Warby Parker Inc. · NYSE:WRBY
Warby Parker — Q3 2023 Earnings Presentation
26 slides from Warby Parker's earnings presentation, Nov 8, 2023
Slide 1: Third Quarter 2023 Earnings Report
THIRD QUARTER 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 disclaimer
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, and 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: Since 2010, we've offered high-quality prescription eyewear
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 less than 1% of the $76 billion U.S. eyewear market 3. We helped pioneer the vertically integrated, direct-to-consumer model 4. W
Slide 5: Q3 2023 key metrics
$169.8M 14.2% 2.30M $11.0M 6.5% $284 (1) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. See the appendix for reconciliations to the nearest GAAP measures. (2) Defined as net revenue for the trailing twelve-month period divided by the number of Active Customers as of the end of that
Slide 6: Store photos: Franklin, TN and Grand Rapids, MI
McEwen Northside (Franklin, TN) Breton Village (Grand Rapids, MI)
Slide 7: Q3'23 net revenue growth of 14.2%
$169.8 $148.8 $137.4 ● Q3’23 net revenue growth of 14.2% vs. Q3’22 32.0% 8.3% 14.2% ● Average revenue per customer up 10.0% to $284 2,151 2,262 2,303 ● Opened 11 new stores in Q3’23, ending the $242 $258 $284 quarter with 227 stores 154 190 227 $451.6 $507.9 $407.9 ● September YTD 2023 net revenue g
Slide 8: Adjusted EBITDA margin of 6.5%, adjusted gross margin
$11.9 $11.2 $11.0 ● Adjusted EBITDA margin(1) of 6.5%, down 1.5 pts from Q3’22 8.1% 8.0% 6.5% ● Adjusted gross margin(1) was 54.8% compared to 56.9% in Q3’22, primarily driven by increased penetration of contacts and continued retail and exam expansion 58.7% 56.9% 54.8% ● Adjusted SG&A(1) as a perce
Slide 9: Quarterly net revenue, adjusted EBITDA and customer trends
$172.0 $166.1 $169.8 $17.7 $153.2 $149.6 $148.8 $14.2 $146.5 $11.9 $11.0 $8.6 $5.9 12.2% 14.2% $0.8 10.3% 13.7% 10.2% 11.0% 8.5% 10.3% 8.3% 8.0% 5.8% 6.5% 0.5% 4.0% 217 227 $277 $284 204 $258 $263 $270 190 200 $249 $254 169 178 11.3% 8.4% 9.2% 10.0% 8.2% 6.8% 6.9% Adjusted EBITDA and Adjusted EBITDA
Slide 10: Contact lens brands and eye exams
Slide 11: Warby Parker eyewear lifestyle imagery
Slide 12: Current retail footprint and potential
900+ 227 open retail stores 227 222 U.S. and 5 Canada 77 markets 39 states 169 cities Current Potential 30 new retail stores in 2023 footprint footprint Store presence in 47 of the 50 most populous markets in the U.S. Location types: ~32% street, ~43% outdoor center, ~25% indoor center As of 9/30/20
Slide 13: Store photos: Wesley Chapel, FL and Lake Grove, NY
The Shops at Wiregrass (Wesley Chapel, FL) Smith Haven Mall (Lake Grove, NY)
Slide 14: 2023 full-year guidance
$666–669M $52.7M ~11.5% 7.9% ~8-10% ~6% (1) At the midpoint of our range
Slide 15: Warby Parker eyewear imagery
Slide 16: For every pair purchased, a pair of glasses is distributed
F O R E V E R Y PA I R P U R C H AS E D, A PA I R O F G L AS S E S I S D I S T R I B U T E D TO S O M E O N E I N N E E D. S O FA R , T H AT ’ S 1 5 M I L L I O N PA I R S AND COUNTING.
Slide 17: Supplemental Details
S U P P L E M E N TA L D E TA I L S
Slide 18: Net revenue by quarter (2017 to Q3 2023)
Net revenue in bars ($M) 2017 $53 51 $53°S Average = $52M NET REVENUE BY QUARTER (2017 — Q3 2023) 2019 2018 Average = $135M Average = $150M $67 Average ¢55il Average = $98M Average = $68M Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 4°21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 G2'23 Q3'23 Qt17 Q217 Q3'17 G47 Q11
Slide 19: Compelling and consistent sales retention rates
COMPELLING AND CONSISTENT SALES RETENTION RATES es Sales retention rate by customer cohort (based on customer cohort sales order value and months since initial purchase) Hi 206 105% 1) 2017 97% 98% 2018 BB 2019 2020 73% 75% 75% 77% 75% 20212 2022” 24% 25% 25% 25% 290, 25% 26% 26% 100% 12 months 24 m
Slide 20: Appendix
APPENDIX
Slide 21: 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 22: Adjusted EBITDA reconciliation
($17,413) ($23,843) ($44,150) ($90,142) (2,655) 183 (6,815) 75 301 (12) 538 574 9,760 8,342 28,184 22,947 757 1,097 1,407 1,509 16,466 24,358 54,496 78,603 2,591 - 3,191 3,270 853 96 1,679 96 371 170 4,413 170 - 1,535 - 1,535 $11,031 $11,926 $42,943 $18,637 6.5% 8.0% 8.5% 4.1% (1) Represents expense
Slide 23: 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 24: Quarterly adjusted EBITDA reconciliation
$6,425 $4,050 $1,383 ($11,856) $2,778 ($12,786) ($41,612) ($4,301) $3,011 ($10,307) ($91,073) ($45,902) ($34,133) ($32,166) ($23,843) ($20,251) ($10,812) ($15,925) ($17,413) (613) (889) (58) (379) 49 496 81 (529) (134) 440 146 (105) (146) 38 183 (1,382) (1,878) (2,281) (2,655) 998 410 154 (1,288) 18
Slide 25: 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 26: Thank You
THANK YOU