Financial Data and Key Metrics Changes - Warby Parker reported Q3 2024 net revenue of $192.4 million, reflecting a 13.3% year-over-year growth and a 250 basis points adjusted EBITDA margin expansion, the highest of the year [6][41] - Adjusted EBITDA for Q3 was $17.3 million, representing an adjusted EBITDA margin of 9%, compared to $11 million or 6.5% in the same period last year [41] - The company ended Q3 with approximately $251 million in cash and generated $13 million in free cash flow, marking the sixth consecutive quarter of positive free cash flow [42] Business Line Data and Key Metrics Changes - Retail revenue increased approximately 20% year-over-year, while e-commerce revenue grew by about 1% [31][22] - The glasses business grew approximately 10% year-over-year, driven by marketing investments and product innovation [14] - Contact lens sales grew approximately 35% year-over-year, accounting for almost 11% of total revenue, while eye exam revenue increased approximately 40% year-over-year, making up over 5% of revenue [27][28] Market Data and Key Metrics Changes - The company ended Q3 with 2.4 million active customers, a 5.6% increase on a trailing 12-month basis, with average revenue per customer growing by 7.5% to $305 [8][36] - Retail represented 70% of overall business, up from 67% in Q3 2023 [35] - The company opened 13 new stores in Q3, bringing the total to 269 stores, with plans to expand to over 900 stores in the long term [22][32] Company Strategy and Development Direction - Warby Parker is focused on expanding its omni-channel experience, leveraging both retail and e-commerce to drive growth [20] - The company aims to scale holistic vision care, with a strategic emphasis on increasing eye exam capabilities and contact lens sales [28][29] - The management is optimistic about the potential of smart glasses and plans to leverage advancements in AI to enhance customer engagement [55][57] Management's Comments on Operating Environment and Future Outlook - Management noted sequential momentum in customer growth and e-commerce velocity, with expectations for Q4 to be the strongest for active customer growth [50][64] - The company raised its full-year guidance, expecting revenue between $765 million and $768 million, representing approximately 14% to 15% year-over-year growth [43] - Management expressed confidence in maintaining gross margin stability in the mid-50s percentage range despite challenges from increased hiring and new store openings [44][68] Other Important Information - The company has expanded its in-network insurance relationships, notably with Versant Health, which is expected to provide long-term revenue growth opportunities [12][77] - Warby Parker's marketing spend increased to 12.3% of revenue in Q3, reflecting a disciplined approach to customer acquisition [40][52] Q&A Session Summary Question: Can you elaborate on the drivers of sequential momentum and marketing efficiency? - Management observed sequential strength building since July, attributing it to disciplined marketing efforts and active customer growth [49][50] Question: How do you view the impact of tariffs and the opportunity for smart glasses? - Management has reduced exposure to Chinese goods and is confident in managing current tariff challenges. They are excited about the potential of smart glasses, particularly with advancements in AI [54][55] Question: What are the long-term implications of hiring optometrists on gross margin? - Hiring optometrists is viewed as a strategic investment to enhance customer acquisition, with expectations for gross margin to remain stable in the mid-50s [60][61] Question: How is the e-commerce channel performing and what are the expectations for 2025? - E-commerce is showing positive momentum, with expectations for growth as the company continues to enhance customer experience and marketing efforts [73][70] Question: What strategies are in place to raise awareness of in-network options? - The company focuses on training staff and partnering with insurance carriers to increase awareness of in-network benefits [80][81]

Core Insights - Warby Parker Inc. reported revenue of $192.45 million for the quarter ended September 2024, reflecting a year-over-year increase of 13.3% [1] - The company's EPS was $0.05, an improvement from $0.01 in the same quarter last year [1] - Revenue exceeded the Zacks Consensus Estimate of $189.45 million by 1.58%, while EPS met the consensus estimate [1] Financial Metrics - Active Customers reached 2.43 million, slightly above the average estimate of 2.42 million from four analysts [3] - Average Revenue per Customer was $305, which fell short of the estimated $307.31 [3] - The Store Count at the end of the period was 269, surpassing the average estimate of 267 [3] Stock Performance - Warby Parker's shares have increased by 20.1% over the past month, compared to a 3.2% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Performance - For the three months ended September 30, 2024, the company generated net revenue of $192.4 million, an increase of 13.3% from $169.8 million in the same period of 2023[106]. - The gross profit for the three months ended September 30, 2024, was $104.9 million, resulting in a gross profit margin of 54.5%, slightly down from 54.6% in the prior year[106]. - The company reported a net loss of $4.1 million for the three months ended September 30, 2024, compared to a net loss of $17.4 million in the same period of 2023, indicating improved financial performance[106]. - Adjusted EBITDA for the three months ended September 30, 2024, was $17.3 million, up from $11.0 million in the same period of 2023, reflecting a margin increase to 9.0% from 6.5%[106][112]. - For the nine months ended September 30, 2024, net revenue reached $580.7 million, a 14.3% increase from $507.9 million in the same period of 2023[107]. - The gross profit for the nine months ended September 30, 2024, was $323.7 million, with a gross profit margin of 55.7%, up from 54.8% in the prior year[107]. - Net revenue for the three months ended September 30, 2024, was $192.4 million, an increase of $22.6 million or 13.3% compared to $169.8 million in the same period of 2023[133]. - Average Revenue per Customer increased to $305 from $284 year-over-year, driven by strong adoption of higher-priced products and bundling promotions[133]. - Active Customers grew by 5.6% compared to the prior year, contributing to the revenue increase[133]. - Net revenue increased by $72.8 million, or 14.3%, for the nine months ended September 30, 2024, compared to the same period in 2023, driven by an increase in Average Revenue per Customer to $305 from $284[142]. Cost and Expenses - Cost of goods sold increased by $10.5 million or 13.6% to $87.6 million, while gross profit rose by $12.1 million or 13.1% to $104.9 million[135]. - Gross margin slightly decreased by 10 basis points to 54.5% for the three months ended September 30, 2024, primarily due to lower-margin sales growth in contact lenses[137]. - Selling, general, and administrative expenses (SG&A) for the three months ended September 30, 2024, were $111.5 million, compared to $112.5 million in the same period of 2023[124]. - Selling, general, and administrative expenses decreased by $1.0 million, or 0.9%, for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to a $5.5 million decrease in stock-based compensation[138]. - Cost of goods sold increased by $27.2 million, or 11.8%, for the nine months ended September 30, 2024, but decreased as a percentage of revenue by 90 basis points, from 45.2% to 44.3%[143]. - Gross profit increased by $45.6 million, or 16.4%, for the nine months ended September 30, 2024, primarily due to the increase in net revenue[144]. Customer and Market Growth - The company had 2,431 active customers as of September 30, 2024, compared to 2,303 in the same period of 2023, indicating a growth in customer base[112]. - The total number of retail stores increased to 269 as of September 30, 2024, up from 227 in the previous year, enhancing market presence[112]. - The number of stores offering eye exams increased from 183 to 228 year-over-year, contributing to operational growth[137]. Cash Flow and Liquidity - As of September 30, 2024, the company had cash and cash equivalents of $251.0 million, up from $216.9 million as of December 31, 2023[152]. - Net cash provided by operating activities for the nine months ended September 30, 2024, was $78.8 million, compared to $47.3 million for the same period in 2023[160][161]. - Net cash used in investing activities for the nine months ended September 30, 2024, was $48.3 million, an increase from $41.1 million in the same period of 2023[162][165]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $3.8 million, up from $2.1 million in 2023[166]. - The company experienced a net increase in cash and cash equivalents of $34.1 million for the nine months ended September 30, 2024, compared to $7.4 million in 2023[163]. Debt and Financial Obligations - The 2024 Credit Facility consists of a $120.0 million five-year revolving credit facility, with an option to increase the amount by up to $55.0 million[156]. - The company is subject to a maximum consolidated senior net leverage ratio of 3:1 under its 2024 Credit Facility, applicable when total borrowings exceed $30.0 million[159]. Internal Controls and Compliance - Material weaknesses in internal controls were identified, specifically in IT general controls and financial reporting processes[180]. - The company has invested significantly in IT improvements and added resources to address identified material weaknesses[181]. - Key remediation measures include implementing a market-leading ERP system to enhance error prevention and detection[181]. - Expert SOX consultants have been engaged to assist in the development and testing of the control environment[181]. - Training sessions for control owners have been conducted to improve control design and execution[181]. - The company has incurred significant costs related to remediation efforts and anticipates additional time and expenses[181]. - There were no changes in internal control over financial reporting during the quarter ended September 30, 2024, that materially affected controls[184]. - The company cannot assure that current measures will fully remediate control deficiencies or prevent future weaknesses[182]. - Future changes in business conditions may render current controls inadequate[183]. - Any failure to maintain effective controls could harm operating results or lead to restatements of financial statements[183]. - The company continues to hire qualified accounting and financial reporting personnel with public company SOX experience[181]. Future Outlook - The company expects operating losses to continue in the foreseeable future as it invests in business expansion[153]. - Seasonal trends may cause fluctuations in quarterly results, impacting the predictability of business and operating results[151]. - The company expects fluctuations in cost of goods sold as a percentage of net revenue due to product mix and demand changes[128]. - The company does not believe that foreign exchange rates have a material effect on its business, financial condition, or results of operations[173].

Core Insights - Warby Parker Inc. reported quarterly earnings of $0.05 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.01 per share a year ago [1] - The company achieved revenues of $192.45 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 1.58% and up from $169.85 million year-over-year [2] - Warby Parker shares have increased approximately 34.5% year-to-date, outperforming the S&P 500's gain of 24.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $183.08 million, and for the current fiscal year, it is $0.26 on revenues of $760.76 million [7] - The estimate revisions trend for Warby Parker is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Medical - Products industry, to which Warby Parker belongs, is currently in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Growth - Net revenue increased 13.3% year over year to $192.4 million, up $22.6 million from the prior year period[4] - For the full year 2024, the company raised its revenue guidance to $765 to $768 million, representing growth of approximately 14% to 15% versus full year 2023[12] - Total net revenue for the three months ended September 30, 2024, was $192,447,000, representing a 13.3% increase from $169,849,000 in the same period of 2023[34] Customer Metrics - Active Customers increased 5.6% to 2.43 million on a trailing 12-month basis, while Average Revenue per Customer increased 7.5% to $305[4] Profitability and Loss - GAAP net loss improved by $13.3 million to $4.1 million, primarily due to leveraging the expense base on higher revenue[9] - The company reported a net loss of $4,072,000 for the three months ended September 30, 2024, compared to a net loss of $17,413,000 for the same period in 2023, reflecting a significant improvement[34] EBITDA Performance - Adjusted EBITDA increased $6.3 million to $17.3 million, with an Adjusted EBITDA Margin of 9.0%, up 2.5 points[10] - Adjusted EBITDA for 2024 is projected to be approximately $73 million at the midpoint of the revenue range, based on an Adjusted EBITDA Margin of 9.5%[12] - Adjusted EBITDA for the three months ended September 30, 2024, was $17,308,000, with an adjusted EBITDA margin of 9.0%[38] Cash Flow - Free Cash Flow for the quarter was $13.1 million, with net cash provided by operating activities of $27.3 million[4] - The company experienced a net cash provided by operating activities of $78,832,000 for the nine months ended September 30, 2024, compared to $47,326,000 in the same period of 2023, an increase of 66.6%[36] - Net cash provided by operating activities for the three months ended September 30, 2024, was $27,282 thousand, an increase from $19,931 thousand in the same period last year[43] - Free cash flow for the three months ended September 30, 2024, was $13,059 thousand, compared to $4,443 thousand in the prior year[43] Expenses - Selling, general, and administrative expenses (SG&A) were $111.5 million, representing 57.9% of revenue, down from 66.2% in the prior year[8] - Selling, general, and administrative expenses for the three months ended September 30, 2024, were $111,480 thousand, accounting for 57.9% of revenue, compared to 66.2% in the same period last year[41] - Selling, general, and administrative expenses for the nine months ended September 30, 2024, were $344,404 thousand, which is 59.3% of revenue, down from 64.7% in the previous year[41] - The adjusted selling, general, and administrative expenses for the nine months ended September 30, 2024, were $302,166 thousand, reflecting a decrease from $267,261 thousand in the same period last year[43] Asset and Equity Growth - Cash and cash equivalents increased to $251,032,000 as of September 30, 2024, from $216,894,000 at the end of 2023, marking a growth of 15.7%[36] - Total assets rose to $637,990,000 as of September 30, 2024, compared to $580,312,000 at the end of 2023, an increase of 9.9%[32] - The company’s total stockholders' equity increased to $336,750,000 as of September 30, 2024, up from $301,787,000 at the end of 2023, representing an increase of 11.6%[32] Inventory and Cost of Goods Sold - Inventory decreased to $52,766,000 as of September 30, 2024, from $62,234,000 at the end of 2023, a reduction of 15.2%[34] - Cost of goods sold for the three months ended September 30, 2024, was $87,580 thousand, compared to $77,117 thousand for the same period in 2023, representing an increase of 6.4%[41] - The company reported a total of $256,964 thousand in cost of goods sold for the nine months ended September 30, 2024, compared to $229,752 thousand for the same period in 2023, indicating a year-over-year increase of 11.9%[41] Gross Profit and Margin - Gross margin was 54.5%, slightly down from 54.6% in the prior year, primarily due to sales growth of contact lenses and increased doctor headcount[7] - Gross profit for the three months ended September 30, 2024, was $104,867 thousand, with a gross margin of 54.5%, slightly down from 54.6% in the prior year[41] - Adjusted gross profit for the three months ended September 30, 2024, was $105,148 thousand, reflecting a gross margin of 54.6%[43] Store Expansion - Opened 13 net new stores during the quarter, ending Q3 with a total of 269 stores[5] Strategic Initiatives - The company has implemented new strategies including stock-based compensation adjustments and ERP system implementation costs, impacting overall expenses[43]

Core Insights - Goldman Sachs analyst Brooke Roach revised ratings on Warby Parker Inc. and Canada Goose Holdings Inc. ahead of their third-quarter earnings, noting fluctuating trends in the apparel sector as summer transitions to early fall [1][2] - Despite volatility expected for the remainder of 2024, early indicators such as falling gas prices and increased consumer discretionary cash flow suggest a more positive outlook for 2025 [1] Warby Parker Inc. (WRBY) - The stock rating was upgraded to Buy from Neutral, with the price target raised to $18 from $15, driven by promising tailwinds including expansion of insurance partnerships, growth in the vision care market, and increasing active customer numbers [2] - Improved gross profit rates from stronger glasses sales and cost-efficiency efforts in stores are expected to enhance fundamentals [2] Canada Goose Holdings Inc. (GOOS) - The stock rating was downgraded to Sell from Neutral, with the price target lowered to $9 from $11.5, reflecting a less appealing risk/reward profile compared to peers in the apparel sector [2][3] - The bearish outlook is attributed to heightened competition, normalizing brand momentum, a slowing global luxury market, and a volatile macroeconomic environment in China [3] - Despite the downgrade, there is optimism regarding strategic initiatives such as product capsules from the new creative director and improved retail execution [3] Market Context - Key factors to monitor include the upcoming U.S. elections and their implications for tariffs and geopolitical risks, a shortened holiday season, and challenges from early fall weather [2]

Eyewear stock Warby Parker Inc (NYSE:WRBY) is on the rise today, after an upgrade from Goldman Sachs to "buy" from "neutral," with a price-target hike to $18 from $15. The analyst in coverage cited strong margin growth and improving fundamentals in comparison to its competitors. At last glance, WRBY was up 3.5% to trade at $17.13, heading for its highest close since early June. Today's pop also has the equity jumping above recent pressure at $16.50. Year to date, the stock is up over 20%. Of the 15 analysts ...

The shares of eyeglasses retailer Warby Parker Inc (NYSE:WRBY) sport a 6.9% pre-market lead, after a bull note from JMP Securities. The analyst upgraded WRBY to "outperform" from "market perform" and set a $20 price target, citing management's constructive commentary as a catalyst for potential growth in upcoming quarters. In addition, Piper Sandler assumed coverage with an "overweigh" rating and $18 price objective. There's room for more bull notes to roll in, with eight of 13 covering brokerages still rec ...

Warby Parker Inc. (WRBY) reported $188.22 million in revenue for the quarter ended June 2024, representing a year-over-year increase of 13.3%. EPS of $0.06 for the same period compares to $0.04 a year ago. The reported revenue represents a surprise of +0.71% over the Zacks Consensus Estimate of $186.89 million. With the consensus EPS estimate being $0.05, the EPS surprise was +20.00%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to ...

Warby Parker Inc. (WRBY) came out with quarterly earnings of $0.06 per share, beating the Zacks Consensus Estimate of $0.05 per share. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 20%. A quarter ago, it was expected that this company would post earnings of $0.07 per share when it actually produced earnings of $0.08, delivering a surprise of 14.29%. Over the last four quarters, the company ...