Warby Parker(US:WRBY)2025-11-06 14:00Financial Data and Key Metrics Changes - Net revenue grew 15.2% year over year to $221.7 million, driven by a 20% increase in retail revenue [4][24] - Adjusted gross margin was 54.2%, slightly down from 54.6% in the previous year [29] - Adjusted EBITDA increased approximately 50% to $25.7 million, representing an adjusted EBITDA margin of 11.6% [4][32] Business Line Data and Key Metrics Changes - Glasses revenue grew 13% year over year, while contact lenses increased by 21% and eye exams surged by 41% [25][26] - Retail revenue accounted for 73% of total revenue, with a 20% year-over-year growth driven by new store openings [24][26] - The average revenue per customer rose 4.8% year over year to $320 [11][25] Market Data and Key Metrics Changes - Active customers reached 2.7 million, reflecting a 9.3% increase on a trailing 12-month basis [11][25] - The retail channel remains the primary growth engine, with strong customer acquisition through stores [11][12] - Contacts represented 11.5% of revenue, consistent with the prior quarter but below the industry average [21][26] Company Strategy and Development Direction - The company is entering its "third act," focusing on innovation through AI, including the development of AI glasses and enhanced customer experiences [6][8] - Plans to leverage partnerships with Google and Samsung to create intelligent eyewear [6][7] - The strategy includes expanding the retail footprint and enhancing the omnichannel experience while maintaining operational discipline [8][20] Management's Comments on Operating Environment and Future Outlook - Management noted a mixed shift in consumer behavior, particularly among younger customers, impacting average selling prices [4][40] - The company is taking a more conservative view on revenue for the remainder of the year due to current macroeconomic conditions [33][63] - Confidence remains in the long-term growth algorithm, with expectations for continued customer growth and EBITDA expansion [41][43] Other Important Information - The company completed a major system upgrade in its optical labs to support future growth and faster delivery times [9] - The decision to retire the Scout brand and Home Try-On program reflects a focus on aligning with customer preferences and simplifying operations [21][70] - The Pupils Project continues to provide free eyeglasses to students in need, expanding its reach significantly [22][23] Q&A Session Summary Question: Can you provide more details on the mix shift between single vision and progressives? - Management noted that younger consumers are more impacted by economic uncertainty, leading to a shift towards lower-priced frames, while progressive customers remain resilient [40] Question: How should we think about the growth algorithm moving forward? - The company maintains confidence in its long-term growth algorithm, expecting continued high growth and EBITDA expansion [41][43] Question: What is the early performance of the Target shop-in-shops? - Early performance is in line with expectations, and the company plans to continue expanding this initiative [53] Question: How is optometrist retention and recruitment tracking? - The company reports improved retention and recruitment of optometrists, aided by a strong employer reputation and supportive culture [58] Question: What impact has the sunset of the Home Try-On program had on e-commerce? - The company has seen strong growth in direct e-commerce purchases, offsetting the decline from the Home Try-On program [70]