• Revenue: $188.2 million, up 13.3% year-over-year.

• Gross Margin: Improved by 140 basis points to approximately 56%.

• Adjusted EBITDA: $19.6 million, representing a 10.4% margin, up nearly 40% year-over-year.

• Free Cash Flow: Generated $14 million in the quarter.

• Retail Revenue Growth: Increased 17.8% year-over-year.

• E-commerce Revenue Growth: Increased 4.4% year-over-year.

• Store Count: Added 39 net new stores over the last 12 months, ending with 256 stores.

• Active Customers: 2.4 million, an increase of 4.5% on a trailing 12-month basis.

• Average Revenue per Customer: Grew 8.8% to $302.

• Contact Lens Sales: Grew approximately 45% year-over-year, representing over 10% of revenue.

• Eye Exam Revenue: Grew approximately 40% year-over-year, representing approximately 5% of revenue.

• Cash Position: Approximately $238 million in cash, with an undrawn credit facility of $120 million.

• Warning! GuruFocus has detected 2 Warning Sign with WRBY.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Warby Parker Inc (NYSE:WRBY) reported a 13.3% year-over-year increase in net revenue, reaching $188.2 million.

• The company achieved a 40% growth in adjusted EBITDA, amounting to $19.6 million, with a margin of 10.4%.

• Retail revenue increased by 17.8% year-over-year, and e-commerce revenue grew by 4.4%, marking the highest quarterly growth since Q1 2021.

• The company expanded its store count to 256, adding 39 net new stores over the past year, which contributed to retail growth.

• Warby Parker Inc (NYSE:WRBY) raised its full-year guidance for both net revenue and adjusted EBITDA, expecting $72.5 million in adjusted EBITDA at the midpoint of its guidance.

Negative Points

• Despite growth, the company faces challenges in the broader macroeconomic environment, maintaining a conservative stance on guidance.

• Gross margin expansion is expected to moderate in Q3, with projections pointing to the midpoint of the mid-50s range.

• Marketing spend increased, leading to a slight deleverage, with marketing expenses rising from 11% to 11.9% of revenue.

• The company is still in the early stages of its eye care business, with only a small fraction of customers purchasing glasses and contacts with prescriptions from Warby Parker exams.

• Warby Parker Inc (NYSE:WRBY) has yet to see significant pent-up demand in the optical category, with no major change in consumer trends year-to-date.

Q & A Highlights

Q: Can you provide insights on the health of the broader industry and the factors affecting your Q3 guidance? A: David Gilboa, Co-CEO, explained that while there hasn't been a significant change in industry trends, Warby Parker benefits from serving high-income consumers and essential eye health needs. Steve Miller, CFO, noted that Q3 guidance reflects a conservative stance, with expectations for consistent gross margins and marketing spend, while leveraging SG&A for margin expansion.