Warby Parker Inc. earnings

Management highlights

### Strategic Priorities - Scaling omnichannel model: Opened 14 net new stores, with 50 planned for 2026; expanded exam services to nearly 90% of stores, rolled out retinal imaging, and introduced new tools for optometrists. Focused on new product collections like sport, Spring 2026, and New Deco 2.0. Invested in e-commerce with personalized experiences. - Organizational readiness for AI glasses launch: Building capabilities and infrastructure, making investments in omnichannel shopping experience, optical labs, and brand/go-to-market strategy. - Driving brand awareness and customer acquisition: Ended quarter with 2.7 million active customers, up 4.8% trailing 12-month; average revenue per customer up 6.9%. Reallocating marketing spend, expanding insurance integration, and driving newness across the business. Also, highlighted the 2025 Impact Report showing progress in social impact.

Guidance

Reaffirming full year 2026 guidance: Revenue of $959 to $976 million (approx 10%-12% growth YOY), adjusted EBITDA of $117 to $119 million (12.2% margin, 130 basis points expansion YOY). Second quarter guidance: Revenue $235 to $238 million (approx 10%-11% growth YOY), adjusted EBITDA $27 to $29 million, ~12% adjusted EBITDA margin at midpoint. Outlook reflects recovery from Q1 weather impacts, current trends, and investment in growth initiatives.

Segment performance

First quarter revenue reached $242 million, up 8.3% year-over-year. Adjusted EBITDA was $30 million, with a 12.2% margin. Retail revenue increased 13.6% year-over-year. E-commerce revenue was $63.6 million, down 4.1% year-over-year due to lapping the home try-on program. Contacts revenue grew mid single digits with penetration around 10% of revenue. Exams grew 30% year over year. The sport collection launched, and $95 frames continue to outperform. E-commerce non-home try-on glasses growth was healthy with AI-powered tools.

Analyst Q&A

• Q: Unpack drivers to revenue acceleration in annual guide, clarify Q2 tracking.

  A: Positive trends in non-home try-on e-commerce, benefits of out-of-network reimbursement rollout and sport collection launch, stable customer growth with acceleration expected.

• Q: Talk about AUR trends in glasses.

  A: Tailwinds from progressives, new collections, more lens options, and changes to Add a Pair and Save program.

• Q: Unpack active customer growth trends, marketing and store activation plans.

  A: Q1 impacted by macro challenges, mid single digit active customer growth despite headwinds; marketing spend to be deployed efficiently, new initiatives like insurance expansion and AI glasses to drive growth.

• Q: Follow up on active customer growth, gross margin guidance.

  A: Younger demo trends in line with category, gross margin decrease due to costly leverage, but initiatives like more favorable tariff dynamics and margin-improving initiatives ahead.

• Q: AI glasses use cases, supply chain prep, margin parameters.

  A: Excited about natural human interaction, supply chain well-positioned with partners, use cases like math equations and translation; guidance doesn't include AI glasses revenue yet.

• Q: View on 1Q as low point, eye exam customer conversion.

  A: 1Q expected to be low point, eye exams up 30% with 90%+ stores offering exams, conversions at or exceed industry norms.

• Q: AI glasses rollout costs.

  A: Costs shared with Google, including training, labs, systems, etc., with expenses reflected in guidance, demand expected to be in favor post-launch.

• Q: Vision insurance penetration, customer spending.

  A: Target to capture more in-network and out-of-network insurance usage, higher average order values and satisfaction with insured customers.