Warby Parker(WRBY) - 2025 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company has experienced strong and steady growth since May, following challenges in April due to tariff announcements, with consistent repeat purchase behavior observed [3][4] - The company expects to deliver higher growth in the second half of 2025, with strong traffic in stores, apps, and website [5][6] - The company aims to expand EBITDA consistently by 100 to 200 basis points, targeting a long-term EBITDA margin of 20% [6][29] Business Line Data and Key Metrics Changes - The company operates around 300 stores and plans to open approximately 45 new stores this year, with a long-term goal of over 900 standalone stores in North America [10][11] - The densification strategy in suburban and urban markets is expected to drive growth, particularly in established markets like New York and Chicago [11][12] - The eye care business is still in early stages, with hundreds of optometrists employed and a focus on increasing awareness of eye exams offered in stores [18][20] Market Data and Key Metrics Changes - The competitive landscape remains stable since the company's launch in 2010, with no significant new entrants taking meaningful market share [8][9] - The company continues to outperform the market and expects gradual consolidation among independent optometry practices [9] Company Strategy and Development Direction - The company is focusing on creative marketing strategies to drive growth and expand its market presence [6][7] - The partnership with Target for shop-in-shop locations is yielding positive results, with plans for further expansion [13][14] - The company is investing in technology and AI, including a partnership with Google to develop smart glasses, which is seen as a transformative opportunity [32][35][49] Management's Comments on Operating Environment and Future Outlook - Management expresses confidence in the health of the consumer and the company's ability to navigate external challenges, including tariffs [4][5] - The company anticipates sustained demand trends and is optimistic about achieving a 17% growth momentum in the second half of 2025 [41][42] - There is a strong focus on increasing brand awareness and customer acquisition through marketing efforts [15][44] Other Important Information - The company has made strategic pricing adjustments in response to tariffs but has not seen significant pushback from customers [24][26] - The company is committed to providing exceptional value, maintaining competitive pricing for its products [25][27] Q&A Session Summary Question: Outlook for the U.S. Vision Care Market - Management noted consistent customer behavior and strong growth since May, despite challenges in April due to tariffs [3][4] Question: Expectations for the Second Half of 2025 - Management expects consistent growth and strong traffic across all platforms, feeling confident about the upcoming period [5][6] Question: Competitive Landscape - The competitive landscape has not materially changed, with expectations for gradual consolidation among independent practices [8][9] Question: Store Strategy and Expansion - The company plans to open around 45 new stores this year and sees significant opportunities for growth in existing markets [10][11] Question: Eye Exam Growth - Awareness is key for increasing eye exam growth, with efforts underway to inform customers about new store locations and services [19][20] Question: Insurance Partnerships - The company is expanding its insurance partnerships and sees significant growth potential in this area [23] Question: Pricing Actions and Elasticity - Management has not seen significant pushback from customers regarding recent pricing adjustments and remains committed to offering exceptional value [24][26] Question: Tariff Impact Mitigation - Management believes they have fully mitigated the impact of tariffs through strategic pricing and supply chain adjustments [28][29] Question: Smart Glasses Initiative - The partnership with Google aims to develop innovative smart glasses that integrate AI for enhanced user experience [32][35] Question: Core Growth Rate for Single Vision Glasses - The company continues to see strong growth in its glasses business, with expectations for continued expansion [39][40]