Banking

Sustainable Shoe Maker Allbirds Files For IPO

The Allbirds IPO filing revealed the maker of sustainably sourced casual shoes expects losses for the “foreseeable future,” though it enjoys a cult following and plenty of Instagram juice.




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Allbirds applied to list its Class A common shares on the Nasdaq Tuesday and will trade under the ticker BIRD.

Founded in 2015, Allbirds bills itself as is a global lifestyle brand that innovates with naturally derived materials. The company became an Instagram darling during Covid-19. Sales of its trademark wool-top and foam-bottom sneakers have gained traction during the pandemic, as folks, especially environmentally conscious younger people, opt for a more casual wardrobe.

Allbirds is counting on the casual trend to continue even after the migration back to the office. The company cites a recent survey by payment firm Klarna that shows that nearly half of American workers are planning to wear more comfortable clothes to work than they did before the pandemic.

“As workplaces continue to move towards a more casual and/or remote environment, we believe consumers will place more value on versatility and comfort,” the company said.

Losses To Weigh On Allbirds IPO

But despite increasing sales, Allbirds has yet to turn a profit.

“We have incurred significant net losses since inception, and anticipate that we will continue to incur losses for the foreseeable future,” according to the Allbirds IPO filing.

Its net loss totaled $25.9 million in 2020, up from $14.5 million in 2019. For the six-month period ended June 30, Allbirds reported a loss of $21.1 million.

The loses come as revenue has grown to $219.3 million in 2020 from $193.7 million in 2019. For the six-month period ended June 30, revenue was $117.5 million. Digital sales totaled $194.6 million, accounting for 89% of Allbirds sales last year.

Still, Allbirds has expansion plans and hopes to become a major player in the $366 billion global footwear market. The company is joining other popular brands like Nike (NKE) and Hoka in making a big push in direct-to-consumer sales.

As of June 30, 2021, Allbirds operated 27 retail stores in eight countries. It said it expects to “significantly increase the total number of stores we operate over the next few years, domestically and internationally.”

Hoka, known for its amply cushioned soles, opened its first stores in New York and California on Wednesday. Its parent, Deckers (DECK), reported 95% year-over-year sales growth in its latest quarter.

Shoe Stocks

The Allbirds IPO comes as shoe stocks have been on a good run so far this year. The IBD shoes industry group is up 47%.

However, Deckers shares were down 0.6% to 419.21 on the stock market today. DECK stock raced to a 52-week high of 444.48 after the company crushed earnings estimates last quarter, according to MarketSmith chart analysis.

Sports apparel giant Nike fell 1.6% to 165.05. NKE stock is taking a breather after gapping up 15% after beating earnings last quarter and sprinting to a 52-week high of 174.38 on Aug. 6.

Skechers (SKX) fell 2.3%, dipping below its 50-day line.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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