Warby Parker Inc. · NYSE:WRBY
Warby Parker — Q4 2023 Earnings Presentation
25 slides from Warby Parker's earnings presentation, Feb 28, 2024
Slide 1: Q4 and Full-Year 2023 Earnings Report
Q4 AND FULL-YEAR 2023 EARNINGS REPORT Speakers: DAVE GILBOA | Co-Founder & Co-CEO NEIL BLUMENTHAL | Co-Founder & Co-CEO STEVE MILLER | SVP & Chief Financial Officer
Slide 2: Forward-looking statements and non-GAAP notice
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may relate to, but are not limited to, expectations of future operating results or fi
Slide 3: Since our founding, we've pioneered ideas, designed products, developed technologies
SINCE OUR F O U N D I N G, W E ’ V E P I O N E E R E D I D E AS, D E S I G N E D P R O D U C T S, A N D D E V E LO P E D T E C H N O LO G I E S T H AT H E L P P E O P L E S E E.
Slide 4: Warby Parker at a glance
1. Since 2010, we’ve offered high-quality prescription eyewear—designed in-house—starting at $95 and delivered industry-leading customer experiences 2. Our sales represent approximately 1% of the $66 billion U.S. eyewear market 3. We helped pioneer the vertically integrated, direct-to-consumer model
Slide 5: Full-year 2023 key metrics
$670M 12.0% 2.33M $287 237 $52.4M 7.8% $7.3M (1) Defined as net revenue for the trailing twelve-month period divided by the number of Active Customers as of the end of that same period. (2) Non-GAAP financial term. See appendix for reconciliation of non-GAAP measures.
Slide 6: 2023 operational highlights
Grew active customer base to 2.33 million Launched 18 collections Introduced Precision Progressives Opened 40 stores, reaching 237 in fleet Scaled eye exams to 194 locations Expanded progressives, contacts, and exams penetration Celebrated 15M pairs of glasses distributed through our Buy a Pair, Give
Slide 7: Net revenue, active customers and average revenue per customer
$161.9 $132.9 $146.5 ● Q4’23 net revenue growth of 10.5% vs. Q4’22 17.8% 10.2% 10.5% ● Average revenue per customer up 9.3% to $287 2.20 2.28 2.33 ● Opened 10 new stores in Q4’23, ending the $246 $263 $287 quarter with 237 stores 161 200 237 $598.1 $669.8 $540.8 ● FY 2023 net revenue growth of 12.0%
Slide 8: Adjusted EBITDA and margin results
$8.6 $9.4 (4.8%) 5.8% 5.8% ● Adjusted EBITDA margin(1) of 5.8%, flat to Q4’22 ● Adjusted gross margin(1) was 54.0% compared to 55.2% in ($6.4) Q4’22, primarily driven by increased penetration of contacts and continued retail and exam expansion 57.5% 55.2% 54.0% ● Adjusted SG&A(1) as a percent of reve
Slide 9: 2024 strategic priorities
SCALE OUR EXPAND OUR EVOLVE INTO A DRIVE BRAND OMNICHANNEL CORE GLASSES HOLISTIC VISION AWARENESS EXPERIENCE BUSINESS CARE COMPANY Increase marketing spend Open 40 stores Launch nearly Scale contacts business Launch unique partnerships and 20 collections Return Ecom channel to growth Expand exam bus
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Slide 11: Holistic offering customers have higher cumulative average value
Customers who purchase holistic offering (glasses, contacts, and exams) have a cumulative average value1 that is 2.4x higher after one year than customers who just purchase glasses (and 1.6x higher at initial purchase) Source: Company data. Holistic Vision Customers in 2022 cohort represent just 1.2%
Slide 12: Customer cohort sales retention
Source: Company data Note: Sales retention based on customer cohort sales order value and months since initial purchase. (1) 2019 cohort was impacted by onset and continuation of COVID pandemic in 2020 and 2021, which is reflected in that cohort’s retention rate after 12, 24, 36, and 48 months.
Slide 13: Retail footprint and store potential
900+ 237 open retail stores 237 232 U.S. and 5 Canada 83 markets 39 states 178 cities Current Potential 40 new retail stores in 2023 footprint footprint Store presence in 48 of the 50 most populous markets in the U.S. Location types: ~31% street, ~44% outdoor center, ~25% indoor center As of 12/31/2
Slide 14: Store examples: Avenue Viera and Town & Country Crossing
Avenue Viera (Brevard County, FL) Town & Country Crossing (Town & Country, MO)
Slide 15: 2024 guidance
$748–758M $67M ~12–13% 8.9% $195.5–197M $19.5M 13.7–14.6% ~10% (1) At the midpoint of our range. (Non-GAAP financial term. See appendix for definition of non-GAAP measures and the note at the beginning of the presentation regarding reconciliation of non-GAAP measures in guidance.
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Slide 17: Supplemental Details
S U P P L E M E N TA L D E TA I L S
Slide 18: Net revenue by quarter (2018-2023)
NET REVENUE BY QUARTER (2018 — 2023) Net revenue in bars ($M) 2018 2019 2020 2021 2023 * $166 $170 gig2 423% Onset of coviD $104 $68 $66 $68 $67 Average = $93M Average = $98M QI18 Q2%48 Q348 Q4%8 Q119 G29 Q319 449 QT20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'
Slide 19: Appendix
APPENDIX
Slide 20: Non-GAAP financial measures definitions
Included in this presentation are certain financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) and which are designed to supplement, and not substitute, the Company’s financial information presented in accordance with GAAP. The non-GAAP m
Slide 21: Adjusted EBITDA reconciliation
($19,047) ($20,251) ($63,197) ($110,393) (2,417) (1,382) (9,232) (1,307) (105) (77) 433 497 10,370 8,919 38,554 31,864 1,822 138 3,230 1,647 16,569 20,052 71,065 98,655 - 500 3,191 3,770 1,216 151 2,895 247 - 518 4,413 687 1,000 - 1,000 1,535 $9,408 $8,568 $52,352 $27,202 5.8% 5.8% 7.8% 4.5% (1) Rep
Slide 22: Supplemental Financial Information
S U P P L E M E N TA L F I N A N C I A L I N F O R M AT I O N
Slide 23: Reconciliation of non-GAAP measures
R E C O N C I L I AT I O N O F N O N - G A A P M E A S U R E S The following table reflects a reconciliation of each non-GAAP, or adjusted, financial measure to its most directly comparable financial measure prepared in accordance with GAAP: ( )
Slide 24: Free cash flow reconciliation
$60,991 $10,370 (53,671) (60,181) $7,320 ($49,811)
Slide 25: Thank You
THANK YOU