Warby Parker Inc. · NYSE:WRBY
Warby Parker — Q4 2021 Earnings Presentation
32 slides from Warby Parker's earnings presentation, Mar 17, 2022
Slide 1: Q4 and Full-Year 2021 Earnings Report
Q4 AND FULL-YEAR 2021 EARNINGS REPORT Speakers: DAVE GILBOA | Co-Founder & Co-CEO NEIL BLUMENTHAL | Co-Founder & Co-CEO STEVE MILLER | SVP & Chief Financial Officer WA R B Y PA R K E R 1
Slide 2: Forward-Looking Statements / Non-GAAP Financial Measures
F O R WA R D - L O O K I N G S TAT E M E N T S / N O N - G A A P F I N A N C I A L M E A S U R E S 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. Th
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. 3
Slide 4: Company Overview
C O M PA N Y OV E RV I E W 1 . Our sales represent just 1% of the $44 billion U.S. eyewear market 2 . We maintain a best-in-class NPS of 80+, with low unaided brand awareness of less than 15% 3. We’ve helped pioneer the vertically integrated, direct-to-consumer model 4 . Warby Parker has 161 stores
Slide 5: Full-Year 2021: Financial Highlights
F U L L-Y E A R 2 0 2 1 : F I N A N C I A L H I G H L I G H T S $541M 37% 2.20M $246 NET REVENUE NET REVENUE AC T I V E C U STO M E R S AV E R A G E R E V E N U E GROWTH P E R C U S T O M E R (1) 80+ 161 $25M 4.6% NET PROMOTER STORES A D J U S T E D E B I T DA (2) A DJ U ST E D E B I T DA SCORE M A
Slide 6: 2021 Milestones and Accomplishments
2 0 2 1 M I L E S TO N E S A N D AC C O M P L I S H M E N T S Grew active customer base to 2.20 million Opened 35 stores Doubled revenue from our contact lens offering Opened a second in-house optical lab, this time in Las Vegas Launched 21 collections Became the first public benefit corporation to
Slide 7: Store photos
Downtown Crown (Gaithersburg, MD) WA R B Y PA R K E R 7 Shops at Yale (Yale, CT) The Mall at Short Hills (Short Hills, NJ)
Slide 8: Advancing Our Mission
A DVA N C I N G O U R M I S S I O N Became a public benefit corporation Re-certified as a B Corporation Publicly launched the Warby Parker Impact Foundation Surpassed more than 10 million pairs of glasses via our Buy a Pair, Give a Pair program Expanded Pupils Project to 70+ new school districts WA
Slide 9: Store photos
Winter Park (Winter Park, FL) WA R B Y PA R K E R 9 Shops at Yale (Yale, CT) Short Pump (Richmond, VA) Town Center Crossing (Leawood, KA)
Slide 10: Net Revenue Performance
NET REVENUE PERFORMANCE rease Quarterly Net 42% inc Key Takeaways Revenue ($M) $132.9 $112.8 $93.6 Q4 2021 Highlights • Q4’21 net revenue growth of 18% vs. Q4’20 and up Q4’19 Q4’20 Q4’21 42% vs. Q4’19 Revenue Growth % 33% 21% 18% 2-Year Growth % 76% 60% 42% • Active Customers as of Q4’21 at 2.20M, a
Slide 11: Adjusted EBITDA Margin Performance
A DJ U ST E D E B I T DA M A R G I N P E R F O R M A N C E Quarterly Adjusted EBITDA ($M) Key Takeaways ($5.1) $1.1 ($6.4) Q4 2021 Highlights 0.9% • Adjusted EBITDA margin of (4.8%) down 570 basis points from (5.4%) (4.8%) Q4’20 and up 60 basis points from Q4’19 % of Revenue Q4’19 Q4’20 Q4’21 • Adju
Slide 12: Quarterly Financial Details
Q 4 F I N A N C I A L D E TA I L S Revenue ($M) Adjusted EBITDA ($M) Adj EBITDA Margin % $139 $137 $9.3 $10.8 $11.2 $132 $133 6.7% 8.2% 8.1% Y/Y Growth 96% (4.8%) 27% 32% 18% ($6.4) Q1’21 Q2’21 Q3’21 Q4’21 Q1’21 Q2’21 Q3’21 Q4’21 Store Count >90% Impact of Omicron 145 154 161 Store Productivity 134
Slide 13: Full-Year Financial Details
F U L L-Y E A R F I N A N C I A L D E TA I L S Revenue ($M) Average Revenue per Customer $541 $246 $370 $394 $218 $208 Y/Y Growth Y/Y Growth 36% 6% 37% 13% 11% 5% FY 2019 FY 2020 FY 2021 FY 2019 FY 2020 FY 2021 Active Customers (M) Adjusted EBITDA ($M) EBITDA Margin % 2.20 1.78 1.81 $21.9 $24.9 Y/Y
Slide 14: Expanding Retail Footprint with Significant White Space for New Stores
E X PA N D I N G R E TA I L F O O T P R I N T W I T H S I G N I F I C A N T W H I T E S PA C E F O R N E W S T O R E S Number of Store Locations 900+ 161 open retail stores 158 U.S. and 3 Canada 61 markets 161 37 states/provinces 111 cities 40 target new retail stores in 2022 Current Potential Store
Slide 15: WA R B Y PA R K E R
WA R B Y PA R K E R 15
Slide 16: Optical lab in Sloatsburg, NY
Optical lab in Sloatsburg, NY WA R B Y PA R K E R 16
Slide 17: Optical lab in Las Vegas, NV
Optical lab in Las Vegas, NV WA R B Y PA R K E R 17
Slide 18: Strategic Priorities
2 0 2 2 S T R AT E G I C P R I O R I T I E S SCALING OUR EXPANDING OUR EVOLVING INTO A DRIVING BRAND O MNICHANNEL CORE GLASSES HOLISTIC VISION AWARENESS EXPERIENCE BUSINESS CARE COMPANY Open 40 stores to end Deepen penetration of Scale contacts business Amplify reach by utilizing the year with 200+
Slide 19: Full-Year Outlook
F U L L-Y E A R 2 0 2 2 O U T LO O K $650–660M NET REVENUE 20–22% N E T R E V E N U E G R OW T H 5.6–6.6% A DJ U S T E D E B I T DA M A R G I N Guidance takes into account the estimated $15M of lost sales in Q1 as a result of Omicron WA R B Y PA R K E R 19
Slide 20: Q1 2022 Outlook
Q1 2022 OUTLOOK $153.0–154.5M NET REVENUE 10–11% N E T R E V E N U E G R OW T H Guidance takes into account the estimated $15M of lost sales in Q1 as a result of Omicron WA R B Y PA R K E R 20
Slide 21: Long-Term Outlook for Sustainable Growth
L O N G -T E R M O U T L O O K F O R S U S TA I N A B L E G R O W T H 20%+ N E T R E V E N U E G R OW T H 58–60% GROSS MARGINS 20%+ A DJ U S T E D E B I T DA M A R G I N WA R B Y PA R K E R 21
Slide 22: WA R B Y PA R K E R
WA R B Y PA R K E R 22
Slide 23: Supplemental Detail
S U P P L E M E N TA L D E TA I L
Slide 24: Consistent Revenue Seasonality Pre-COVID
CONSISTENT REVENUE SEASONALITY PRE-COVID Net Revenue by Quarter (2016 - 2021) Onset and continuation of pandemic 2016 2017 2018 2019 2020 2021 +23% Onset of $139 $137 COVID $132 $133 +17% $113 $110 +32% $104 $94 $95 $94 $89 +27% Average = $135M $68 $66 $68 $71 $67 +34% $53 $51 $53 $53 Average = $93M
Slide 25: Future Growth Opportunities Lead to Higher, Stickier Customer Value Over Time
FUTURE GROWTH OPPORTUNITIES LEAD TO HIGHER, “ S T I C K I E R ” C U S T O M E R VA L U E O V E R T I M E Cumulative average sales order value per customer1 2020 customer cohort by products/services purchased +12 months: 2.1x higher than Customers who purchase Initial purchase: +6 months: Glasses Onl
Slide 26: Compelling and Consistent Sales Retention Rates
C O M P E L L I N G A N D C O N S I S T E N T S A L E S R E T E N T I O N R AT E S 2015 Sales retention rate by customer cohort 2016 (based on customer cohort sales order value and months since initial purchase) 100% 2017 97% 98% 2018 2019 75% 75% 77% 2020 73% 48% 49% 50% 50% 47% 24% 25% 25% 25% 22%
Slide 27: Appendix
APPENDIX
Slide 28: 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 AS REPORTED Unaudited, in thousands Q4’21 Q4’20 Q4’19 Q4’21 vs. Q4’20 Q4’21 vs. Q4’19 Net Revenue $132,892 $112,837 $93,620 18% 42% Gross Profit $76,251 $65,178 $53,332 17% 43% % of Revenue 57.4% 57.8% 57.0% (39 bps) 40 bps Total SG&A $12
Slide 29: Reconciliation of Adjusted EBITDA to Net Income
R E C O N C I L I AT I O N O F A D J U S T E D E B I T D A T O N E T I N C O M E Three Months Ended December 31 Year Ended December 31 All numbers in thousands, unaudited 2021 2020 2019 2021 2020 2019 Net loss ($45,902) ($4,301) ($11,855) ($144,271) ($55,919) — Adjusted to exclude the following: Int
Slide 30: 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 REPORTED ADJUSTED REPORTED ADJUSTED Three Months Ended Three Months Ended Year Ended Year Ended December 31 December 31 December 31 December 31 All numbers in millions, unaudited 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019
Slide 31: 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: Three Months Ended December 31 Year Ended December 31 Unau
Slide 32: Thank You
THANK YOU WA R B Y PA R K E R 32