Earnings call transcript Q2 2023

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Operator

Hello, and welcome to the Warby Parker Inc. 2Q 2023 Earnings Conference Call. My name is Elliot and I'll be coordinating your call today. [Operator Instructions]

I would now like to hand over to Jaclyn Berkley, Head of Investor Relations. yours. is floor The ahead. go Please

Jaclyn Berkley

you, and everyone. good morning, Thank

Here Gilboa, side our today are Officer. Steve and Dave Neil Blumenthal Financial Co-Founders Chief Senior President with Vice me Miller, and and Co-CEOs along

have we a Before we couple reminders. of begin,

available Our at our investor.warbyparker.com. presentation website on earnings slide release and are

of materially result During this from uncertainties. or as a comments those various our nature. risks Actual will be presentation, expressed call forward-looking we results of and and making in a may differ implied

these latest risks on including These forward-looking publicly to of we review on more the Risk XXXX filings, revise some For or are information update information XX-K. SEC please the X, law August assume Factors and company's about no based Form of statements statements. our forward-looking in annual except obligation titled as by section as the company's report required

financial be A measures to of non-GAAP to directly GAAP not can a non-GAAP on Additionally release substitute in comparable in morning's and available the accordance be we website. US press measures certain our in addition slide measures measures. our non-GAAP this will US measures are of performance our deck with and IR These for most discussing found financial reconciliation financial GAAP.

kick pass over I'll that, with And to us Dave it to off.

Dave Gilboa

and core customers, while results progress strategic meaningful was you another results, where share to and Good quarter our remainder financial today morning, the market QX thank delighting QX year. growth for delivered and our our against the discuss us joining of outlook for gaining we initiatives. making strong

realignment and of headwinds were marketing revenue. million expansion. our spend a was represents of year-over-year, delivered of year-over-year results our $XX.X margin adjusted as of in industry of of in XXX revenue Our points $XXX.X and million XX% and optical demand spite basis net an percentage the continued X.X% margin These EBITDA up

as we up to marketing we deliver and prior XX detail more period. will last us and shortly, months, our marketing spite setting to up the discuss down expect in spend be uncertainty. continued XX-month spend when In year-over-year year-over-year been of to compared in macro contrast the results has QX Over XX% strong QX

We our a experience and for unmatched combined in us environment, focus to continued customer and up productive continued value growing retail believe and a delivering challenging footprint superior success. have innovation us with on have digital enabled highly long-term outperform set operating

detail results our and net our recent raising on for Neil view and the in business minutes guidance full Steve of on updates will Based outperformance our adjusted shortly. updated XXXX, revenue progress our guidance But our provide I financial to drivers. of against on year our a provide more first EBITDA. continued core rest will we're few spend and

we care wider optimize we our technology progressive new services as using made vision view. innovation our In to progressives First, and offerings vision, platform, are product and into field lead QX, holistic distortion, premium and lens. launched reduce additional we company. a continue expand to of measurements with peripheral provide evolve a Precision Progressives Precision

than we lenses have point similar the all price film effect reduced This $X,XXX overall at all the products and glasses Additional value still highest in that in delivering start Precision benefits comfort. frame, and all is Progressives coatings. often our given like devices, for elsewhere. and which includes viewing visual introduced, quality include superior visual of digital is pricing product improved quality best-in-class $XXX, ever more while cost

uptake pleased still with seeing only the While in we channel, customers. early available retail and we days in from are our the are our

constructions. We designs creating also to unique continue collections, with innovate both our novel frame and

hughes indicates are points. together Art response of we've each starkly introduced willingness and purchase $XXX collection at Northern from handcrafted color and Glasses our complex this and Inspired customers start beautiful Edit silhouettes. the continued laminated distinctive Italy. seen range frame the across starting collection $XX, at in launching strong price a XXXX defined that a block creating lines to in construction contrasting addition to a color In blocks by collection, products we summer core style featuring has

order categories product basis XX% represents seamless customer in represents and primary representing other of year. versus a for still contact priority last the future average experience have in exams to eyewear deliver value. ago. revenue deliver Our strategic the lifetime year versus with exams to a Eye continued gateway revenue, QX growth well up are below opportunity purchases growth. customer strong Scaling and meaningful a a now industry of holistic and X.X% X.X% which is be QX X.X% to drive to XXX continues contacts prescription also points of contacts This and

with time. both investments are pleased we are the long-term deliver seeing value over and fronts We significant these progress on to expect

productivity. offering Supporting product while our team proprietary that is enhance of experience a improving technologies the customer suite

we excited AI digital technology uniquely positioned bring believe by the our our are to given rapid are innovation industry, evolution of and optical the and We this investments. heritage to

the particularly generative the as well as AI our product use are managers our applications early expanding shopping faster experiences for engineers customers. to designers productivity this easier encouraged of are by We create of and gains, from technology seeing

more enhancements our we QX, lead recommendations and in higher better the and V-X customers. which vision AI-driven digital products experience the drive and and few app frame Our like and AI of we to will to over offer expect expect learning has tests first-of-its-kind In will virtual shopping launched last experiences iOS improve years to team try-on our leveraged personalized we personalized our time. conversions virtual machine introduce over our

journey online talked As who digital these customers channels the can used integrated be either customer stores. by in about across so tools is check past, our the ultimately out in our we've two or

by more eye the make efficient. accessible and to opportunity more We also continue more telehealth be use to care excited convenient to

which minutes, exams. These we in are exam which who doctors stores. we with patients XX live suites patients in In in our also virtual eye under prescriptions addition number the the to video-assisted comprehensive enables expand vision their exams from investing using offer sitting renew to engage are in test of stores health remotely to home

a We have feedback are efforts offers efficiently great technology introduced seeing our directly to patients. exam add stores but with PC in small a to this only the very number we opportunity capacity We of manner technology optometrists our scale this promising from believe our or through stores results to to model. complementary in

advanced out to disease for continue we more our suites resulting roll without patients. Finally, a diagnostics exam better enabling in in dilation pupil limiting retinal experience

base highly The second core and growing complemented an channel. improving our driver store business e-commerce productive by is

advancing we eye holistic integral store to to our provide believe We is our continue mission to invest which in expanding care. base,

Colorado locations capabilities, including total XX% XX at Wichita, which new XX.X% of largely within into Greensboro existing number in last locations. new eye were offering quarter Rogers, brought stores recent Mississippi. XX Jackson revenue the since markets new quarter. the by and new markets Retail XXX end increased Albany, All driven include six eye of our year-over-year, fleet entries of of including the and of XX to Springs, QX or Arkansas, were year the most stores of exams Seven stores exam new stores addition in expansions net QX XXX

higher the nice driven in have increased eye of number seen per uptick customer revenue we've average and penetration of a both progressive offering exam As exams, lenses. eye a by stores we revenue

the demand continuing deliver efficient to customer union current compelling even acquisition highly economics vehicles environment. remain Stores in

to pay XX generate of continue EBITDA We and months stores four-wall new target margins that within XX%. adjusted back

in average about is the consistent QX our quarter, quarter-to-date spoke in in the prior call with For year store productivity trends with May. we line the was period, which earnings

with pleased cohorts. and we of recent our relative Given are of other stores the recent most traffic and headwinds the are mature by the early performance facing more encouraged performance industry, our

the the is this changes with in year. the XXXX, at we US, we penetration track still this channel, open to in and more of in XXX Consistent marketing are in the total As shops we Longer of of a our markets significant least start QX to to US. e-commerce which add down XX,XXX for stores the we year. fraction come X% on a of believe opportunity stores for a look year-over-year new at the in to we declined XX X% representing of sensitive year, of existing to term, years compared while further can remainder expectations optical spend shared QX the small

in We are last on we of positive comping believe this grow to dollars supported end spend year. marketing QX that in the HX of began year of track by we to pullback that see anniversary e-commerce at the channel marketing as begin our year-over-year

to forward. I'll Neil areas focus it customer going over hand to and metrics our Now review

Neil Blumenthal

Dave. Thanks

of driver attract multi-channel our our retain approach. and to with seamless ability consumers third is The our performance

of and of range history. over scaling months four per precision performance basis. on factors adoption recent retention X.X% our roughly Our increase, continued also spring. of increase our a eye cohort this a trailing to customer business, growing retention in and and care consumer XX% purchasing quarter revenue higher-priced progressives, this $XXX consistent to contact XX-month over the a strong most with A highlighted was of XXX% pleased months report XX rate average revenue and contributed for XX launching years repeat progressive, purchase We're to including by

rebalanced impact revenue, of half first e-commerce marketing a channel. spend on low has direct as growth As mentioned, we've had the the of Dave the a digits to in percent which our double

the we support in QX spend e-commerce expect marketing by quarters. channel see growth four in beginning XX-month year-over-year will we spend business in the which We're to year-over-year spend and reduced past as each marketing dropped We trailing XX% in of a on particular. across basis marketing our excited comp

momentum which customer year. year and of In active point marketing QX be and our positive X.X% expect to-date reflecting active We're active growth to seeing pullback. increasing QX, in report we saw customer quarter course customer over a the the fourth we the XX-month of spend our growth already trailing in believe for final of the growth low will

We a Warby to value someone second advocate Another own our customer on with this single we for experiences small service members for life believe is than they home. to members us customer the that year, make that customer that better half transact offers the and in once to become of the introduced Parker metric factor functionality and account. last incredible easier having of shops with household impact multiple of new who and us your for brand a a it on

in With individual is that stores the household and revenue between to now in line our levels continue our or experience marketing and of to judiciously rebalanced spend to strategically we paid customer channel will pre-pandemic a levels, exam additional redesigning with funds whether growth pediatric and percent deploying in as pre-pandemic e-commerce We remain low-teens. eye mix expect to invest media.

customer levels acquisition with this and these and sustainable awareness to pleased the growth. drive campaign customer across month we at marketing expect types normal Starting launching efforts, steady to are in addition We media boost are and efficiency to seeing are our we brand a new demographics.

investing campaign awareness by to our brand designed top-of-funnel Growth our and to brands our VP our and to represents long-term team new drive commitment This in growth. led of is drive

media we to TV the linear like Over as our year drive our we pulled marketing dollars last in channels spend, business. concentrated back our Progressives

those new overall awareness we This customer to stronger to which time. lead active brand grow supplement campaign will growth will over efforts believe

market in for Another customers. but we better insurance key the proposition even new our lever value customers, attracts not unlocks available believe also only to us an is existing which

insurance. purchasing still their us recognize spend More Warby customers versus vision customers than others in-network portion XX% are A leveraging out-of-pocket lower of Parker while those is at of their have elsewhere. that with benefits our

of number customers. reimbursement to seamless efforts for a have make We our underway more insurance

Warby that little universal check integrated seamlessly and eligibility to their in as landing in tool insurance which with launched in-network on our page friction we check Parker To and insurance customers as at possible. allows June, a benefits end checkout

relationships can We ever to customers with contracted In of care seamlessly their just More from with develop vision strong also growth we price checkout. insurance QX, in-network benefits apply saw at range managed us continue paying customers. reimbursement plans. a net their than

gives be vision Finally, glasses cities serve. expanded Jersey, to distribution immensely to had New free We of four the communities the care we program students. which and continue proud local school-based glasses on in we our to directly impact we've

report, over serves six we In since our the in over you read XX Buy cities in our impact countries our more while now encourage in a XX Pair served XXXX to QX. US, a We Project broader Give Pair inception. in released has Pupils total, which states program

excited committed to set out to start we remain strategic we about the forward, priorities the date. and Looking are at of progress the our year

we'll the Our in balance continue objective. year pass remain to financial our sustainable a start North over guidance driving long-term the performance between the Star the Steve long-term cover and year of to profitability. adjusted now detail. gave our call healthy at is to and confident growth we strategic maintaining We invest EBITDA in more margin full I'll And expanding in

Steve Miller

Thanks, $XXX.X with a of declined to Starting year-over-year Neil XX% versus QX revenue to range QX of end our million up channel and approximately up year-over-year everyone. above e-commerce X.X% guidance X% $XXX revenue Dave. retail million, revenue Good the increased We revenue. morning, while perspective, XXXX. of $XXX.X or X% high generated and year-over-year. XX.X% From million of approximately

revenue For the expectations back as as marketing reduction we to year-over-year, bring The e-commerce our intentional percent low levels by overall XXXX XX% the driven and line XX% second pre-pandemic our line our in in decline pre-pandemic in an by channel revenue spend of marketing spend teens. of quarter, with was XX% and to business in represented in mix. e-commerce compared in with a

this begin year-over-year. made opened the spend XX over pullbacks in versus months, XX increase marketing as marketing stores. and QX with to year. expect e-commerce to in begin revenue HX was positive XXX% anniversary period we dollars XXX QX spend in Retail QX in the new finishing the We productivity and of year, XX last comping same past we've stores We

period. as reminder, productivity opened stores per we the number of a retail sales average define in As

our the year as X.X% we a by X.X% openings average spend. increased follows decreasing So even From XX driven a $XXX. with where million as and revenue in increase finished as year-over-year growth active more marketing customers are and to our period ago mature our customer average growth It's in increasing active new continue we that revenue by similar stores our continue pattern the to worth those year, a to to we channel rebalance perform X.XX an add our perspective, in cohorts customer store ramp. active e-commerce an stores newer of quarter versus of noting same customers retail, per channel per customers,

that we're seeing will lowest anniversary momentum we we expect marketing As customer year active for QX We're QX with growth in of and Neil already. pleased quarters as consecutive mentioned, the pullbacks be as mix our four positive spend a in was driven contact in and exam revenue increase primarily eye sales. continued which customer, per ramping Progressives a an factors of increase business of average lens including few our both and percentage by our in

approximately highest XX.X%, second sold well growth. glasses prescription highest QX XXXX. in up market margin when the of This runway compared for category point of also the XX%, total starting product of substantial to XX.X% XXXX, still from below at leaving represented $XXX. Progressives and quarter our product price a is average Progressives are gross

glasses, We continue and customers. to into evolve as vision move that a from offers to holistic make only we progress brand care on into contacts exams one glasses eye our

to From our QX mix. have X% XXXX QX of business XXXX lenses to increased contact from X.X%

plus Over products, underpenetrated versus $XX exams billion well of $XX US has billion We for care of the percent eye of optical X.X% for future of portions from X.X% growth, same period national each industry. and sales eye Contacts to remain business both retailers. these as increased large a opportunities other revenue for optical mix. represent accounting our the

margin. Moving on gross to

As for gross a range of costs labs, optometrist store a our rent lenses, accounts and of shipping including reminder, optical build-outs. frames, the salaries, customer store depreciation margin

also lab includes our margin optical for optometrists gross and stock-based employees. expense Our compensation

to comparability, compensation. gross stock-based For excluding speaking will be margin I

was company large we a in of optical in by compared we lenses, The expand into vision QX XX.X% contact growth holistic margin segments QX the gross Second decrease, driven of adjusted year. year industry. and saw of year-over-year and and evolve these this was exams XX.X% quarter care into eye to last as strong XX.X% of

growing profiles per our medium accretive driver long lower our but of care us of holistic serve key margin a scaling and gross Expanding dollars than are of a part offering gross the term eyeglasses, have is customers' care over eye Eye exams and to and and vision allow revenue margin contacts to contact core offering our all customer. average needs.

contact and are dollars. margin their While cycle to percentage other higher gross accretive product margin subscription-like frequency our compared have offerings, lower a purchase gross to purchase lenses

two are year-over-year to optometrist gross directly cost into expansion our continued experienced fixed deleverage goods, portion margin our that occupancy also care. linked retail eye the represent We of and of in which areas more salaries,

naturally in in store has an stores. rent store growth store In from and to build-outs. count QX opened led specifically, Our XX new increase depreciation we

We also rollout Professional the stores, and saw year-over-year downward as overall an optometrists our PC model. for our we of optometry or Corporation pressure from on gross hired new increase margin in continued salaries,

As of therefore, optometrist quarter represents approximately an PC locations operated an from the with and or XX revenue XX the of both salaries. second we additional at directly, last with from stores where and XX% the XXX XXXX, end of end increase exams and year. exam stores optometrist engage of recognize QX This we employed

long investment greater of believe eye revenue exam new rates. experience, capabilities, higher in will We this eye ongoing in-store business result the term exam a benefit conversion control the and customer over as

to to There that dilutive partially are these offset tailwinds few a act accretive margin effects.

highest scale ago. accounted First, second versus, margin continue quarter, of for XX.X% we basis our year to a Progressives points the and up units, is XXX In which business. highest our Progressives prescription priced gross eyeglass

of Secondly, in glasses owned in-sourced and we New at Nevada. optical York to that prescription labs our scale portion we two orders continue the

continued gross refund turnaround lower We at expect margin rates with higher facilities Promoter result these our times. continued faster scaling and benefits, to in Net Scores, along

SG&A. to gears Shifting

including program; SG&A expense corporate covering retail As components; headquarters, business expenses. a marketing general includes salary and employees; overhead for experience, reminder, our try-on spend and our our three customer main home

or million or XX.X% compared of costs and donations. QX of of XX.X% stock-based in revenue. SG&A non-cash adjusted SG&A $XX.X Adjusted charitable $XX.X equity was expense, second XXXX depreciation, excludes SG&A to quarter million compensation Adjusted the like revenue

decrease lower including benefits were in general revenue to as basis implemented SG&A a costs of salary cost and August of our primary drivers percentage marketing adjustments point corporate we expenses. of year The in from the adjusted the XXX lower last and structure

Marketing period or from last growth of to year. for $XX.X XX% million of spend in same the compares XX.X% Marketing at the revenue XX% is XX.X% QX which revenue and million up quarter down $XX.X spend was lower of year-over-year revenue. came This in XXXX in year-over-year.

million revenue adjusted commitment $XX.X our profitable adjusted underscores improvement second EBITDA generated or This to to margin EBITDA ago In adjusted year-over-year of period. X% the compares now of of and of EBITDA. adjusted ability which to quarter, X.X%, year million, an $X.X representing we significant Turning in growth. the EBITDA drive

to the finished sheet. now position, Turning sheet support reflecting our deliberately which We balance $XXX our million to in balance will we deploy with growth and operations. quarter strong to continue a cash

We of million we of to credit letters million $XXX upsize $X undrawn an have also $XXX credit can for facility than million. other that

year our earnings outlook. half reaffirmed and February Now, to of strong our on guidance outlined full raising QX the rest our an performance our in XXXX, in call Based call we May. earnings of in view the first we're updated in QX

$XX.X to our new revenue percent of as For XX% approximately of adjusted at million, of range midpoint to equates the adjusted range. revenue growth now stores EBITDA $XXX $XXX in margin X.X% expect XXXX, of year. guidance revenue representing X.X%, margin open net We to guidance, the which to approximately of expect in of XX million with this still and gross we mid-XXs a EBITDA prior approximately million line topline a

with of XXXX. to of a to stock-based in compensation XX% our co-CEOs XXXX Stock-based normalize stock-based revenue in We're to We forecast both as in X% years equity of revenue X% to XXXX. result as in XXXX. net still still for roughly compensation is XX% range percentage of late anticipate a above forecasting compensation be a net the long-term compared to our grants multiyear

of versus X%. adjusted million the $XXX net we're $XXX growth the representing million million bottom-line X.X% EBITDA respect adjusted week third of XXXX to to observed an approximately August, Through to From $X.X million, $X a guiding revenue we're With to following; or retail to the revenue guiding XX%. margin first trailing approximately productivity X% XX-day perspective, we've of of EBITDA XXX%. of quarter, of to

please Dave With are open I, that, line questions. to Neil, take pleased Operator, the Q&A. for and your

Operator

[Operator Cowen. with Our from Instructions] question first you. Chen Oliver Thank comes TD

Your line is open.

Oliver Chen

David, quarter. Great Hi and Steve. Neil

the with face As has on opportunity Also, growth, we think Would mixed. you been as about what your thoughts in development? markets most of with volatility are and you how that seeing been traffic the big consumer you're for the store there trending? unit about potential traffic new it's think and more disinflation. inflation love productivity And and environment, what about excited

at the gets models, as the quarter. Steve, then And in easier compare bit we our gross fourth a on gross line, margin margin the look

thoughts on modeling any love XQ Thank there. would versus So you. XQ

Neil Blumenthal

peers we've in Thanks, talk in Oliver. space and other continue elevated It's more We're see This XXXX the be traffic the and year, conversion making still past phenomenal job traffic is and a when start optical we rates which our that's of our as also sort over is Neil. seeing and to but seen are levels normalize retailers true than teams the sort to consistent below to that in well, our encouraging. doing of of we stores. most

but of is urban encouraging split We that habits five and in of just to the we to of year our look in attribute the saw traffic and to are narrowing. teams office, and that is becoming as days, corporate this store things previously what to return One of ago as know days the three schedule many suburban, steady gaps able a predictable a as the more workers sort and is accordingly. at each week consistent we week, days some between been more more community we look sometimes at are have how now work expect four we very to

that scheduled back-to-school stronger seeing sort this last FSA of year than the season. signs back-to-school a and stronger we just year in at last this than sort is season back-to-school we a of exams of as about already being we're eye excited we're and that things the of point One some year, anticipate terms in had of

-- of for back optimistic for category traffic the about year. through So particularly the half in general, we're our

Steve Miller

with targets within relates new line of achieving productivity, months stores XX margins store the is talked previously in about it we're perform XX%. paybacks we As that which seeing four-wall to and

performance consistent The in were the across seeing QX, is productivity store period number QX levels. we XXX% our talk prior of store that we're our So about stores fleet. versus and at

And fleet our as open productivity across that in entire metric a really we is a think period. it's calculation, that given about

So, with QX average making a of up in average stores XXX, stores is mature opened chance metric, year existing QX a stores, XXX, perform. opened stores because of this that of stores last and productivity had in year to new blend and which existing the bulk of they've

levels happy we're that And retail we're particular. in very existing and fleet seeing so new with productivity the of across our stores stores

about about If excited of L.A., and some continue business about opening new excited we've perspective, about we're markets we're up an from stores to existing York, existing we markets the New And Dallas, talked in Chicago markets. will think that significant drive there.

But productivity thinking of Neil From new can quite performing well. color Carolina round and it performance market your Jackson, as us to South one additional level some market from how Knoxville, question excited. store Mississippi, Dave what's and new getting perspective, we're provide the and perspective. all Charleston, on Tennessee, market a about relates a out

revenue where really a see On a decline similar question, QX, to margin in expecting December in is QX orders season. QX QX where that we year, we driven that as typical from holiday busy a have gross the quarter from margin margin fact the by for line last into January the of our a up we gross is your we're defer we amount which staff is compare and typically there lowest that capture into QX fair gross trend

of orders recognize deliver and We the not and and order at of delivery into we the time revenue time QX those at January placement. ship in order

next. so see QX. an we to due just from to would QX have the do trend relates comp of the heading a the similar why easier into into QX expect reason And is really Part revenue as and year of deferral I end one it that line to

full for for guidance We year are in still the margin reaffirming gross mid-XXs. our the

Oliver Chen

lot. a regards. Best Thanks

Operator

Our comes next Mark question with Altschwager from Baird.

is line Your open.

Mark Altschwager

taking Good the morning. for Thanks question.

the It Just to to like time, guidance. from positive a you e-commerce At to what down following store seeing QX. are sounds the in on versus XXX%. expecting it same stable X% improve QX. productivity you're That's flip like up in perhaps sounds

guide So putting to I imply would the end for third acceleration but in an together those two things be the revenue seem would stable. think QX, quarter high of versus

maybe just a and bit typically other conservative that of the about us? the little for year? that back unpack think as there Is half considerations So we

Neil Blumenthal

Steve?

Steve Miller

Hi, This Mark. is a It's great Steve. question.

points of couple context. a So, of

it we're positive will back the the not confident in e-com to QX, growth, although, It be return growth positivity to in we As of might year. relates e-com in It that may seeing half be QX. signs. are

five dollars whether quarters. is level the time as year-over-year will to first it's still increasing marketing phenomena QX uncertainty a in some there or So QX of which phenomenon, by for be driven

As has some over QX. that metric signs the evolved of we are start seeing that it But course metric at as promising store quarter the over of the quarters. evolve productivity, it to relates with previous will

got a to we're some August. through quarter really additional the go. in performing still snapshot in really week first it's We've the So to time as how

as and where And will the shakes that ultimately determine as fluctuates see out, the and whether that fast we above high-end metric the growth we range. how the e-com high-end it's range, of grow of at

the There industry macroeconomic some of and is in level within broader in the general. environment uncertainty also still optical

that seeing conservative across are both a put guidance metrics out there the certainly and we maintaining channels. we're prudent And I that on are we believe based are numbers So the position.

Mark Altschwager

then, update you're given medium-term. you. just Thank Progressive price for thinking category, the per about Thank is you could And growth for model the you you size or rev how that on higher who the in And us this versus customers Dave, target Neil Steve. customer Precision up in see the in customer, opportunity point, the there? maybe

Neil Blumenthal

Great. Thanks.

great Our start. Precision off to Progressives is a

that we things the our for deliver customers always of is try value. One to exceptional

So of can purchasing a how elsewhere? of quality, they get that's the but great fraction something cost

mix. Progressives at Progressives And as our Precision we a significant of up-tick, really look with our we of sort found percent

think as provides to or we margin sort about So of gross expansion margin. what benefits potential gross

versus obviously that very which offering progressive of increasing Precision our we're around offering. which the is it's mix Progressives $XXX $XXX from still underpenetrated our It's within Progressives to then Progressives mix standard increasing market And XX%. our

are household we've other Net just and to happy their Promoter not equal it. Score those tell more have And the happy if members their and in friends as customers seen also to about higher

over just feedback been these $X,XXX. And are chains independent and great, well shops going customers to has that optical spending other or the because are

So, customer it's do value just incredible sort that experiences provide great of Warby's philosophy how in ratio. line and with we on, providing price-to-quality the

Dave Gilboa

And we're also wanted are new that And that people feedback seeing, to the a around lot have percentage customers Progressives. higher consumer from this we purchase gotten us. product of that Precision is of type purchasing of a

it indication for $XXX,XXX. people across customers I And And products. median that demographics are just but the and all that where the deliver value our around we're over us type really serving of further products looking the purchase expect we that to household is premium think income great still

Mark Altschwager

again. Thanks Great.

Operator

to Sandler. with Yruma We Piper Edward now turn

line open. Your is

Edward Yruma

kind add noticed Hale over gross launched and the a that first, or guys. called were margin. Hey. had for doing Two Kind those of more any kind quick you of Good last morning $XX. of going I ones how positive of call signs impact that you you frames guys Baird. to I guess on premium me, if out are on

quarters for might vision know of then which the of now a of kind cycle, stabilization deferring you. some or And number you've the Thank there is customers care need. of an that even follow-up, they I a purchase cited seeing Are you that elongation improvement? as

Neil Blumenthal

Thanks, Ed.

stabilization. We are sort of seeing

of then sort sort Because during purchases the their then returning back back they XXXX, that the the all are purchasing there XXXX. is cycle coming in think And folks COVID where of is are of XXXX, to XXXX defer And sort a market those sort industry that in of two, right average folks the in milestone the to now X.X then XXXX. industry two right? but bounced the not hit purchased was to in question by question in years. every were glasses right that remains X.X-year really Americans I depth on the has period, of where we

in of thing the to certain We why the the haven't next know population year, actually with the to is there this potential sales, half the for world's vision. is customers year that's or XXXX, seen need our that the which contact isn't year market that one sort to prudent of away of but guidance for need correct glasses this whether we're it's be their we trying XX% back those there's of traffic that to physiological the expanding by or will only is big going rest or return for upticks

category expect customers of So we and exams around of sort rate those previous for On glasses to to sort just frames. premium return the your question, eye do large.

not seeing price seeing are resistance. perform any well those and We

innovative developed of get you'll for on. really customers excited color these And example in-house that Our like our then are continue sort construction see edit collection premium those that work with to launch. block we've and suppliers of

who Emmy and we winning of Natasha Jones, good of of We and partnered featured campaign past sort Skatebaorder with just Tyshawn the really see already to advertise promote Lyonne, collection launched are part the as Year, times about filmmaker in of the which and there. our we're starting actress sort and fall we've the the results excited to two the and collection, core

So like we sort margin premium Progressives gross a forward. going to to our for premium our of just continue be expect frames benefit

Edward Yruma

you. Thank

Operator

Brooke comes Our with Sachs. from Goldman Roach next question

is open. Your line

Brooke Roach

this in mean contribution for you or of forward? looking that for the this morning and stage? if is Good and opportunity Is for this near-term, what my to profitability a could could question. how eye initiative the exams thank at Neil video-assisted wondering thinking financial you're and you growth Dave, I And contextualize taking and learn you exams. was test about for big a

Dave Gilboa

newer exams. really our doctor or may volume This number stores model. through stores our Overall, as this into PC we Yes. we're justify view excited full-time or opportunity be complementary not view optometrists we're video-assisted full-time that in mature in out rolled our an And from exams this hire we capacity start. video-assisted that positive feedback to from stores to been small the phase, seeing really doctors efforts has add patients, enough about from a and eye to a sort have exam our to enough from of of teams, where to store really as and we pilot

OD locations gross this we a as not from It day. hours absorbed is may incurring it we to standpoint, that are a really a -- view of offer really the a financial those existing certain also get-go. full-time optometrist working without capital-efficient exams expand seven where want enables doctors to And costs We may opportunity be days enables of supplement within interesting week have scale us in us in capacity in cost stores, the a to even capacity more margin. or way. exam from to And

the as both this so, And the roll see of on margin, impact and that at the across metrics. for paybacks country as positive a of gross we look we we'll to store that out new kind stores we benefit those expect

Brooke Roach

cycled drivers you're And the can Steve, that year? guided In EBITDA on you've now XQ you you. the that this adjusted marketing contextualize then initiatives. potential Thank I'm for thinking the you particular, Great. us some hoping for how margin of about for margin you've refresh Thanks. of could lower expansion EBITDA of these

Steve Miller

Brooke. Thanks, Sure.

So, I'll a first back little this then start about of half a higher talk year. QX the and level and bit we'll at

us adjustments allowed half the in making to number to achieved last adjusted business, a to of of we provided EBITDA significantly is year the we year beginning EBITDA cost that So generate EBITDA the back pegged guidance which year, of of adjusted at the margin EBITDA is really achieve X.X% last of to year. year of but we full margin the the adjusted last above post HX for that adjusted which an margin X.X%

I wanted to So that just reiterate framework.

its we prepared incredible to terms has -- fact not about campaign mentioned the about the the by in will in less a it on Neil long-term make has awareness incenting of really awareness doctors. Warby with remarks, As that QX. part as but brand very Parker his you kick of are an for better awareness customer moment, his planning ROI, acquisition is Brand near brand, it bit in intentional that eye builds an the off only little as a stores stores, nature

we'll gross that give wanted we'll account hit brand the awareness some half very campaign in HX part so, the more into for generate to future back we in business. QX guidance feel as X.X% versus confident adjusted EBITDA the but margin fact leeway launching ourselves we to driving we HX, heading that the growth are the of for of is this the of that our put together margin And as year, and we

with conservatism guiding EBITDA to next level it of as that's so we're And why some relates quarter.

Brooke Roach

Thank you, I’ll it pass so on. much.

Operator

Our final from question Janine comes today BTIG. Stichter with

open. is line Your

Janine Stichter

wage QX. the terms Hi. Thank just question. bit hear a Good little you expected? in could for the to called for than I I know environment optometrist you optometrist. you. you around my Thanks any more in love constraints more some morning. of that overall hiring? taking speak to hiring I pressures you're was of hoping what seeing Is would out

Dave Gilboa

Janine. Thanks,

advisers located are tend is live doctors be We friendly, employer and have doctors top-of-the-line equipment continue and stores and be continue rates store retention strong be super a see our between new preferred to our The our near eye as of environment to management to collaborative. sort collaboration and of eye highly and retail, the doctors to work. where tend

hire eye So expansion. store for we doctors the that to able continue our to be we need

every the lowest business company. we're some to experience the to the be we're good fact, measuring and organization talent seeing attrition since that very the we started of In entire across ever access finding attrition we've aspect rates across at of

proud So of remain levels strongest satisfaction it's look employee say we're ever our the high. team is to and it's that that we as strength productivity been the and at so -- engagement

Janine Stichter

then guidance. follow-up a EBITDA Brooks' to just Great. question quick the And around margin

raising but the previously expense there any that the Are QX? in Is aware EBITDA other revenue. margin full additional keeping For year, just campaign to you're the the marketing be guidance you items of? you're had

Dave Gilboa

expense to be additional of. items other aware No,

no raising revenue guide margin anticipated awareness $XX.X the think that, don't I mentioning. so to the wanted we a additional -- dollar for from campaign X.X% raises expenses. there's that of This color $XX naturally that communicating and our but other million, full EBITDA And have QX million worth an is that year guide sure make and context brand over midpoint to anticipated, beyond in or any little But the expense the our guidance. we're we is sequencing EBITDA as at incremental is maintaining or cadence our the to of that

Janine Stichter

Okay. luck. Great. Thanks and best of

Operator

Q&A and concludes conference for to this gentlemen, thank our today's We'd and you participation. call. Ladies like your

your disconnect lines. now You may

Warby Parker (WRBY) 9 Aug 232023 Q2 Earnings call transcript