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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Warby Parker Inc | NYSE:WRBY | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.71 | -2.50% | 27.71 | 28.68 | 27.68 | 28.46 | 1,439,810 | 01:00:00 |
From Nov 2024 to Feb 2025
Net revenue increased 13.3% year over year to $192.4 million; Company raises FY outlook
Active Customers increased 5.6% on a trailing 12-month basis; Average Revenue per Customer increased 7.5%
Warby Parker Inc. (NYSE: WRBY) (“Warby Parker” or the “Company”), a direct-to-consumer lifestyle brand focused on vision for all, today announced financial results for the third quarter ended September 30, 2024.
“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,” shared Co-Founder and Co-CEO Neil Blumenthal.
“We’re particularly encouraged by the momentum we’re seeing in early Q4. As we close out the year, we’re focused on continuing to capture market share, bring new customers to the brand, and deliver on our commitment to accelerate growth and improve profitability year over year,” said Co-Founder and Co-CEO Dave Gilboa.
Third Quarter 2024 Highlights
Third Quarter 2024 Year Over Year Financial Results
Balance Sheet Highlights
Warby Parker ended the third quarter of 2024 with $251.0 million in cash and cash equivalents.
2024 Outlook
For the full year 2024, Warby Parker is raising its guidance as follows:
“We’re pleased that we delivered continued revenue growth and adjusted EBITDA margin expansion in the third quarter. Given outperformance year-to-date, we are raising our full year revenue and adjusted EBITDA guidance, which we anticipate will set the stage for a strong 2025,” said Chief Financial Officer Steve Miller.
The guidance and forward-looking statements made in this press release and on our conference call are based on management's expectations as of the date of this press release.
(1) Please see the reconciliation of non-GAAP financial measures to the most comparable GAAP financial measure in the section titled “Non-GAAP Financial Measures” below.
Webcast and Conference Call
A conference call to discuss Warby Parker’s third quarter 2024 results, as well as fourth quarter and full year 2024 outlook, is scheduled for 8:00 a.m. ET on November 7, 2024. To participate, please dial 833-470-1428 from the U.S. or 404-975-4839 from international locations. The conference passcode is 681992. A live webcast of the conference call will be available on the investors section of the Company’s website at investors.warbyparker.com where presentation materials will also be posted prior to the conference call. A replay will be made available online approximately two hours following the live call for a period of 90 days.
Forward-Looking Statements
This press release and the related conference call, webcast and presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, including expectations regarding achieving profitability and growth in our e-commerce channel, delivering stakeholder value, growing market share, and our guidance for the quarter and year ending December 31, 2024; expectations regarding the number of new store openings during the year ending December 31, 2024; management’s plans, priorities, initiatives and strategies; and expectations regarding growth of our business. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” or “would,” or the negative of these words or other similar terms or expressions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all.
Forward-looking statements are based on information available at the time those statements are made and are based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management as of that time with respect to future events. These statements are subject to risks and uncertainties, many of which involve factors or circumstances that are beyond our control, that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. These risks and uncertainties include our ability to manage our future growth effectively; our expectations regarding cost of goods sold, gross margin, channel mix, customer mix, and selling, general, and administrative expenses; increases in component and shipping costs and changes in supply chain; our reliance on our information technology systems and enterprise resource planning systems for our business to effectively operate and safeguard confidential information; our ability to invest in and incorporate new technologies into our products and services; our ability to engage our existing customers and obtain new customers; our ability to expand in-network access with insurance providers; planned new retail stores in 2024 and going forward; an overall decline in the health of the economy and other factors impacting consumer spending, such as recessionary conditions, inflation, government instability, and geopolitical unrest; our ability to compete successfully; our ability to manage our inventory balances and shrinkage; the growth of our brand awareness; our ability to recruit and retain optometrists, opticians, and other vision care professionals; the spread of new infectious diseases; the effects of seasonal trends on our results of operations; our ability to stay in compliance with extensive laws and regulations that apply to our business and operations; our ability to adequately maintain and protect our intellectual property and proprietary rights; our reliance on third parties for our products, operation and infrastructure; our duties related to being a public benefit corporation; the ability of our Co-Founders and Co-CEOs to exercise significant influence over all matters submitted to stockholders for approval; the effect of our multi-class structure on the trading price of our Class A common stock; and the increased expenses associated with being a public company. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the Company's expectations is included in our most recent reports filed with the SEC on Form 10-K and Form 10-Q. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.
Additional information regarding these and other factors that could affect the Company’s results is included in the Company’s SEC filings, which may be obtained by visiting the SEC's website at www.sec.gov. Information contained on, or that is referenced or can be accessed through, our website does not constitute part of this document and inclusions of any website addresses herein are inactive textual references only.
Glossary
Active Customers is defined as unique customer accounts that have made at least one purchase in the preceding 12-month period.
Average Revenue per Customer is defined as the sum of the total net revenues in the preceding 12-month period divided by the current period Active Customers.
Non-GAAP Financial Measures
We use Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cost of Goods Sold (“Adjusted COGS”), Adjusted Gross Margin, Adjusted Gross Profit, Adjusted Selling, General, and Administrative Expenses (“Adjusted SG&A”), and Free Cash Flow as important indicators of our operating performance. Collectively, we refer to these non-GAAP financial measures as our “Non-GAAP Measures.” The Non-GAAP Measures, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.
Adjusted EBITDA is defined as net income (loss) before interest and other income, taxes, and depreciation and amortization as further adjusted for asset impairment costs, stock-based compensation expense and related employer payroll taxes, amortization of cloud-based software implementation costs, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs, major system implementation costs, and transaction costs. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net revenue.
Adjusted COGS is defined as cost of goods sold adjusted for stock-based compensation expense and related employer payroll taxes.
Adjusted Gross Profit is defined as net revenue minus Adjusted COGS. Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net revenue.
Adjusted SG&A is defined as SG&A adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs, major system implementation costs, and transaction costs.
Free Cash Flow is defined as net cash provided by operating activities minus purchases of property and equipment.
The Non-GAAP Measures are presented for supplemental informational purposes only. A reconciliation of historical GAAP to Non-GAAP financial information is included under “Selected Financial Information” below.
We have not reconciled our Adjusted EBITDA Margin guidance to GAAP net income (loss) margin, or net margin, or Adjusted EBITDA guidance to GAAP net income (loss) because we do not provide guidance for GAAP net margin or GAAP net income (loss) due to the uncertainty and potential variability of stock-based compensation and taxes, which are reconciling items between GAAP net margin and Adjusted EBITDA Margin and GAAP net income (loss) and Adjusted EBITDA, respectively. Because such items cannot be reasonably provided without unreasonable efforts, we are unable to provide a reconciliation of the Adjusted EBITDA Margin guidance to GAAP net margin and Adjusted EBITDA guidance to GAAP net income (loss). However, such items could have a significant impact on GAAP net margin and GAAP net income (loss).
About Warby Parker
Warby Parker (NYSE: WRBY) was founded in 2010 with a mission to inspire and impact the world with vision, purpose, and style–without charging a premium for it. Headquartered in New York City, the co-founder-led lifestyle brand pioneers ideas, designs products, and develops technologies that help people see, from designer-quality prescription glasses (starting at $95) and contacts, to eye exams and vision tests available online and in our 269 retail stores across the U.S. and Canada.
Warby Parker aims to demonstrate that businesses can scale, do well, and do good in the world. Ultimately, the Company believes in vision for all, which is why for every pair of glasses or sunglasses sold, it distributes a pair to someone in need through its Buy a Pair, Give a Pair program. To date, Warby Parker has worked alongside its nonprofit partners to distribute more than 15 million glasses to people in need.
Selected Financial Information
Warby Parker Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) (Amounts in thousands, except share data)
September 30, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
251,032
$
216,894
Accounts receivable, net
1,094
1,779
Inventory
52,766
62,234
Prepaid expenses and other current assets
16,317
17,712
Total current assets
321,209
298,619
Property and equipment, net
166,500
152,332
Right-of-use lease assets
141,552
122,305
Other assets
8,729
7,056
Total assets
$
637,990
$
580,312
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
36,663
$
22,456
Accrued expenses
46,015
46,320
Deferred revenue
19,216
31,617
Current lease liabilities
26,068
24,286
Other current liabilities
2,155
2,411
Total current liabilities
130,117
127,090
Non-current lease liabilities
170,104
150,171
Other liabilities
1,019
1,264
Total liabilities
301,240
278,525
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value; Class A: 750,000,000 shares authorized at September 30, 2024 and December 31, 2023, 101,590,781 and 98,368,239 issued and outstanding at September 30, 2024 and December 31, 2023, respectively; Class B: 150,000,000 shares authorized at September 30, 2024 and December 31, 2023, 18,674,743 and 19,788,682 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively, convertible to Class A on a one-to-one basis
12
12
Additional paid-in capital
1,018,751
970,135
Accumulated deficit
(680,344
)
(666,831
)
Accumulated other comprehensive loss
(1,669
)
(1,529
)
Total stockholders’ equity
336,750
301,787
Total liabilities and stockholders’ equity
$
637,990
$
580,312
Warby Parker Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) (Amounts in thousands, except share and per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Net revenue
$
192,447
$
169,849
$
580,672
$
507,910
Cost of goods sold
87,580
77,117
256,964
229,752
Gross profit
104,867
92,732
323,708
278,158
Selling, general, and administrative expenses
111,480
112,499
344,404
328,585
Loss from operations
(6,613
)
(19,767
)
(20,696
)
(50,427
)
Interest and other income, net
2,842
2,655
7,965
6,815
Loss before income taxes
(3,771
)
(17,112
)
(12,731
)
(43,612
)
Provision for income taxes
301
301
782
538
Net loss
$
(4,072
)
$
(17,413
)
$
(13,513
)
$
(44,150
)
Net loss per share attributable to common stockholders, basic and diluted
$
(0.03
)
$
(0.15
)
$
(0.11
)
$
(0.38
)
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted
120,885,913
118,003,640
120,041,740
116,995,545
Warby Parker Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) (Amounts in thousands)
Nine Months Ended September 30,
2024
2023
Cash flows from operating activities
Net loss
$
(13,513
)
$
(44,150
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
33,533
28,184
Stock-based compensation
38,664
54,083
Non-cash charitable contribution
2,196
3,191
Asset impairment charges
522
1,407
Amortization of cloud-based software implementation costs
2,862
1,679
Change in operating assets and liabilities:
Accounts receivable, net
686
714
Inventory
9,468
5,231
Prepaid expenses and other assets
(1,148
)
410
Accounts payable
13,267
2,756
Accrued expenses
2,728
(1,207
)
Deferred revenue
(12,401
)
(8,005
)
Other current liabilities
(256
)
(116
)
Right-of-use lease assets and current and non-current lease liabilities
2,469
3,458
Other liabilities
(245
)
(309
)
Net cash provided by operating activities
78,832
47,326
Cash flows from investing activities
Purchases of property and equipment
(46,311
)
(40,098
)
Investment in optical equipment company
(2,000
)
(1,000
)
Net cash used in investing activities
(48,311
)
(41,098
)
Cash flows from financing activities
Proceeds from stock option exercises
2,686
1,017
Proceeds from shares issued in connection with employee stock purchase plan
1,068
1,124
Net cash provided by financing activities
3,754
2,141
Effect of exchange rates on cash
(137
)
(989
)
Net change in cash and cash equivalents
34,138
7,380
Cash and cash equivalents, beginning of period
216,894
208,585
Cash and cash equivalents, end of period
$
251,032
$
215,965
Supplemental disclosures
Cash paid for income taxes
$
782
$
400
Cash paid for interest
169
155
Cash paid for amounts included in the measurement of lease liabilities
21,668
27,124
Non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses
$
5,553
$
5,941
Warby Parker Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP measure, which is net loss:
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
(unaudited, in thousands)
(unaudited, in thousands)
Net loss
$
(4,072
)
$
(17,413
)
$
(13,513
)
$
(44,150
)
Adjusted to exclude the following:
Interest and other income, net
(2,842
)
(2,655
)
(7,965
)
(6,815
)
Provision for income taxes
301
301
782
538
Depreciation and amortization expense
11,829
9,760
33,533
28,184
Asset impairment charges
101
757
522
1,407
Stock-based compensation expense(1)
10,961
16,466
39,373
54,496
Non-cash charitable donation(2)
—
2,591
2,196
3,191
Amortization of cloud-based software implementation costs(3)
854
853
2,862
1,679
ERP implementation costs(4)
—
371
—
4,413
Other costs(5)
176
—
1,479
—
Adjusted EBITDA
$
17,308
$
11,031
$
59,269
$
42,943
Adjusted EBITDA Margin
9.0
%
6.5
%
10.2
%
8.5
%
(1)Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions, as well as the issuance of 48,486 Class A common stock to charitable donor advised funds in February 2024. For both of the three months ended September 30, 2024 and 2023, the amount includes $0.2 million of employer payroll taxes associated with releases of RSUs and option exercises. For the nine months ended September 30, 2024 and 2023, the amount includes $0.7 million and $0.4 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises.
(2)Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in both May 2024 and August 2023 to the Warby Parker Impact Foundation and 56,938 shares of Class A common stock to charitable donor advised funds in June 2023.
(3)Represents the amortization of costs capitalized in connection with the implementation of cloud-based software.
(4)Represents internal and external non-capitalized costs related to the implementation of our new Enterprise Resource Planning (“ERP”) system.
(5)Represents charges for certain legal matters outside the ordinary course of business.
Warby Parker Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
The following table presents our non-GAAP, or adjusted, financial measures for the periods presented as a percentage of revenue. Each cost and operating expense is adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs, major system implementation costs, and transaction costs.
Reported
Adjusted
Reported
Adjusted
Three Months Ended September 30,
Three Months Ended September 30,
Nine Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
2024
2023
2024
2023
(unaudited, in thousands)
(unaudited, in thousands)
(unaudited, in thousands)
(unaudited, in thousands)
Cost of goods sold
$
87,580
$
77,117
$
87,299
$
76,835
$
256,964
$
229,752
$
256,154
$
228,976
% of Revenue
45.5
%
45.4
%
45.4
%
45.2
%
44.3
%
45.2
%
44.1
%
45.1
%
Gross profit
$
104,867
$
92,732
$
105,148
$
93,014
$
323,708
$
278,158
$
324,518
$
278,934
% of Revenue
54.5
%
54.6
%
54.6
%
54.8
%
55.7
%
54.8
%
55.9
%
54.9
%
Selling, general, and administrative expenses
$
111,480
$
112,499
$
100,624
$
93,353
$
344,404
$
328,585
$
302,166
$
267,261
% of Revenue
57.9
%
66.2
%
52.3
%
55.0
%
59.3
%
64.7
%
52.0
%
52.6
%
Warby Parker Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
The following table reflects a reconciliation of each non-GAAP, or adjusted, financial measure to its most directly comparable financial measure prepared in accordance with GAAP:
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
(unaudited, in thousands)
(unaudited, in thousands)
Cost of goods sold
$
87,580
$
77,117
$
256,964
$
229,752
Adjusted to exclude the following:
Stock-based compensation expense(1)
281
282
810
776
Adjusted Cost of Goods Sold
$
87,299
$
76,835
$
256,154
$
228,976
Gross profit
$
104,867
$
92,732
$
323,708
$
278,158
Adjusted to exclude the following:
Stock-based compensation expense(1)
281
282
810
776
Adjusted Gross Profit
$
105,148
$
93,014
$
324,518
$
278,934
Selling, general, and administrative expenses
$
111,480
$
112,499
$
344,404
$
328,585
Adjusted to exclude the following:
Stock-based compensation expense(1)
10,680
16,184
38,563
53,720
Non-cash charitable donation(2)
—
2,591
2,196
3,191
ERP implementation costs(3)
—
371
—
4,413
Other costs(4)
176
—
1,479
—
Adjusted Selling, General, and Administrative Expenses
$
100,624
$
93,353
$
302,166
$
267,261
Net cash provided by operating activities
$
27,282
$
19,931
$
78,832
$
47,326
Purchases of property and equipment
(14,223
)
(15,488
)
(46,311
)
(40,098
)
Free Cash Flow
$
13,059
$
4,443
$
32,521
$
7,228
(1)
Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions, as well as the issuance of 48,486 Class A common stock to charitable donor advised funds in February 2024. For both of the three months ended September 30, 2024 and 2023, the amount includes $0.2 million of employer payroll taxes associated with releases of RSUs and option exercises. For the nine months ended September 30, 2024 and 2023, the amount includes $0.7 million and $0.4 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises.
(2)Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in both May 2024 and August 2023 to the Warby Parker Impact Foundation and 56,938 shares of Class A common stock to charitable donor advised funds in June 2023.
(3)Represents internal and external non-capitalized costs related to the implementation of our new ERP system.
(4)Represents charges for certain legal matters outside the ordinary course of business.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107952951/en/
Investor Relations: Jaclyn Berkley, Head of Investor Relations Brendon Frey, ICR investors@warbyparker.com
Media: Ali Weltman ali@derris.com
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