Dive Brief:
- Building on a plan introduced at the beginning of the year, Warby Parker on Thursday announced its e-commerce business has returned to growth. Revenue from that segment of its business grew 4.4% year over year in the second quarter, while revenue from its stores grew 17.8%.
- Overall, the company’s net revenue increased 13.3% year over year to $188.2 million and its gross margin improved 140 basis points to 56%.
- Warby Parker also narrowed its losses during the period, with operating loss improving 50.9% from the year-ago quarter to about $9 million and net loss decreasing 57.5% to $6.8 million.
Dive Insight:
Warby Parker said Q2 marked its highest e-commerce growth since the first quarter of fiscal year 2021.
The company in February outlined a number of key focus areas for the year, which in addition to returning to e-commerce growth, included increasing marketing spend to drive brand awareness, expanding its core glasses business and leaning into its health care offerings.
In Q2, Warby Parker notched its fourth consecutive quarter of active customer growth, with active customers reaching 2.39 million, up 1.3% from the prior quarter and up 4.5% year over year, co-founder and co-CEO Dave Gilboa said on a call with analysts. Average revenue per customer during the second quarter grew 8.8% to $302.
“We anticipate seeing active customer growth continue to inflect upwards throughout the year. We know once we acquire a customer and deliver an exceptional Warby Parker experience, we see consistent retention metrics and repeat purchasing patterns across cohorts,” Gilboa said. The executive noted that within its most recent cohort, the company saw a revenue retention rate of about 50% over the past two years and about 100% over the past four years.
Warby Parker also continues to promote the value of its stores, reiterating its view of opening up to 900 stores eventually. The company has added 39 net new stores over the past 12 months, with 11 net new stores opening in Q2 alone, which brought the retailer to 256 total locations. The company remains on track to open 40 stores this year.
For the remainder of the year, the retailer has raised its financial guidance, now expecting full-year net revenue to be between $757 million and $762 million, representing an increase of 13% to 14% from last year. That's compared to previous guidance of revenue between $753 million and $761 million, representing year-over-year growth of 12.5% to 13.5%.
