WRBY - Earnings call transcript Q3 2024

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Operator

Hello, and welcome to today's Warby Parker Third Quarter 2024 Earnings Call. My name is Bailey, and I will be your moderator today. [Operator Instructions] I'd now like to pass the conference over to our host today, Jaclyn Berkley, Head of Investor Relations. Please go ahead when you're ready.

Jaclyn Berkley

Thank you, and good morning, everyone.

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

couple begin, reminders. have we a Before we of

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

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

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

U.S. we addition measures to GAAP to Additionally, are financial morning's the in measures financial over be substitute our non-GAAP our for I'll Neil be it a website. with certain A will non-GAAP slide off. our prepared of us And measures. financial These non-GAAP measures discussing GAAP. can U.S. to available IR deck performance reconciliation pass not of measures and comparable in release and this with press to in that, found kick directly most on accordance

Neil Blumenthal

Jaclyn, Thank morning, everyone. and good you,

of commitment million, we out XXXX against encouraged We Driving growth, are growing growth. at our the team's margin are the EBITDA share, glasses year. our $XXX.X year-over-year, on results with to is our accelerating XX.X% and that in is strategic representing results, and pleased customers of taking basis particular adjusted year-to-date believe We're strategy delivering our while of in by the active of our to mission evidence highest deliver revenue and beginning team's working. progress growth points laid momentum initiatives sustainably, QX with results strong guidance ahead of unwavering expansion, net our these the along our XXX

and Based favorably growth active adjusted momentum each the month line year. year our us QX to revenue our $XX third top accelerating expect and guidance XX% we customer busiest of in and million as into XX% of performance, raising drove We positioning are see we continue head October, growth into to on approximately full deliver to in and our EBITDA. approximately now quarter month

detail million of will in highest basis, Before drivers grew the our review revenue I later new and X.X X.X% of provides customers. customers, an our year with Steve QX Underpinning call, a and more of returning strength increase growth trailing performance. on on Dave ended customer with the the per key that results our QX active both XX-month X.X%. in customer QX We average was active while

As maintained consistent spend growth year-over-year. customer of anticipate and expected, a each being we QX growth quarter revenue, we've as as active marketing even this has highest year, improved our percent active customer

While captures they purchases compelling we're active efficient vehicles highly stores, count which our believe highest acquisition continue customer remain customer customer seeing economics. unit growth our from the as deliver come to we across channels,

consistency we've the and and media diversified believe channels acquisition year, efficiency affords with the disciplined been spend Similar marketing of significant model of to the pleased flexibility us our We testing to our messages. in a first despite marketing the environment. media half and while stay the dynamic costs customer ability

influencer who shopping of long-time tested drive in-store customers, awareness customers on we've For example, that streaming the experience. an across helps to also drive new greater and with but This think to not only focuses Parker creative as online-only Warby new linear, store business. awareness,

our exam a eye new promising way exam capabilities, to We're direct annual from campaigns, store mail as also seeing and results reminders highlight especially openings.

metrics see retention across cohorts. purchasing to patterns and repeat continue consistent We

months revenue over even more and retention recent our serve in For we XX to Complementary most core able and marketing customers over months. a in-network progress we've XX had roughly being efforts, of XXX% made XX% through the cohort, out-of-network rate to plans. roughly insurance

a in-network this we that subsidiary wholly integration owned to Earlier with Health, Parker. with an happy Warby bringing is share of of Versant lives year, MetLife. I'm announced the expanded millions largely relationship complete, in-network additional

Given period large use and experience with our a member they average can members Parker. awareness other over plans, UnitedHealthcare we grows their that at expand and Warby expect as employer in-network per realize will multiyear revenue benefits as

guidance not next expect over have tailwind to our the it As a this incorporated a longer-term years. be and result, we several into

to their for leverage tool our benefits In parallel customers ever launched our their insurance to quarter, channels. help retail of locate it our across and with in-network us. we eligibility easily version tool coverage We this out-of-network than to teams easier for an universal in-network making continue check the benefits use to customers updated initiatives, insurance average

pay of reminder, average reimbursement glasses these often at an a As out-of-network cover most purchase $X or eyewear their pocket of pair Warby that out $XXX plans for customers for contacts, meaning Parker. a of

glasses, majority innovation. to vision continue glasses momentum in business. attribute In exam see and to prescription we investments, year-over-year, grew our in of QX, and marketing represent glasses drove investments product our our within business single core of expanding eyewear growth the streaming our business. like fleet we Second, including We and and acceleration influencer the in many channels approximately paid strategic which positive marketing, glasses our our believe improvement our XX% social, an store

there's only increase complex progressives types. and of XX% time. opportunity adoption Glasses QX, lens glasses of continues in over from sold prescription significant penetration benefit our we growth overall the to penetration still Progressives also represent to approximately more believe a and

start category, $XXX comfort of we and and visual the progressives, and at uptake frames, fraction of lenses elsewhere. a coatings, often quality what which cost strong of customers offer products precision better seen have including at similar progressives the price Within

blue contributed average enhancements and per lens We continue give customize to well options light anti-fatigue, customer. and our responsive as choice. more ability like to polarization, have also lens customers to revenue coatings The expand to light colors, anti-reflective as nicely

our as and proposition frame customers that consumer with convenient On variety our shopping shop choose latest experience. Parker value side, Warby of indicate because our insights as the style and to well

a style curated new focus with more As competitors on colors than styles assortment we building offer and and our a sizes, out materials. tighter, franchise authority,

are We same extended sizes of in offer the to retailers also the few style. one

We're sought-after this those a seeing at brings Concentric not in with starting customers launched buy only a frames Super select more types, our lens seeing tricolor edition complex them like construction also recently Handcrafted shapes. release our most selection Collection, complex $XXX. Italy, limited of higher-priced constructions to we're more in

X each of Editions Warby Poole, of fans, frames. whom more. assortment our actor, restaurateur launched an partnership their Collaborators NBA director favorite frames Jordan and Chang, reimagined we quarter, and This Collection, Natasha with Star chef Parker Lyonne, writer and designed included in notable David

Our to social relevant on launch date. outlets of media Magazine Interview like of culturally the attention our media and channels garnered captured highest engagement the some

first ever week, last our pocket cellulose acetate. portability launched we for sunglasses, foldable size with and constructed Just and engineered steel stainless premium

price While I'll Dave sold our has additional frames frames of the across now growth majority positive, $XX to talk very accessible point. it multiple the to been about And points response price all-inclusive pass still at over new our to our drivers. are

David Gilboa

Thanks, Neil.

growth by e-commerce was QX an driver highly channel. base, our improving third of The productive our store complemented

markets awareness another. store in Boston, Chicago continue support and also see category, remains we retail We Many most and in growth. e-comm of growth see growth our to our and of brand market mature meaningful New and strong experience delivering the continue Dallas while underscores largest density some like our ahead our omnichannel greater unique of believe benefit we to Our highest as us York, year-over-year one opportunities to how omnichannel this overall growth. benefit drive channels

In Three X opened metropolitan Springfield, in XX% new our suburban Milwaukee existing we significant Seattle, and believe expansions Over were markets, areas stores have expand new we of New have major potential Akron, entering Huntsville, of York. and XX to existing in store, we QX, new markets, were markets Missouri. markets. while which in we including presence operate and including also Ohio, the XX stores, Alabama, Dallas, within new only

with small optical and in U.S. last below stores, store which of ended Since the represent XX,XXX year, quarter fraction XXX-plus QX net XX shops longer-term new potential, we've the still would well added a stores the XXX of our

store more by revenue stores. this and Retail Steve year-over-year, on into driven approximately our consistent detail existing will within go growth performance new increased shortly. XX%

tenured I have teams, want have been fortunate company. to take XX% a whom of We're store moment to to leadership highlight store our within from teams. the approximately promoted

forward. where remain last and month, customers brought to a serve and prepare Just planning, holiday more we retain strategy than component ever training on leaders, as store ability of season. focused more will district a we our Dallas we leaders, and optometrists the talent We market and building believe in our retail summit FSA team going grow is X-day to together differentiated critical within this and for our

revenue our Within increased quarterly year-over-year approximately X% channel, growth highest revenue e-commerce last our we year. as lapped

see to momentum continue channel. our We positive e-commerce in

with received the QX. the the e-commerce has saw end next are increase period, quarter month quarter quarter recognized As as with September in one a to any QX, into revenue end we orders customer. upon strong of velocity the In continued delivery at that each to

sales mid-single e-commerce was Our digits. year-over-year value up in QX growth order in

Within from well returning single our glasses our e-comm both strength lenses vision and in we improvement new in as an continue contact channel, see business as to customers.

an direct glasses is growth diminishing but is purchases, previously, headwind ongoing Home purchases. inflection shared offset benefiting channel which Try-On-driven positive overall partially we've by As a in from from

with We QX, including and personalizing for transcription prescription and enhance along to particular, continue technologies experience customers online personalize results. product shopping to in recommendations. the our more capture we promising enable lens customer In the saw leveraging experience, more focused enhancing invest personalized on seamless AI that and and faster and in

continue scale grew which into a almost well In average. and industry our propensity represent the and and lens XX% QX, of XX% of Contact nature but care go lenses effort on contact remains lifetime classes. industry, highest value below is plan the their approximately this we to the value. I'll segment customers holistic also replenishment portion of customers new $XX some revenue, our driver purchase fourth as XX% attracts final of sales to The it given vision to expand to year-over-year customer billion business dive growing only our to not and of product the

the to approximately exams industry capture get in of of quarter, customers Parker, grew over revenue share more year-over-year Today, and elsewhere well and bring majority their of the highlighting segment billion eye $XX approximately the our this to which broaden us the prescriptions still of remains below XX% eye front average. of XX% the awareness opportunity the to Warby service revenue, exam their In of industry. X%

of customer in acquisition. continue invest customers and gives us a vision to Scaling our to growth strategy part our holistic care core is confidence

more with cohorts, with consistently in purchase us exam customers we've buy our As become lifetime and their across spend initial eye us and seen customers an highest complete customers contacts glasses-only and time. glasses than value over who

by In referenced exams to eye video-assisted like quarters retinal our we past, patient commitment piloting best-in-class experiences and technologies imaging. delivering

will non-exam business. than place. sales continue industry-wide, provide to continue an that We them our to we our of Scaling great higher several XX% new patients find utilization, glasses on out believe eye exam them takes have expanding location direct exam at feedback services, and business, exam glasses about the and Our QX. approximately rolled so a these stores has are we'll exam impact same purchased and continue prescription including had stores to stores in throughout QX, eye we drive

by average financial revenue lenses. review details offering I'll over to in the exams, penetration strong And exam per performance. it of revenue, lenses, now eye As eye our a and the of progressive stores number contact increased we've we've driven higher turn to growth customer of Steve seen

Steve Miller

came while revenue at Thanks, Neil QX of Revenue in XX.X% quarter XX% perspective, channel retail e-commerce year-over-year. revenue approximately million, up approximately X% From and XXXX. Dave. year-over-year, the increased $XXX.X a third for versus increased

grew Dave on As in value basis. sales a our mid-single order digits channel e-commerce mentioned, the

our added XXXX. at ending QX net new XX stores, the last up to XXX of of Turning the stores the stores, course we end months, from XX quarter the over XXX with

was than XX QX on a performance stores last stores retail new productivity opened and XX% same year. including the months, period at as greater basis, compared to Looking blended both retail

in As retail productivity stores per sales stores our store opened a metric retail newer period. reminder, stores XX or stores, change opened we months as the This for and covers define more. the all year-over-year including average in of the number of

as stores. by number new such, including timing hiring of this impacted as a metric well the openings is composition of of As doctor and store timing factors, year-over-year the for

observe stores greater growth. continue months, have For been that than opened XX we strong to year-over-year

X-wall line Our new deliver of stores economics, our XX-month unit XX% paybacks. target continue performing to margin strong in and with

months, XX was our revenue and than performance line per the margin. in consistent XX% target average opened of stores the first million, store with X-wall with For more was year $X.X half

we capabilities course stores new net the past locations, of of year, our the eye Over bringing to total exam with fleet. XX XXX XX% added our eye stores exam or

mix basis QX points overall XXXX. channel represented is reflective business, active QX active XX-month XX% and we with believe on increase year-over-year customer XXX and of of a consistent million more up retail customers, XX% trailing last households From X.X% perspective, a in From our quarter we X.XX basis. of perspective, with represents an which versus a finished

active been anticipate returns year-over-year the customer we seeing we year-over-year are will QX past the active investments. as have our see benefit for We pleased X in our be growth growth improvements in positive to sequential marketing highest customers. We from from quarters

up customer, which factors, including in of such progressives, year-over-year. eye our sales, was This mix continued our higher-priced lenses a premium and at QX, driven higher see ramping continue by lens per contact in also came We frames. strength of continued $XXX a revenue average both few uptake of X.X% and in as to exam

As in individual $XXX, household is a person reflects on one up the which basis, on noted, we at look And million our X.X%. in X.XX trailing individuals, of behalf individual if we XX-month customers multiuser order others. an of and an per serve up basis on X.X% which we average revenue previously accounts have places

optical build-outs. for labs, loaded reminder, range optometrist including Moving margin the salaries, store costs of lenses, a and gross depreciation gross and shipping, as to frames, accounts rents is on customer margin, of our fully store a

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

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

XX.X% and to and have period, shipping call. on was the strength efficiencies dollars. term Third continued in labs earnings quarter optical long which year-over-year in lenses provided line are and our we offset the basis, than to approximately with in XX the by profiles the year-over-year basis over margin year contact margin gross ago in profit but last lower driven gross On accretive compared owned glasses eyeglasses, and XX.X% our gross growth exams, adjusted eye customer a color points down medium

care portion addition rollout store advantage That with of and fixed year-over-year were more than of vision the the primary of sources took and of occupancy doctors customer cost original of strong associated a the quarter. scaling Within basis. strategic a our our driver of candidates decision retention and for lifetime modest key we of more de-leverage is Investing core part care time. hired optometrists pipeline in on vision in holistic value to over a holistic our goods, our offering and a plan

the exams, these basis increased hiring and basis, a as portion stores business continued margin goods, reflecting higher fixed well of the growth as of QX anticipated contacts in XX points, mix opening decreased representing lines. On from by by from for cost eye driven optometrists XXX sequential gross occupancy of strong a a our deleverage and new quarter in

compensation for business marketing and for components. overhead home and expense our X SG&A, includes Adjusted experience customer spend, retail our headquarters, general a SG&A or costs revenue. excludes SG&A came third QX This in million like revenue. XX% noncash of XX.X% at SG&A the of adjusted or Adjusted compares $XX.X XXXX expense. in of $XXX.X to quarter million Salary program, gears SG&A employees, expenses. main including to Shifting reminder, corporate our as stock-based try-on

of disciplined QX. a signals adjusted that to of and acquisition revenue SG&A, increased strong marketing adjusted percent revenue adjusted or XX.X% Total up leverage from adjusted have revenue into we nonmarketing spend XX%. reinvested a or The given X.X% was from SG&A expenses our XX.X% by continued upside of in non-marketing million up $XX.X XX.X% to million marketing as as September with of corporate portion management in SG&A demand into Within $XX.X year-over-year. revenue declined X.X% as deleverage expense was from offset just SG&A customer

XXX an $XX.X EBITDA the X%, or adjusted to EBITDA $XX in adjusted now adjusted of million, Turning period. of highest year-to-date. basis of million year our of points revenue which in ago representing EBITDA represents compares X.X% This adjusted expansion, we generated the margin of third adjusted approximately EBITDA, to EBITDA margin quarter,

Turning in which were sheet the strong generating for in $XXX deliberately approximately a our cash now $XX operations. sheet, reflecting quarter balance free support and growth flow we balance QX will million with we cash, to our quarter, ended and positive position million consecutive the continue deploy to sixth to

We $XXX million. also have an $XXX of undrawn credit to million we can that increase facility

$XXX of year-over-year and XX% year strong our growth. million this quarter higher margin $XX Now to to revising our in revenue range, to approximately of EBITDA our our stores performance the EBITDA quarter on approximately $XXX open of following. fourth basis X.X% third of year-over-year full we XXX XX% approximately guidance on an points to new outlook. million midpoint so Based to we are at And Revenue million, XXXX year. or the far, equates trends expansion. still adjusted Adjusted the to of are which track representing XX

it to stability of in as guiding As percent in gross a margin, revenue. gross mid-XXs relates we're to still the margin

QX of QX following a driven reminder, QX of last Regarding into a QX, margin, typically we December X margin weeks from see the year. the sequential in of to as a gross from gross seasonal revenue deferral significant by decline

ongoing percent keeping teams, in consistent the in our in and low achieving a by while approximately spend look XXX be will in year, adjusted to We basis expect EBITDA Similar to gross we declined where pattern to QX store corporate by staffing efficiencies teens. the expansion similar points as experience continued last margin driven revenue by customer SG&A, marketing of leverage margin anticipate within QX, and leverage supported quarter-over-quarter. expenses

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

With for of $XXX bottom growth X.X% an the of approximately quarter, please again respect $XXX million this you following. to XX% our margin to pleased XX% represents the between I are us perspective, the midpoint to EBITDA to guiding adjusted questions. that, guiding at year-over-year. the Thank and approximately With for Revenue line million, Operator, your take morning. which of range. Neil, Dave and we're line we're a to Q&A. fourth From joining open

Operator

first of [Operator comes from Our from Instructions] today Sachs. question Roach the line Brooke Goldman

Brooke Roach

versus remarks, commented In marketing sequential separately, And the and year the times can seeing you to specific your marketing attribute vision of actions do you little within provide business? much you elaborate you're that prepared that and about that as moved on throughout efficiency overall also a color the into industry drivers more on into October. momentum few about out How own move you then the finish as you spend Can you're a momentum? sequential thinking and how the bit care taking XXXX? you of quarter

Neil Blumenthal

to the speak in are really we do years dollars as confidence beginning since the we marketing right and we've company. building the sort happy saw strength How that channels the right softness ensure across with customers. seen to to we've and of the us sort then, And ability of going of have able that cost spend, maintaining do disciplined be We Brooke. marketing that And always we're per the deploying future. effectively, really of of the acquiring our deployed as our acquisition been be we've think July. we We've last into make about right to we're that seems our over rest guiding dollars discipline, across sure And been some as we our X.X very customer. as principle year the And we're since for that's gives Thanks, marketing as the our sort and performance which our and we scale to That's categories. to retailers, focused other increased marketing on really spend. QX. continued efforts in sequential

David Gilboa

ahead active pleased add we've last to XX.X% off percent just Brooke, seen a really and of with And Neil be in important to One plan marketing the paybacks. increases the in anticipate growth, as few margins certainly velocity put momentum strongest seeing a terms QX to low XX.X% we'll X-wall wanted to of QX we've that of approach us would spend From is we that, metric increase last the areas active expect teens. customer every holiday in from demand momentum there, have out on see of seen out. quarter we what also spend a efficiency And line very year from in customer into seen building on revenue and in to very that quarters in we called revenue. we that in for We've sequential perspective, X the targets that look moderately which FSA as we're QX, of to growth continue very we see that in we've that customer being in growth, color. perspective. XX-month marketing to perform a of trending out mid-teens continued just business, disciplined quarter we prepared additional want certainly us. but expiration, percent where this of building I as still the in remarks a an which to and that that We've the is seasonally said, in stores some active within seen year. I our e-commerce, called XX% strongly, our and an increase we QX be a year-over-year towards as in

Operator

Dana Telsey Telsey of The the next from comes today from question line Group.

Dana Telsey

happening it some lot goods China. imported? to pricing components glasses, How do on much sourcing source about you for are lately. What Warby as how see think election, of think opportunity you about the think And percent And to do China? a that directly from Parker? What think tariffs. you about smart about are I changes the How then from tariffs? regards end the heard you with As another do consumer? note, adjusting you in

Neil Blumenthal

been navigating ability each internally to we've this and increased continue do regions sort our our but been situation have COGS. before, and environment. tariffs over Chinese obviously We X not will into much as to possible. of further and experienced and materially manage confident in so. to vis-a-vis as It's And feel this we Dana. in planning last Thanks, sort at produced trending from this flex goods even tariffs work we we'll the to the China. of the lower early to days reduced other vendors last our with We've offset we much of ability We've known the XX% And around sort year, believe X be current of very years, of time, exposure have years.

David Gilboa

of glasses can and advancing. components. all technologies the adoption in always to on the original need good miniaturize of is AI then speakers, tech to the so a last cameras enabling their smart face. discussions the pretty what day. we anything will for each so of be and over other very to And that phones because sight. the to and given really wearable, willing utility context at how with are put are in opportunity form have us transform complexity much we're provide the They're prescription to companies by provide see amount AI to smart the they been only information of to plus, glasses about technology people's potential complementary all working have glasses, on look our in feel on we AI that bar how a regardless to And good any And staring the to been faces. also researchers with wear the But those available, years smart and excited been smart particularly decade uniquely they Consumers bigger stop will any enable look, information that high weight that hardware we've glasses wearer other advancing. have and know batteries, and are time. is, capabilities still coming various of engage useful catalyst And believe the But of excited to glasses continue we've available embed we and smart quickly and how for glasses, the real

so And as the across digital doctors, we've that years our optical lab made supply and look our over of XX-plus of distribution chain, properties, ability believe some capabilities, stores of investments our we I in hundreds enable in deliver brand, and be last ahead, investments to hundreds to strong we making and the AI in our design the hardware tech experience very best-in-class mentioned. been a large customer have to us that partner companies sizable category components just the

few emerging an role to usher smart day wave And ready the play have category. so in in we of years important expect that first are glasses the next we this that consumer will believe for all wear and

Operator

today of TD Cowen. Chen from line Oliver the question comes next Our from

Oliver Chen

momentum in the October value. see on traffic, happen had that fairly modeling? think you to also, as will how complexion was prudent consumer? investments forward longer in-store, store traffic, well. relative plus that Regarding your going on looked and the we I the as a to gross about by modeling e-commerce what driven you've Also, lot thoughts would was the related thoughts great like as margin volatile just would term love And the X love doctors, order I if you about think of

Steve Miller

is This for question, Steve. Oliver. Sure. Thanks the

doctors XX% all XXX serving why prescription we've glasses eye doctor have our the and in coverage Roughly doctors same customers. investment XXX of across new and we eye same as are of stores exam. an eye increased about, coverage. time got such a location strategic an we view As our XX% roughly that acquiring where at or really It's individual have talked purchased fleet hiring at eye the

to are land comfortable margin margin, earnings continue where gross we as margin And so year. we'll this we settle for to our to next year, seeing talk On in provide out year. when color the mid-XXs gross about expect very we gross QX call next

of within the of our talked eye including takes our think costs a build-outs, our lot cost our these frames, mid-XXs of puts cost able X like salaries, we all of store in we've goods, been about in third-party our in and able maintain rent, about, to product As labs, all of guidance. various we that store some goods optical cost to such that put which you depreciation of to still there's of our addition We've goods, manage the factors lenses. doctor been

contacts, business, which but contacts exams While the the accretive gross portions to continue ability talked which in our this have the opportunistic metric margin Eye in and to area focused to our category as longer particularly would hire X the that higher we exam-generated is a lower acquire customer. can margin we're for both look to we've talked earlier prescriptions, in because that eye to scaling is hires about of more i.e., make doctors, leads strategic are serve eye and eye which you sales, exams been relatively doctors, term. is gross new and keenly issue I on. we've us particular, we dollars about, profiles

Neil Blumenthal

of year, year growth, as channel's And which year. comp about QX the last dollars last we toughest was quarterly was beginning we marketing sort from comping lapped higher think the positive growth then last as of e-commerce

our in as to in delivery that orders We of next continue the one quarter as the period, receive and quarter with e-commerce end momentum revenue see are customers. positive recognized to channel, upon at any we

it sort in if a great at we into velocity, about continued strong have the look e-commerce September, think in each that's with performance, seen we as month QX the of quarter end to And increased and channel momentum. we QX. Just

strength was about that. the What that see didn't into October experienced think volatility QX did As we we we in in QX. general, of we at end continued just see

Oliver Chen

by store behaving? you going How is and has the and/or been that how encouraged backdrop traffic? the for Are strategies consumer

David Gilboa

Yes. In QX. general, And by tick kind velocity into we that both and QX sustained we has saw through of e-comm have stores. been yes, midway and traffic early and order up encouraged across

us say probably category I'd mentioned, in it's to sustained call just Neil As demand. recovery pent-up or the early a for too

and in doing But job that this improved we're speak for others believe at channels industry data at look come. business, to better not. some great both traffic that our we years demand we'll have outperform there to is data As continue are that and our that to and growth and across driving points trends category many and seeing expect peers, quarter team a have

Operator

comes today from Altschwager line The Mark of next Baird. from question the

Mark Altschwager

is things, optical than know first showing different the the XXXX? And any said quarter. your perception in moving ask expectations. Amy It the I for than your and Mark. you components can margin sources shifted you overall Can optometrist pieces data gross expected, on Teske margin wanted the sounds of also I to on that if the the overall you This in saw to and of about you modest of pressure those different industry? expected? your here versus through thoughts provide early health but was could walk gross half just any line expectations was different were more then hiring but speak you for that us with like you

Steve Miller

our relates of Sure. This it with the gross margin take is in, line first Steve. part came I'll expectations. XX.X% question at Gross margin. as really in to the

we new we've occupancy sequential QX our areas, on York expense moving call, in stores main the categories. up end QX we a points an a to We of perspective with in QX pieces the we stores year about on we with basis, last point, in opened a guided falls opened folks as to up. up QX urban would of As talk different. a year. ended XX We concentration line shift to occupancy saw we where in from where New I talked thought up If were really within moderately basis opened higher last new that from really reference particular. We are following One stores into new expense. which number is highest the XX this about

important of which in us exam, earlier. who as margin We an enabling some Parker. contacts, contacts optometrists. the and the a ways hiring many are at as for We had to and lower are And also and eye customer holistic are discussed Xx have and a businesses, eye pair to season get year. a the strong glasses a valuable in purchase lastly, initial X.Xx from profile, customers Holistic course in serve Warby see relatively an deleverage really way. purchase exam individual more over of of scaling gateway becoming we newer but customer Contacts a an continued roughly valuable more view a exams, we of exams eye over to

so in in important ODs, the of hiring is investments another And the part long which will we believe off story. pay term,

turn the to it perception of health industry, I will terms In the of Neil. over speaking optical to of

Neil Blumenthal

it's mentioned, if demand. significant in too change to early there's say Steve been As

the We industry of continue sort us to way in grow. dependent is on manage a to not for trends that business

our believe elsewhere, can deploy products price our more for experiences, customer dollars which XXXX. continue to to we continue apps. deliver to we We value, everything website it if a it all share. is was and And fraction and continue to we stores to deliver with and $XX the efficiency as to We'll continue as exceptional market true of of can control, what we across that's continue more channels today we We'll outperform what included, we gain that win. when drive to control is that ensure exceptional traffic marketing and launched find if to the we'll goes market. and and in you that typically of to services, as products continue our And continue to diverse

Operator

BTIG. comes today line of from Janine question next from The the Stichter

Janine Hoffman Stichter

know lot there's pieces to a business. number. moving I want in e-commerce that X% ask about I the of

those stores, the back see just you Maybe of channel. new open if later You see on in about you perspective And customers curious those e-commerce you channel new their acquire see the stores, typically deferral. think to lifetime? mentioned what growth as you come medium-term if how customers you the some then you typically to the

David Gilboa

that offering seen that. this we and see to e-comm we've growth, doesn't yes, comment believe out try-on we're encouraged while year, that Yes. channel capabilities e-comm virtual path those to try-on the channel. just lens deferred customers to we continue we recommendations that customers call that and channel. and to doing strong we're we'll in e-comm for growth and positive strong And relates particular, tools don't side beginning a continue also purchasing on sophisticated wanted of in revenue, to seeing At meaningful glasses And by reflect on a it to the in as customers dynamics typically home the that the a best-in-class in seeing contact on our we're in return so. and directly that growth and like see QX our And goal the very momentum to result, our recognized stated the of necessarily some revenue to our we're that we're as and do the growth without channel we leveraging now do was continue

in shopping to channel and and in and tend to have see we and they the to then we We relates But to on replicate customers tend make back it e-comm, purchases of number As a initial purchase. a retail find customers see great that coming want first first repeat their purchase store to customers experience after make a online. made experience. there fair go that subsequent do place. they do their that stores They where in take

Janine Hoffman Stichter

insurance the then you a add for Versant potentially think And maybe there's like in multiyear on benefits. and year guidance that But what the follow-up understanding and not to a partnership, year partner. the that's Health next benefits about when on this just looks just how Great. new typically

David Gilboa

need and year time customers it of that is those benefits And able previous that for to the in more the time to depending increase eye we've over as of larger our that to and see their use we their and multiyear are the period. passes per Yes. What been population be our next a the from that We're us. where patients purchase we they excited benefits with this able with customers steadily we about of generate number enable tends exam. lives their this see integrations, much on integrate member integration, leverage they point revenue takes cycle, a to partnership in-network when to

we're place that lives these take And so with to new well. as expecting Versant

a to will that, that end pleased from that be we're this this we but of with the integration benefit And year, those so yet tailwind from lives expect can the multiyear and towards starting have year. benefit meaningfully

Operator

Our Citizens question from comes Nick today line Jones from JMP. final of the

Nicholas Jones

if I can. Two,

-- basis? that that question as annual you to taking you in-network open to around can around take do What bigger? playbook First, accelerate maybe you I to comes lower takes to year. anything awareness and in of And could there to there's organic understand an plans puts your kind second you Is of of the getting awareness you anything is in-network awareness maybe is takes, speak works get are kind have stores. as make on? somewhat higher? of Or XX the the that stores for control communicated and to to Can think Just maybe on clearly, folks? trying And you folks. a open challenge accelerate the insurance the would if integration. you what kind a want particularly as that it's Or the that puts maybe

Neil Blumenthal

plan those. going so stores least and forward, to we open We anticipate question. at your XX opening Thanks much year than for don't a fewer

not all We're insurance events. across we something about continue. as we is things is do partner expectations, lot coworkers. within to and but to we Vis-a-vis It it category. there's great to use employees Our tend marketing how a to on optical and stores can in frankly, of to and in-person stores focus we we XXX-plus continue given of in our sexy highlighted that categories. teams. our through lot metrics, rollout we store us which that tend that with outsized store We'll with happy partner performance such and only that to do inviting in in-network get options, partners' ways view something they're to few events providing perform this. best-in-class sort will really have our line stores carriers. to a further about, awareness materials our industry, country. preferred and relative in-network benefits to offering insurance kind and do might with attract now the as and have their raise the that companies training also apps retail try teams, our they site we a in But in of insurance partner business do new and a they our with and, managers how traffic We think One And others our as stores a benefits a of the is for brokers speak across a portion of that within

Operator

your Thank you. question-and-answer concludes today's all participation. concludes today's for This you Thank call. and session

your disconnect now lines. may You

Warby Parker (WRBY) 7 Nov 242024 Q3 Earnings call transcript