Warby Parker provides guidance ahead of public debut

Dive Brief:

Ahead of its New York Stock Exchange debut next week, Warby Parker provided guidance into its third quarter and fiscal year.
The DTC eyewear brand expects third quarter net revenues to reach between $131 million and $133 million, a 26% to 28% year-over-year increase. Adjusted EBITDA margin — which excludes one-time direct listing-related expenses and costs associated with the Warby Parker Impact Foundation — is expected to be 4% to 5%, according to a company press release.
For the full year, Warby Parker expects net revenue of $532 million to $537 million, an increase of 35% to 36% from last year and up 44% to 45% from 2019.

Dive Insight:

After confidentially filing paperwork to go public in June and announcing last month it would pursue a direct listing, Warby Parker is set to make its New York Stock Exchange debut next week, Sept. 29.

Like many DTC brands that have gone public in recent years, Warby Parker has struggled to reach profitability. The brand has reported losses or broke even every year since fiscal 2018, with a $55.9 million net loss in 2020. However, Warby Parker is starting to improve its losses, reporting a $7.3 million loss in the six months ended June 30, 2021, from a loss of $10 million a year prior.

But Warby Parker, like other digitally native brands, appears to be betting on stores to offset the high advertising costs associated with customer acquisition — something that often hinders DTC brands' ability to turn a profit. The brand expects to open between 30 and 35 new stores this year, pushing the total to between 155 and 160 stores.

In the first six months of the year, Warby Parker recorded 2.1 million customers, up 20% year over year and 28% from 2019. The brand's net revenue in the first half reached $270.5 million, up 53% from the same period last year. And Warby Parker expects the sales momentum to continue into next year, projecting net revenue to grow at least 25% in 2022.

"Throughout the first half of 2021 we've continued to observe strong and consistent revenue growth," Chief Financial Officer Steve Miller said in a statement. "As we look ahead to the remainder of the year and into 2022, we expect these trends to sustain, supported by continued strong customer economics, our expanding retail footprint, as well as continued steady increases in active customers and average order value as we evolve into a holistic vision care company."