Dive Brief:
- Warby Parker on Thursday reported third quarter net revenue grew 13.3% year over year to $192.4 million. By channel, retail revenue increased about 20% year over year, while e-commerce revenue grew 1%, executives said on a call with analysts Thursday.
- The eyeglass company narrowed its losses during the period, with operating loss reaching $6.6 million from $19.8 million in the third quarter of 2023, and net loss hitting $4 million from $17.4 million last year.
- The company’s active customer base grew 5.6% from the year-ago period to 2.43 million, while average revenue per customer increased 7.5% to $305.
Dive Insight:
Warby Parker in its third quarter reported double-digit revenue gains at a time when many across the industry are facing declining sales.
“Warby Parker’s Q3 performance is a direct result of our team’s commitment to making progress on our strategic initiatives, in particular expanding our marketing efforts, investing in store expansion, and enhancing our holistic vision care offering,” co-founder and co-CEO Neil Blumenthal said in a statement.
During the third quarter, Warby Parker opened 13 net new stores, ending the period with a total of 269 stores. Executives — who said the company remains on track to open 40 new stores this year — continued to tout the potential for a footprint of more than 900 stores eventually.
The retail channel represented about 70% of Warby Parker’s revenue during Q3, co-CEO and co-founder Dave Gilboa said on Thursday’s call.
The company has also been working to grow its eye exam offerings across its fleet of stores. Over the past year, Warby Parker added 45 net new eye exam locations, bringing its total to 228 stores, or 85% of its footprint.
Eye exam revenue in Q3 grew about 40% year over year to represent 5% of the company’s total revenue, executives said.
“Today, the majority of our customers still get their eye exams elsewhere and bring their prescriptions to Warby Parker, highlighting the opportunity in front of us to broaden awareness of the service and capture more share of this $11 billion segment of the industry,” Gilboa said.
The company has found that customers who complete eye exams within a Warby Parker location will spend more on their initial purchase compared to other customers and over time will become the company’s highest lifetime value customers.
“We find that exam stores drive higher sales than nonexam stores,” Gilboa said. “Industrywide, approximately 75% of prescription glasses are purchased at the same location an exam takes place. As we've increased the number of stores offering eye exams, we've seen strong growth in average revenue per customer driven by eye exam revenue, a higher penetration of progressive lenses and contact lenses.”
Given the company’s performance this year, Warby Parker on Thursday raised its full-year guidance. The company now expects net revenue between $765 million and $768 million, up from prior guidance of $757 million and $762 million, representing 14% to 15% year-over-year growth. Adjusted EBITDA is expected to be $73 million at the midpoint of its revenue range.
