WRBY Q3 Deep Dive: Revenue Miss and Guidance Reduction Amid Changing Consumer Trends

Core Insights - Warby Parker's Q3 CY2025 revenue of $221.7 million represented a 15.2% year-on-year growth but fell short of market expectations by 1.2% [1][5] - The company's full-year revenue guidance was revised down to $872.5 million, which is 1.5% below analysts' estimates [1][5] - GAAP profit per share was $0.05, aligning with analysts' consensus [1][5] Financial Performance - Revenue: $221.7 million vs analyst estimates of $224.3 million, reflecting a 15.2% year-on-year growth and a 1.2% miss [5] - EPS (GAAP): $0.05, in line with analyst estimates [5] - Adjusted EBITDA: $25.75 million, exceeding analyst estimates of $25.04 million, with an 11.6% margin [5] - Operating Margin improved to 1.6%, up from -3.4% in the same quarter last year [5] - Active Customers reached 2.66 million, an increase of 230,000 year on year [5] - Number of Locations increased to 313 from 269 in the same quarter last year [5] - Market Capitalization stands at $2.07 billion [5] Strategic Outlook - Management identified a shift towards lower-priced frames and a slowdown in contact lens growth among younger consumers as factors impacting performance [3] - The company plans to invest in AI-driven initiatives, expand its physical presence, and introduce new products like AI-powered glasses in collaboration with Google and Samsung [4] - Co-CEO acknowledged a more conservative revenue outlook due to ongoing macroeconomic uncertainties while emphasizing commitment to margin expansion through cost control [4]