Warby Parker Inc. continued to drive sales increases through the first-quarter Omicron wave of COVID-19 — but the eyeglass retailer is still working to sync up its bottom line with its brand profile.
Costs related to the eyewear retailer’s direct listing on the New York Stock Exchange in September weighed heavily on the first quarter. Including a $25.9 million boost in stock-based compensation expense, Warby Parker’s net losses attributed to common shareholders widened to $34.1 million, or 30 cents a share, from $1.6 million, or 3 cents, a year earlier.
Adjusted earnings before interest, taxes, depreciation and amortization slipped $8.5 million to $800,000.
Revenues for the three months ended March 31 increased 10.3 percent to $153.2 million from $139 million, with the company saying it lost about $15 million in sales due to the Omicron variant.
The brand has continued to grow through the pandemic, with first-quarter compounded annual growth over three years totaling 17.9 percent.
“Our team has a lot to be proud of this quarter,” said Dave Gilboa, cofounder and co-chief executive officer. “We opened eight new retail stores, expanded our eye exam capacity, launched four new eyewear collections, scaled our vertically integrated supply chain, and continued to deliver above-and-beyond experiences to our customers, who are spending more with us than ever before.”
The eight stores the company opened during the quarter brought the total to 169 retail outposts, while the retailer also more than doubled the revenue of its contact lens offering.
The company’s active customer count increased by 18 percent to 2.23 million.
Neil Blumenthal, cofounder and co-CEO, said: “Despite a challenging macroeconomic backdrop, we continue to grow faster than others in our industry. We believe our omnichannel business model, compelling value proposition and strong consumer brand uniquely position us to capture market share for years to come in both good and turbulent environments.”
While the company just barely missed analysts’ revenue projections for the quarter — falling $832,000 short — Warby Parker is still looking for the top line to grow by 20 percent to 22 percent this year to range from $650 million to $660 million.
Zachary Warring, an equity analyst at CRFA Research, kept his “buy” rating on the company’s stock, but lowered his 12-month price target by $5 to $25. Shares of the stock fell 5.3 percent to $16.51 on Monday.
“We continue to believe that Warby has plenty of runway for growth and are doing well to manage costs,” Warring said. “We see Warby outperforming as the company grows at [a more than] 20 percent rate and innovating within the space.”
On a conference call with analysts, Gilboa pointed to a bright future despite the current troubles in the market.
“In an environment like the challenging one we’re in, we are grateful for the inherent resilience and durability of both our industry and business model,” he said. “The optical industry is large and growing and historically has remained resilient across both strong and weak economic environments. While we can’t predict what the economy will look like in the coming months and years, we do know that consumers across the U.S. and Canada will need to access the essential products and services we offer to help them see. Seventy-nine percent of adults use some form of vision correction, and we expect that number to increase as there are several macro factors contributing to rising vision correction needs like increased screen time and increased time spent indoors.”
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