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HomeTechnologyWarby Parker reports higher revenue and losses in Q2

Warby Parker reports higher revenue and losses in Q2


Warby Parker Inc. (No. 315 in the 2021 Digital Commerce 360 Top 1000) reported significant revenue year-over-year increases for the quarter and six months ended June 30. However, its losses grew even faster.

The vision care merchant reported revenue for the quarter rose 13.7%, to $149.6 million, from $131.6 million in Q2 2021. For the six months ended June 30, revenue was $302.8 million, up 11.9% from $207.5 million for the comparable period in 2021.

The net loss for the quarter ended June 30 was $32.2 million. That was up more than three-fold from $10.3 million a year earlier. For the six months, Warby Parker’s net loss was $66.3 million. The loss was more than triple the loss of $20.4 million during the first half of 2021.

While the quarter started strong, Warby Parker saw a shift in its productivity and overall demand starting in late May, Dave Gilboa, co-founder and co-CEO, told analysts during an Aug. 11 conference call.

“We believe this weakness in demand is industry-wide driven by lingering pandemic effects, inflation and shift in how consumers are spending their money,” Gilboa said, according to a Seeking Alpha transcript.

Despite the macroeconomic trends, the average revenue per customer grew 8.2% and reached a new high of $234 in Q2. The retailer also reported an 8.7% year-over-year increase in active customers to 2.26 million.

During the quarter, Warby Parker also streamlined its corporate team. It eliminated 63 roles, roughly 15% of its corporate headcount.

Lower margins, higher costs

The retailer attributed the second-quarter results to greater penetration of contact lens sales — which have lower profit margins than eyeglasses — and rising costs. The retailer says the increased contact lens sales contributed to a decline in its gross margin to 57.7%, down from 59.3% in Q2 2021.

Other factors affecting second-quarter results included store-count growth and increased salary and benefit costs associated with optometrists as the retailer hired them to boost its eye-exam business. Warby Parker says selling higher-margin progressive lenses and savings gleaned from using its in-house optical laboratory network partially offset those costs.

Warby Parker says its selling, general and administrative expenses increased from $31.6 million to $118.4 million. Reasons included an increase of $16.2 million in stock-based compensation costs and payroll taxes. Also contributing was a $3.3 million stock donation to the Warby Parker Impact Foundation.

Warby Parker offers revised guidance 

Warby Parker is revising its 2022 full-year outlook to the following:

  • Net revenue of $584 million to $595 million, representing 8% to 10% growth versus the full year 2021. The retailer’s prior 2022 guidance projected revenue growth of 20% to 22% over 2021, or $650 million to $660 million.
  • Adjusted earnings before interest, taxes, and depreciation (EBITDA) margin of approximately 3.8% to 4.4%. Adjusted EBITDA of about $22 million to $26 million, which includes an estimated impact of about $7.5 million related to the pandemic.
  • 40 new store openings bringing the total store count to 201.

During the quarter ended June 30, Warby Parker reported:

  • Revenue of $149.6 million, up 13.7%, compared to $131.6 million in the second quarter of 2021.
  • A net loss of $32.2 million, up more than three-fold from $10.3 million a year earlier.
  • An 8.7% year-over-year increase to 2.26 million active customers.
  • An 8.2% increase in average revenue per customer increased to $254.
  • The opening of nine new stores during the quarter, ending the quarter with 178 stores.

For the six months ended June 30, Warby Parker reported:

  • Revenue of $302.8 million, up 11.9% from $207.5 million for the comparable period in 2021.
  • A net loss of $66.3 million, more than triple the loss of $20.4 million during the first half of 2021.

Percentage changes may not align exactly with dollar figures due to rounding.

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