Warby Parker's stock sees biggest gain in nearly two years company raises guidance, overshadowing a quarterly loss

By Ciara Linnane

Company says the April solar eclipse offered a promising marketing opportunity

Warby Parker Inc.'s stock soared 18.5% Thursday to put it on track for its biggest one-day gain in almost two years after the maker of eyewear raised its full-year revenue guidance to offset a first-quarter loss.

The last time the stock gained as much was Aug. 11, 2022, when it closed up 19.2%.

Co-founder and co-Chief Executive Dave Gilboa said the company is aiming to reaccelerate glasses and active customer growth and is encouraged by strength in single-vision glasses.

Glasses accounted for 70% of revenue growth in the quarter, growing 13% from the year-earlier period, compared with the average growth of 8% in 2023, co-founder and co-CEO Neil Blumenthal said on the company's earnings call.

"Glasses are our highest margin product and the primary driver of gross margin expansion in the quarter," Blumenthal told analysts, according to a FactSet transcript.

The glasses business is also being boosted by the exam business, after the company invested to add more optometrists at stores. Exam stores drive higher sales - about 75% of prescription glasses are purchased at the same location as an eye exam.

The company also invested in expanding its store base, opening eight net new stores in the quarter. It expects to open 40 new stores this year. It has also worked to improve its e-commerce channel.

Warby Parker now has 245 stores in total and plans to grow that network to 900, which would still be just a fraction of the roughly 45,000 optical shops in the U.S.

The company used the solar eclipse on April 8 as a marketing opportunity, offering free eclipse glasses at stores. That created a spike in foot traffic to its highest retail week ever, got thousands of press mentions and a further boost from customers of Delta Air Lines Inc. (DAL), which distributed the eclipse glasses to passengers on their special eclipse flights, Gilboa told analysts.

The New York-based company (WRBY) had a net loss of $2.679 million, or 2 cents a share, for the quarter, narrower than the loss of $10.8 million, or 9 cents a share, posted in the year-earlier period. Revenue rose to $200.0 million from $171.9 million a year ago.

The FactSet consensus was for EPS of 7 cents and revenue of $196.0 million.

The company ended the quarter with 2.36 million active customers, an increase of 3.2% on a trailing 12-month basis. Average revenue per customer rose 9.6% to $296.

The company raised its guidance for 2024 and expects revenue to grow 12.5% to 13.5% to $753 million to $761 million. The FactSet consensus is for revenue of $755.1 million.

The stock has gained 2.8% in the year to date, while the S&P 500 has gained 8.8%.

-Ciara Linnane

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05-09-24 1107ET

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