begun to impact digital and retail traffic trends.’’
He added: ‘‘Our customer tends to have higherthanaverage income and hence there was a lag on the impact of inflation, but this trend became notable in the US.’’
Allbirds lowered fullyear revenue guidance to between $US305 million and $US315 million from the previous $US335 million$US345 million.
And it is now guiding to an adjusted ebitda loss of $US37.5 million to $US42.5 million, compared with a prior forecast for a loss of $US21 million$US25 million.
The slowdown in consumer spending is a fresh problem for Allbirds, which was already facing the same pandemic logistical issues as its peers, plus a backlash from some American investors over socalled ‘‘woke capitalism’’.
‘‘I think some of the criticism of ESG [environmental and social governance] is, quite frankly, wellfounded,’’ Mr Brown said in June.
But he also saw the discussion as an opportunity to underline
Allbirds’ ESG policies, which he said were clear and remained a selling point.
There was brighter news for another Nasdaqlisted business run by a New Zealander. Peter Beck’s Rocket Lab earned a positive writeup in the Wall Street Journal’s ‘‘Heard on the Street’’ column.
The paper praised Rocket Lab’s logistical and financial performance, and said it should benefit further from a rise in US defence and aerospace spending with Russia’s Soyuz off the table .
It said Rocket Lab revenue rose 124% to $US41 million in the firstquarter (with a pipeline of $US550 million of orders), and says its ‘‘responsive launch’’ capability was genuine.
‘‘Shortly after Russia’s invasion of Ukraine, satelliteintelligence firm BlackSky asked Rocket Lab for an orbit change just days before it was due to launch, in order to place its satellites more directly over the conflict zone. While changing such missions has traditionally taken months, Rocket Lab pulled it off in 45 days,’’ the WSJ said.
So why have Rocket Lab’s shares been languishing? Yesterday the stock closed flat at $US5.44 for a $US2.5 billion market cap. It listed in August last year at $US10.00.
The Journal said people looked down their noses at firms that went public via a special purpose acquisition corporation (SPAC), a vehicle for reverselisting.
It saw the New ZealanderAmerican firm being unfairly lumped in with other aerospace companies that went public through SPACs, most of which were essentially prerevenue.
‘‘When investors finally come around to discriminating between former SPACs, they may realise that Rocket Lab has long achieved escape velocity.’’ — The