WRBY - Earnings call transcript Q4 2024

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Operator

Hello, and welcome to today's Warby Parker Fourth Quarter 2024 Earnings Call. My name is Bailey, and I will be your moderator for today. [Operator Instructions] I'd now like to pass the call over to Jaclyn Berkley, Head of Investor Relations.

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

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

David Gilboa

a we're Jaclyn, our Thank QX, XXXX. and that morning, to proud set quarter punctuated strong ourselves, everyone. growth and for report by good team ambitious you, In XXXX, highest goals we since our revenue delivered,

and glasses meaningful is celebrated all while for and in plan while XXXX increase on strong gives this growing XX% this profitable, We opening our strategic to XXXX. years focus we by contacts millions set positive sustainable in unwavering growth maintaining of EBITDA XX%, was XX% drivers growth, an achieved founding execution exams in on as approximately accomplished us when and We the growth, this resulting growth believe a customer XX of respectively. build accelerated growth and momentum.Â This and lays driving XX% business come.Â We be confidence versus adjusted awareness ahead month, basis driven which EBITDA for people we our industry-leading we foundation and first while growth by quarter brand year by since and affinity in delivering to spend, year, look full unit XXX strategy, years our today of in a by we have consecutive XX against our conviction ago, to vision of we we our experiences business delivering impact and growth we marketing sought vision long-term primarily making Parker Warby e-commerce to second years that value. remains who lives our expanded new We holistic vision our while maintaining the at and stores The significantly will the set before. and we care out hand-in-hand. committed in-network drove the time adjusted X, revenue do. and economics more core pairs last ever to while need. out XX we by great everything our increased in glasses above expanding fuel improved investing For revenue And go of at to that all expect initiatives than points for From day saw provide in to of aspire margins in XXXX. we accelerate insurance exceptional since This and years heart active year. the be every can we to today, even We for customer customer progress demonstrate

expand largely population XXXX, a over will lower-than-usual an we ever believe pricing tremendous to we beyond, to has for opportunity. are we by Despite brand, and estimated believe while our of growth estimated the our rise come.Â In customers inadequate in vision, product omnichannel customer responsibility as billion, leading with $XX over innovation, all the large myopia are tailwinds the complex XX XXXX, barriers, continue remains service. sustain it's few need optical rapidly because and believe there across we tremendous market last the proposition we value category.Â The and next innovation we at its assortment, world's built presenting taking profound conditions, U.S. few our to corrective offering quarters. our both underserved industry about continues market And over incidence have years the well and to that positioned structural and and proven limited the as think we momentum in plan years, and team and are half that As last of resonate years share of

value to stores further and that continue ever, expect to strong top customer investing opening EBITDA more than We adjusted and customer our exceptional by delivering unbeatable acquisition, drive line in experiences. insurance business, products growth offer introducing scaling

to start across cover spend different our revenue. tactics. team in plan invest we while an of these efficient we real-time messages strategic the significant to as more to efficiently growth. before growth goes drivers to and customers, glasses, even and into We largest our customer-led media XXXX variety teens across spend. confidence detail results our plan.Â I'll efficiently channels, strong and will XXXX, able XXXX, to investments and several data-driven excited inform and percent customer low traffic scale our I e-com. optimizations. have leverage and were see in key as make a it XXXX invest we're In marketing our XXXX customer opportunities marketing to with most of XXXX a maintaining continuing acquisition.Â We and channels analytics in XXXX by model plan these across in Throughout marketing both remain our drove Neil evaluated to in believe We of advanced and to retail mix enhanced Now scale dimensions, awareness brand more decisions.Â Stores spend priorities first us strategic drive results financial more QX give on Steve And growth XXXX to including

towards Our the trend retail up that this was store largest help XXXX observed markets, brand XX XXXX our we greater growth of density for additional we growth throughout One in existing will and skewed was market XX confidence awareness. drive e-com reinforcing markets, density from awareness. many benefits highest our overall openings believe planned year, in from therefore, and that market

we campaigns awareness customers included that across more the drive to results find best intentional digital continue and for localized the our the channels.Â Last from happy channel. saw marketing market, our mail We to them better in encouraging of it more media direct growth that is we And year, have ads. through local store are

repeat also acceleration Chamberlain the to reinforce These campaign in cohort.Â Our press, with greater customers an We customers than the brand driving in the months we year. of as business. validate a more ability to with XX% media who was approximately brand including generating and Parker collaboration initiatives serves only in-store and over insurance insurance power helps complement a purchasing awareness traffic with these rates revenue our improvement of online-only of Warby clever an QX.Â Earned for of This Solar traffic XX look in be patterns and Due customer to think of do to XX Strong year, powerful will efforts, our while retention repeat Eclipse driver moments drove to year new our awareness customers, business over months business. channels, XXX% power our high-impact in as throughout to XXXX that but our acquisition and drive XXXX of our further connect to new purchases retention an ways. this part transformative value meaningful traditional engagement. for significant expanding Emma long-time continues a XXXX and powerful not access our like customers higher with purchasing. and brand

sets XX we successful coverage integration utilizing care our member to as this increase. lives, market, but in a the and expanded long-term opportunity Parker. stage our customers significant utilization over see scale Health, position serve of average for the believe We more only vision million not the unlocking per benefits revenue With at their expansion also strengthens in-network Warby Versant to we growth

Utilization we or Versant already with are than is and non-insurance on While more a prior integrations, carrier business. spending customers Insurance still percent seeing initial returning members. it line selecting customers, attracting more in their promising of higher to value highest tracking new early it our customers ahead days, lenses of our of at continue frequently. progressive is be rate purchases, is and slightly trends some higher a from

pair an we pay about have across that average benefits member customers their we In and $XXX cover we our will think pocket contacts using glasses of of greater Parker. of driving parallel, meaning continue to purchase at educate into out-of-network or existing of $X awareness opportunity XXXX, for Warby move focus out estimate reimbursement Right now, while eyewear around to XX% out-of-network integrations often scaling customers we plans Parker. insurance at As their Warby a for bases. most an customers their vision there's these on

in the in prescription throughout by as drive from on deploying our enhancements business. Progressives priority of This XX% glasses it particular, the growth as year-over-year, progressives, in majority there's that grew of in we upon vision represent X% strategic the well prior growth lenses see momentum a prescription our time. continued look by we'll to single-vision the time, QX. is driven spend next to glasses in same in XXXX, Our single approximately up In believe XXXX At build lenses, increase and of expansion targeted acceleration to in momentum year, in in represent sold vision XX% driving and only still glasses further which encouraging over lens the types acceleration an significant penetration single eyewear units. overall approximately media and and year, opportunity our to building glasses, was both progressives. XXXX, complex

sizing this we in our in come introduce nearly authority colorways style frame expanding, and year. and customers reflects a our new who As the to to and newness variety to leader From collection a industry. styles XX constructions, and to and style commitment curation collections plan each innovation, as delivering novel us to

a franchise and new with gather focus than Because in-house positioned Our our react direct-to-consumer assortment competitors out materials. can to and curated and team colors offer our uniquely paired makes design sizes, more feedback. tighter, building to model this, with styles own on of we us customer

our and As launched an month, $XXX we lens of example, available this first-ever starting variety rimless in assortment a earlier shapes. at

requested retailers could quality complex of sales of majority and this far introduce and below our diligently a today. intentionally we maintained worked we point, which to Since launching shops. most key price point frequently intricate our optical customers a ensure styles, represents price construction met value and at that Our rimless remains XXXX, the $XX and our other in part we've proposition standards

accessible pricing, recently our $XXX, offering continue offerings introduced price $XXX to $XXX and we plan in While our to intend we expand $XXX point.

anti-fatigue, to plan also options alongside in lens had We more core an sun and with expanding introducing success give to Last insurance offerings, in light higher anti-reflective contributed colors our add continue expansion to which customers to to per retail blue expanding polarized closely customers. penetration our average the in customize ability progressive's our Progressives lens year, and enhancements even light tied and lens is are our responsive, we coatings XXXX. like choice store revenue customer. as increase channel

prescription I'll eye will turn addition integral vision exam And to that and providing new to include couple we last the of XXXX our approximately strategies. with purchased glasses through to XX% Neil acquisition location goal of same talk are open in over holistic eye care takes are customer channel capabilities. it now holistic In place. exam every efficient our care. Consistent Industry-wide, an store to stores our years, at being of the vehicles, advancing

Neil Blumenthal

Thanks, Dave.

can still to penetration significant we the both believe markets further to than in the longer of for of XXXX ended open testing U.S. In and plan the XXXX, the of engage a partnership come, commitment plans more model in before see a For our open expect come locations, XXXX representing shops while opportunity customers half Starting And first stores small approximately with the ways This to an XX,XXX to to new for existing exciting majority our the we than we we in highlighting XXXX, and years fraction XX with Target new X XXX industry-leading are priority, more exceptional initiative optical set third ever in convenience our invest retail, stores term, year. with customer open including new stores. scaling for growth existing U.S., with our of and reflects expanding customers. our we for while access and shop-in-shops both delivering new from second we to in where further experiences. omnichannel to XXX

omnichannel of best-in-class and expand opportunity like test XX new engaged suburban markets, will year know a experience expansion. as while early services native a Warby the and with Parker to in Parker and for to continued customer to customers phases, offer be who exceptional and in vast those open us X introduce Warby expected on needs, existing shop-in-shop may our know their majority before, The format strong tailwind we with as still consistent to We live stand-alone while shop complementary Warby to have we provides focus open new continues even strategy. shop-in-shop employees known work. these with Target. already our customers products maintaining stores stores for. with we're to incremental not view a Parker is a our our to plan channels enter existing the that to and is company reach Target to everyday opportunity Parker being stores be be and We by and to to explore learn at Each and an its many customers retailer where advantage Target partnering valuable staffed across and in are digitally this broader of we ways our We partnership overall. of longer-term suburban new accessibility this able One at today. this plan areas business While and markets a branding Warby more

within store For target cohorts. in paybacks we months. our XX% We XX the new remain given continue to margins and consistent returns X-wall strategy confident see stores, growth across we

high-touch digital glasses enhancing is growth. next continued this fueled become optician scale, to have introducing focused reimbursement. the experience are A than a to In and upon store to upskill teams, Shifting e-commerce into mid-single higher within prime of to we that offer in requirements, continue AI investing the XXX in more growth our our channel, delivering but opticians. and key delightful a our fostering Since of year we is and our not our experience the are example. anticipate business. is our the investment retail apprentice digital tuition store retail growth opticians in approach to even shopping certified our XXXX. contacts provide with ongoing with than will with also and and members our strengthening saw platform. the we who personalization program we improve from starts momentum become building opportunity program, to ourselves e-com. Through team experts service. long-term consistent, licensed in core people. in staffed priority digits, this for many XXXX, full we state on experience inception, the by train, online a driving associates brings often hold We As We of era to cases, career leads only best-in-class Through every growth e-commerce be guided feel alongside our standard the provide program, our stores the ensuring program's Promoting

other needing customers are features industry-leading recommendation to feel journey help provide preferences features engine shopping out will home experiences perfect new wherever of use do engage customers try-on more help their including scale are tools, engaging, gives virtual AI customer We By which without and AI we our months, AI-powered in conversion few this product drive and and to with a and glasses designing iOS an and confidence engagement. aim a deeper of making selections already suggestions. our leverages in so. and to even to tailored tool, find conversion pair designed try-on. style frame Rolling that users facial further to to us the to XX% intuitive they the confident strengthen proprietary do choose

is not driving reinforced well their engage spend significant increase strategically over representing of opportunity. value customers. year-over-year in vision customer confidence attracting holistic vision and as glasses-only our holistic care continue this penetration our and as lens exams glasses, of value. XX% offering, who but initially, months remains more reach in initial care total increasing progress, The more to more investing higher care Despite vision only XXXX, X.Xx to business holistic across revenue. approximately after industry acquisition. purchase growth, our XX the a customers below lifetime saw Customers and strong spend contacts with in a well customer services us time, In average, in we'll to to products high customer our expand their continue which lifetime Finally, XX% XX% new X.Xx compared and our contact

driver, to to only drive acquisition. the of customers, beyond. glasses are Approximately XXXX XXXX addition customers attracting Not replenishment of but contacts go those with see contact further we lens Warby XX% a being also on In an expand purchase in customers many given customer product, nature in of we new the and retention to to new new opportunity Parker. were this

been exams, of contributor within to expand the bringing our to prescriptions Warby approximately to XX% grew exams elsewhere a of Innovation revenue. expanding now the their customers highlighting exam exam and long-term remains we In eye video-assisted has XXXX, Today, remote Parker, with major key X% our connect our customers Another eye and opportunity. business. which priority are eye year-over-year eye business, in accounts their growth plan getting doctors. still which XXXX majority over for

of excited us about drive to which as imaging on and focus sales, our patients. coverage optimizing out the of non-exam plan retail as which per a XXXX, more growth over our in gross to more been services provides adoption high-demand average we've Early customer, XXXX progressive embedded to lenses. driving margin contact it conversion and maximize patient to than within exam and plan. the eye exam advanced increased offering offerings And I'll touch dilation. In without these We higher seamless diagnostics stores to is XXXX revenue, we've customers find financials leaves that retinal exam while and seen pass offering enhance of efficiency. And locations, driven to We well in stores eye Steve performance further as revenue also strong, growth. on awareness locations by roll exams, experience the that, has our number experience for while potential lenses increasing stores with our the strong

Steve Miller

with Thanks, and begin fourth for review XXXX and year our performance. the outline full first our Dave. I'll Neil and a year quarter detailed of XXXX. quarter guidance of Then full I'll

full customers, from the XXXX. marketing improvements to as customer first investments. since finished are growth our we benefit first with an representing pleased Let's the year XXXX year-over-year, revenue came of trailing On e-commerce results. a retail million, at high a XX-month returns above for for past $XXX.X from XX.X% see guidance increasing with of X active its increasing X.X% increasing and positive quarters up sequential X.XX quarter and $XXX.X with We year revenue year-over-year was in e-commerce basis. we the QX year-over-year, million year-over-year. into basis, jump Revenue active XX.X% year-over-year with X% full our in We've up seeing year customers. full fourth positive been Starting XX.X% million, year-over-year on revenue year-over-year, the XX.X% and increasing growth X.X% revenue increase of end retail

anticipate customer-led we growth mentioned, more Dave throughout XXXX. seeing As

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

basis, exams, in XX%. grew contacts contacts On to full acceleration and XX% growth, and QX, XX% year strength grew the which continued year-over-year a in glasses XX% we grew addition year-over-year In exams saw and in respectively.

revenue to stores with increase count XX over XXX of This our at the ending stores. XXX new the compares We store the Turning end added last XX XXXX. net to from of our over the XX.X% growth of same the year retail months, stores, course XX.X% period. up in

the Retail per So stores, of the stores the the in cohorts. including was We and productivity the change our all as or more new same XXX.X% the and productivity XXX.X% opened we covers QX metric continue for XXXX. This growth and to period in sales retail year-over-year of of mature last for store our be period. stores retail pleased stores productivity number versus year year define with average opened in XX months more. store full

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

been For months, XX full the margins to opened XX% with year.Â Our stores XX-month greater we have performing growth our paybacks. new year-over-year than line economics, strong in of that observed X-wall and QX in unit both target deliver for acceleration stores and an continue

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

past of of XXXX. basis capabilities retail to exam a our our the XXX with or XX% eye exam up eye year-over-year points mix overall in versus approximately net stores we XX% XX of channel Over stores our locations, XXX course business, added represented fleet. From bringing the year, XX% new perspective, total

to to gross to improvement see XXXX. gross versus margin. on pleased were margin We Moving

for store optometrists As margin employees. including includes a optical for optometrist our margin salaries, lab and a optical frames, loaded depreciation of and build-outs.Â Our gross range gross the our costs, lenses, stock-based compensation customer reminder, rent labs, and fully accounts also expense is store of shipping,

as gross period. the in margin compared at will XX.X% came to growth, like higher lens was gross adjusted as ago compensation. including gross of year excluding primarily Fourth to stock-based costs. higher-margin I lower quarter, in speaking year comparability, adjusted with gross in first XX.X% Starting by margin to XX% be adjusted well glasses customer XX.X% the progressives shipping quarter fourth types was in driven margin, the increase outbound Full For compared XXXX. scaling the margin

For our from the portion driven was we continuing X prescription at of to increase the growth, are also benefits in-sourcing glasses in orders and our faster at fulfill see margin that many higher full glasses Nevada.Â There refund holistic year full portion care of customer. core percentage and owned these we XX.X% Offsetting accretive to efficiencies as orders well gross labs, scale customer is adjusted optical factors higher York the in year, New both a and from shipping times by in 'XX NPS, part including full gross average our lower turnaround XX.X% improved margin. QX and labs rates, as lenses to our a the and offering contact Expanding our business. per X.X% increasing as full in a QX of year 'XX was driver contact year X.X% 'XX offering the revenue of continued from of scaling scaling a of total 'XX QX in vision in

are to from We the consistent a percent cost our store for we goods, of on the a rent QX salaries hired basis year-over-year lower gross for full represented they in contact a portion our lenses XX% product of market revenue of year. and for higher accretive billion lenses our percent have profit purchase a margin $XX dollars versus purchase almost cycle. Contact subscription-like frequency their gross as saw While stores. other categories, deleverage and optometrists account and optical the given was market.Â Within optometrist of fixed

stores exams optometrist directly As with expense both from and XXXX, an we of and we with the These to operated therefore, XXXX. XXX engage of stores XXX where salaries. optometrist revenue stores XXX compared the from at end end of recognize

gives eye the that in-store in exam control to the non-exam revenue exam recognize investment enables and us margin sales, greater to term higher in long product than customer as benefit it in will over SG&A. We capabilities stores.Â Shifting conversion gears results gross experience, us expect our us and

XX.X% our corporate million nonmarketing demand XX.X% corporate million of main marketing the expenses. as and includes Total acquisition marketing salary a revenue offset strong disciplined the upside into leverage program revenue As points stock-based a as portion was like of expense we signals reminder, reinvested million of revenue quarter management by or as SG&A in overhead or given to for to came and quarter.Â The of year-over-year. in decrease to revenue, try-on SG&A, year-over-year customer nonmarketing revenue retail a a adjusted home our SG&A growth XXX in expenses experience to expense $XX.X SG&A decrease from deleverage percent $XX.X revenue. XX.X% declined XX.X%, of marketing from SG&A Within customer Adjusted $XXX of of up compensation points of just of a basis million adjusted our SG&A of spend, compared XX.X% year-over-year. $XX.X costs XXX This SG&A components: XX.X% increased X compares excludes quarter. headquarters, up adjusted for SG&A was QX revenue XX.X%, in the with or as and fourth our in at spend XXXX XX.X% Adjusted adjusted expense. XX% adjusted from general or including business noncash employees; basis

million of representing an EBITDA. adjusted of period. SG&A In to the of from year was year, fourth Non-marketing adjusted basis compares full on XX.X% margin we of of the an versus X.X% XXX points $XX.X to basis of EBITDA now adjusted revenue quarter, million in revenue or in of which XXX million, leverage XXXX, year-over-year.Â Turning revenue, $XXX.X adjusted the For X.X%, EBITDA generated points down in adjusted $X.X adjusted representing EBITDA represented of basis, XXXX. XX.X% SG&A XX.X% approximately XX.X% ago

for line guidance adjusted $XX.X adjusted XXXX. basis adjusted of representing which compares margin of of an year the This basis XXX XXX we EBITDA X.X% long-term generated adding or year. full our XXX of improvement margin the approximately represents with XXXX, For to EBITDA X.X%, of points EBITDA per to million, of year million full improvement margin revenue of points, $XX.X in

by partially in to million growth strong the strong cash ended which flow operations. at continue our XXXX media impacted January.Â Turning to in million in in $X into deliberately of cash, million position, deploy end adjusted spend margin We free to from December generated sheet in contributed that and with Our to was XXXX, and EBITDA our growth $XXX sheet. December $XX a approximately now support balance will up balance we reflecting

$XXX We of $XXX facility letters also million, undrawn of for have credit is million credit. to than that $X expandable a million other outstanding

XXXX. to Turning

orders Before our December the specifics to in look that year. of our following as of portion QX profitable least expect I our of are out cadence the and and profitable want our QX late quarter to we I quarterly XXXX, to FSA-related a quarter revenue get similar of most into outlook, results the recognized QX with point as

Now to guidance.

we our we're macroeconomic maintaining on XXXX While stance have broader in our a plan, the business given confidence environment. conservative guiding

XXXX, For to of we're million, the guiding EBITDA year-over-year; of revenue revenue XX% margin representing year midpoint a approximately including the of percent to to margin following: $XX growth store mid-XXs as at million, shop-in-shops of of EBITDA $XXX XX% XX adjusted new $XXX revenue; representing openings, an million adjusted Target. the approximately range, XX% the in our full gross X with

mid-XXs includes stores slated to XX remain similar as basis in year, from Excluding a new the which margin locations, XXXX. headwind We're XXXX half cadence in stable second our gross will open the to XX with to tariffs. open of an in the estimated revenue, of which to XX the Target point are percent a guiding

globally. tariffs, sourcing our cost to our our diversifying relates China goods exposure X approximately with representing to continue increases we'll it around decisions of or sources reduce diversified we'll mitigate and do we've As with past production vendors cost total so, XX% continue We've years, and Canada of over worked making intelligent the no to and Mexico. tariff strategically to to exposure of

and we tariff structured, have As the a to going impact China manage gross tariffs forward. place believe basis we a XX levers margin currently multiple to anticipate environment XX in point to are dynamic

marketing either as XXXX, to revenue, continue to to in our into and in million, plan the XXX to in to maintain acquisition. in For allow to revenue this net as at normalize will reflected percentage expect which to EBITDA flexibility customer to or percent range. compensation to business, to to approximately SG&A We're of expenses, year which a and flow of maintain revenue. EBITDA we basis X% midpoint will revenue the plan approach including expanding revenue the the we stock-based drop of be non-marketing We incremental committed through adjusted disciplined to a our by of continuing reinvest operating equates guidance, we margin as teens low X% adjusted points we adjusted a forecasting percentage $XX a to remain preserve

roughly contributed for QX trends roughly growth leap For by to accounts which for between that extra $XXX.X revenue, and to weather. to in $XXX.X XX% year-over-year. been million million, is guiding impacted XXXX the $X represents of to due the which which year, recent XX% Revenue last be Normalizing estimated growth million XXXX, following, day QX XX% QX to to year approximately we're XX%. have

deferral, roughly XX% take Thank last reminder, line $X a Operator, QX a of please at included approximately open revenue you bottom million million, to XXX to a of of for your As this margin $XX year With EBITDA also I points pleased line that, Dave again incremental joining perspective, and to representing the Q&A. in which QX questions. for benefit of XXXX. $XX XXXX, equates the of range. growth in of we're our morning. the Neil, to of adjusted basis are From QX midpoint us guiding million

Operator

Mark Our line comes from first question [Operator from today Instructions] Baird. the of Altschwager

Mark Altschwager

acquisition announcing customer. was marketing, between per the new with lots customer I initiatives guess Target here revenue the you're to the of customer in stores, growth revenue balanced hopper growth year, Last start algo fairly partnership. off, and

you're more a how moving speak about algo on you can thinking Just forward? bit that

Neil Blumenthal

Mark. last in we've additional dollars. the have customer those of a positive across customer. sixth quarters. as we QX over did see per accelerating store that activities, our straight trends active year, scaling and in few continue. seen will media was contacts our you the Thanks, noted customer invest including variety effort more we openings, business, between benefit And last balance, integrations, investing Yes, revenue expect doctors, growth our insurance average we intentional customer growth. an of hiring more And of And Sure. to quarter made acquisition

going see growth and of come -- continue significant and customer to portion for forward that XXXX. from expect us from this strong growth in customer you'll our that that active We year will a see growth

Mark Altschwager

acquisition Maybe like on has sense that a give slightly insurance looked or Versant similar mentioned what above on that piece. I you XXXX? carrier following and other maturity to integrations. for us could expand what How partnership, you're past affecting up around. in the your and is that it's outlook prepared you curve that customer tracking just remarks of in the this the And then expecting think the in time

Neil Blumenthal

Yes.

a per increase on population the in-network a seen multiyear with us is contribution what continues that integrations able use with that prior is basis member their over So once benefits to a period. we've to

that awareness So people there's be when and contacts. aware the populations certain they in-network sometimes exams immediately with and glasses the not where cycles of us. buy effect there's And use benefits then can get multiyear between their factor an may

they tracking with what the the see we've and and customers the positive longer early what Versant. so, with more that carriers, the that expecting we've previous with generate And line is to trends been population, are and carriers. seen of integrated seen in the from same we've revenue say that or more ahead we're are I'd

encouraged And but at longer so performance a XXXX and multiyear we're in we opportunity. it that far, by this drive will so, as look the some expect really results

David Gilboa

the as oftentimes from of some discussed is customers versus in just to benefits of And mix see rest as relates that customer we've viewed acquisitions. as business. it insurance insurance Mark, skew customers of source our to addition, a And the insurance versus perspective, newer another tend returning we

where economic some will strengthen benefits include we customers in ability to our about the in more more who progressives but newer So, term, will efficient of of back And the goods repeat a help just customers like cost way. lenses, the of come are package. higher purchase, complex buying more that we've and talked long believe a then basket this which acquire part not

Operator

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

Oliver Chen

a are at and the industry Steve, losers We're your guidance, Neil, still large. winners what seeing and traffic? thoughts your choiceful in consumer on regarding

of customer-centric structure expect the the what we what's What we of terms to why That's should would your it And should any deal Target as a possible year, of more retailer. the rates vision productivity you're picking total store on sounds love thoughts So, very the sounds stores? longer the term model I growth new knowledge new in revenue your exciting. in in embedded based know of in to finally, new the plan the that Also, regarding know sense, what's we you on margin the contribution quite that are terms stores modeling and exciting. and Steve, of for strategically, stores scenarios? terms makes initial thoughts medium about? also how And traffic.

Steve Miller

to color Thanks it relates for we've continue the to over on we'll do and time, traffic, questions, perspective provided this Oliver. From so. guidance metric as a

relates at a we of with in, embedded retail looking We the let's guide our are of in as store haven't high depending performance but the it specific the or whether traffic, context but end modeling low on to range, productivity, end high-end. the you're our stick and

We are e-com. with nicely in productivity single-digit dovetails that in modeling moderate store improvement growth a our low

seen full for the traffic, Overall, periods end of challenges and for at periods and for that traffic. we positive, the guidance have baking strength some high the year. We seen we're line our have into is trend of

and will back think moderate that performance that. to top amount more year. overall are the for the of As talk it half we're adding Dave partnership, and I the the opening a year, of cost stores Target your in about they're this regarding relates questions X our Neil line into But and

Dave, test, It's we we store contribution to this of roll-out and it as other this and of the the test. a the to more really And bit turn we little next year partnership. who versus to negligible. degree expect So, can feel the overall over insight to depending expand as see provide level view year, as it on a Target more relates partnership, that to plan any we'll X why color the which we on to particularly and excitement with that and Neil

Neil Blumenthal

focused and lens, to Oliver, and exceptional and customer being we team we the perfect a lot guest for always value look customer tend tons, customer renowned a mentioned, at for to strategic Thanks, Steve. we've strategic years many sharing alignment made doing for commitment fit of now. love customers that and that. there's Target and but and us. through for as best the Target it And creating of its a a experiences centricity, around Culturally, by is lens everything Yes. known right what's their great you optical

by and known we're across managed experiences will that So, employees customer we specialized feel fleet. to run continue deliver through these Warby shop-in-shops, which will be typical our the for

X year a excited. quite we're stores. lot We're first learn this open we to So, in going as

to We So, for to we're general this. we're that that other we're looking they to thought what's going people One grow great forward and category. for covet acquire across and commitment in year we they that traffic excited category, in love new made customers. glasses our channels. of ahead. do positive the that by to and just going comping the happening since to full was in a that those products our saw irrespective that XXXX continuing the to provide on sales We're year And going customers first continue out. XXXX, spend marketing we're invest marketing and and of seek to drive and

weather but confident drawing there the traffic of some been some from As in sort QX, deliver middle that healthy see growth of our and the sort and customers. retailers, has to we'll growth and we're towards that a you've of you'll lot of by seen guide, in continue challenges great that in

David Gilboa

And then [indiscernible] Oliver new rounding question. And last just regarding last store... was your then your question out just on

Oliver Chen

productivity be expect? different prior with stores new parameters that levels should about them would you that any and these you think -- from -- what are Yes, nature should and/or the we helpful. Well, of

David Gilboa

Yeah. productivity expect. Very levels consistent what we with

and XX will new nine be opposed markets and our in openings existing versus months, XX% opened XX as all are to markets stores will margins targets roughly be our of suburban of existing Our very most so markets. The markets, similar within X-wall payback formats. urban. new And majority

and economics. plan provide location in consistent very terms year, this year describe and format, last call with but we to what how our as to consistency really So color pointing more back, our saw for of you part that's happy new of store

Operator

today from next Brooke The comes Sachs. the of Goldman from question Roach line

Brooke Roach

the you on like And basis non-marketing this sustainable multiyear margin EBITDA EBITDA is hoping SG&A XXX points margin speak was expense a could multiyear a points contributing to year expansion the of opportunities adjusted those drivers X horizon? of of adjusted expansion What basis? that's do look X I leverage on per SG&A to year. the to non-marketing

David Gilboa

Brooke. Thanks,

So the sustainable expansion, yes, basis margin is XXX on a points believe of to we basis. multiyear XXX

service incremental and continue within expanded we team. long-term we're very company, teams, only a or as whether number EBITDA stores, basis cost points, believe that as margin we middle year for adjusted basis across that XXX we're basis, a in in we as customer there's customer to XXX on staff of our points, all talked planning future strong selective will by come finding as more of might categories points. cover efficiently it non-marketing frequently. If leverage for relates the what now, right unpack to the spend about stores, spend, pay, experience those to use. there not onboarding consultants in of we're to So our of to SG&A, so in addition this view more continue that we that staff continue hiring across The we a corporate categories.Â So of but year, ago all of a retail basis experience our retail that really of basis customer third-party to And to before vendor what's we've as the relates headquarters and projecting each that points XXX past certainly fixed our new and efficiently corporate efficiencies XXX from degree year adding that by that we the in leverage to are see the the XXX this XXXX, the the of more for vendors is leverage employees expenses we to we we the any it at marketing expenses teams salaries rest general

target hit would to plan non-marketing all for SG&A leverage benefit as so that order. describe And certainly sources adjusted We of of basis that year. point we EBITDA this really in I within our from XXX leverage the margin

Brooke Roach

spoke And the you in personalization and prepared remarks, about then investments. AI

Can is here? talk industry strategy about smart technology other trend glasses. The in the you your

Neil Blumenthal

look and improves staying and offer we've that our as capabilities And latest do factor bring develops. important our real-time market. been we'll highly network, models enter that in companies given meaningful more to adoption design choose ability to have some to strength deliver Yes, an have hardware of leading AI existing components and battery to omnichannel to begins the will glasses certainly space been market brand, we life movement most of to quickly, sharing this if and experiences, AI strong just as And smart lens position the always-on wearables exceptional we investing and a customer this believe to we importantly, to wearers doctor complementary assets in as puts so. shrink close to to we to believe form supply believe chain, grow to have a the glasses, us in forward we distribution, to capabilities, looks utility expect prescription We similar the we role the play. market.Â And continue

Operator

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

Dana Telsey

offering from do think What's do points you have to the go in price be to next that? XX the it you'll along? is customer, $XXX, then average the price you per As different it $XX How partnership, the the expanded do it's about and the revenue whether how price you think it? to to ability expand Does have? prices being architecture you of from what the how are And of in-store you within the year? point And shop and are scale $XXX, see think there? that the Target you'll with the X points? that moving footage the seeing potentially that square What markers the of

Neil Blumenthal

And for glasses out behind When we right, reach effectively dollars. to walking X/X jewelry value, and treated were we into displays started hundreds the shop provide seamless of more cost. importantly, counter to experience, the the exceptional but the an provide frustrated optical shopping precious a glass are of wanted where consumers, of like company, were we be able

we've started assortment, principle our we've anti-reflective, anti-scratch follow $XXX, we why exceptional that's that expanded how these So provide can all-in lenses.Â As at price And prescription $XXX. right, we we introduced with same value. $XXX, points on $XXX, new with $XX,

our introduced value promise different right, As constructions, we've cost that frames of materials and more would continuing quality, comparable elsewhere. into of hundreds where exceptional complex dollars

and great found on and about we view is price success value, tell as friends these they their go what to to continue us where us. adoption with similar So points customers similar higher providing

partnership frames of marketing regular be integrated have will that acquisition.Â As to display can and inventory top-of-the-line Vegas. we're shop-in-shops, York resonate outside optical chain we we've to our in New Las launch X of same and to outside seen, continue with and And we customers going first points that source do customer Our of supply where the to and right, and continue consumer our us of easily, manage our of that work rather of our vertically labs to we our assortment price we stores these enables think that best have insights Target done. out think those as we've thanks sort our

Operator

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

Nicholas Jones

across of just kind deeper how other of commerce, a I year? you lot integrations guess across and hearing marketing opportunities.Â Could discuss opportunities you're thinking at social about cetera, platforms We're of mid-funnel seeing the marketing other where et of online a various thinking talk this kind media travel, channels? across about about about you're could platforms level, of you high you're and how kind kind talk

David Gilboa

invested We've we'll continue range so. do of to a Yes. channels, pretty media in broad and

lot strong we'll the continue TV to to including we and believe capabilities. capabilities. of of have that those online that We a aspect And as as ranging around critical recent who few new still media, that a linear we category. as against aware still our market new from digital social of and we've us over massive performance in in a invest Over the we invest we customers advertising as awareness recently have seen X% from to of is mail channels open and doctors, lots kind quarters, years, new company as know last aren't and glasses direct need We hire sells stores, we've seen we share assets. and an search have

channels we And new driving to and so results awareness, capabilities, And positive efforts, invest leveraging -- localized that direct we've those broad eye we channels many channels. that continue using contact noted, we're in seen social also this seeing of in results the media both customer our offerings campaigns. result various those awareness to our stores, localized exam as like our creating active that and stores, we'll variety we're as positive direct across business, And into of have. terms very drive online mail, of media a lens lens some traffic of of traffic around driving but year growth

Nicholas Jones

then of asking Got maybe a Target the on separate And question kind partnership. it.

a about progresses, Target kind the direction give kind can on Is location to of provide us in a we opening stores of about store? see color opening can that any help X kind As see there Any how the or how slower? to versus it think is Is time wait of the you line? pace it first sense you stand-alone of any and same faster, there?

Neil Blumenthal

that that these strategies. in-house developed a are confident sort shop-in-shops that able of We've of on great we'll can sort in with partnering roll capability design we spaces fits of Target lot both to move of and out our where it's manner be confident sort team and this the been we're this that love, a customers quickly and

Operator

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

Janine Hoffman Stichter

between awareness I growth open that how density more markets curious in to Can e-commerce see market? view stronger on and expand density. growth. effect with the halo you you was just growth you the as you to could you you And in speak e-commerce then a with stores hoping the point the of comment on interplay more as being of e-commerce store get and

Neil Blumenthal

we would e-commerce a a in certain shop We and time And a of store when wanted but in a cannibalization there even journey, because reflects penetration retail person, the right, and category a level that second of online. purchase so. or of think sort market, was we our And early sales. were would roughly that see sort our awareness market. online only store, in journey, is first of or the really store open was bricks-and-mortar broader could where a folks was of XX% that there There to

after awareness, happen X overall few that pie. And e-commerce to return initial what stores, stores would cannibalization, the in increase to or first So tended year geography. those was overall grow a the growth would of

awareness contacts Now more like and and -- grow these we've mass up continue That right, hit geography. stores eye and to drive in categories can open as exams. of incremental helped product we us, these channel, adjacent a more deeper has and we've to also stores we've to already sorry, more exams right, more as given to of awareness critical continue grow our e-commerce start as and see a returning customers started help we introduced even as sort

and omnichannel Our reason again, stores, in that the locations billboards both the work being as help We both between forth facades of that leverage tend not stores, and channels. beautiful love driving create can we of visibility experiences And the channels. experiences vertically our why we great integrated our those go back with seamless awareness, for a only to facades. people be but with as great drive sales on brand is high inside and the act on lot centrally a located

David Gilboa

a the to said point stores about just round I Janine, out, efficient very this are talked acquisition new customer we've know bit little one I vehicles.

at little so and mix returning customer bit little skew might online. store a more And a newer

New market in stores, but each very, e-commerce-only the to time part revenue the see And you'll see our than York also is York support in really have afterwards, e-com once for our customer markets. market process, when strong X New comes a very is we'll repeat other the So we i.e., during purchase, faster growing rate. retention purchase e-com it densest a channels for reason that XX densifies, a of with

they of Our style going go they the online bringing purchasers found back e-commerce into comfortable next to process them it's store a purchasing repeat for channel given to the make with really instead store, easy and to, helps the that purchase. support to like, the they're very

Operator

today's concludes This your you. Thank call. all you Thank participation. for

disconnect lines. may your You now

Warby Parker (WRBY) 27 Feb 252024 Q4 Earnings call transcript