FALSE000150477600015047762024-05-092024-05-09

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 9, 2024
Warby Parker Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction
of Incorporation)
001-40825
(Commission
File Number)
80-0423634
(IRS Employer
Identification No.)

233 Spring Street, 6th Floor East
New York, New York
(Address of Principal Executive Offices)
10013
(Zip Code)
(646) 847-7215
(Registrant's Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, $0.0001 par valueWRBYNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02   Results of Operations and Financial Condition

On May 9, 2024, Warby Parker Inc. (the “Company”) issued a press release announcing the Company’s financial results for the first quarter ended March 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.02, including Exhibit 99.1, is furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01   Financial Statements and Exhibits
(d) Exhibits

Exhibit No.Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL)
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

WARBY PARKER INC.
Dated: May 9, 2024By:/s/ Steve Miller
Steve Miller
Chief Financial Officer


Warby Parker Announces First Quarter 2024 Results
Net revenue increased 16.3% year over year to $200.0 million; Company raises outlook
Average Revenue per Customer increased 9.6% year over year to $296

NEW YORK, May 9, 2024. Warby Parker Inc. (NYSE: WRBY) (“Warby Parker” or the “Company”), a direct-to-consumer lifestyle brand focused on vision for all, today announced financial results for the first quarter ended March 31, 2024.
“We entered 2024 with higher ambitions for delivering on our key metrics and are proud of what the team accomplished in Q1–we drove our highest revenue quarter growth since 2021, up 16.3% year over year, while making significant progress to improve profitability,” said Co-Founder and Co-CEO Neil Blumenthal.
“Earlier this year, we set out to reaccelerate both glasses and active customer growth. We’re encouraged to see strength in single-vision glasses as well as efficiencies across media channels, driven by our team’s strong marketing execution. In Q2 and beyond, we’ll continue to invest in customer acquisition while scaling our holistic vision care offering to drive higher customer lifetime value,” added Co-Founder and Co-CEO Dave Gilboa.
First Quarter 2024 Highlights
•Net revenue increased $28.0 million, or 16.3%, to $200.0 million, as compared to the prior year period.
•GAAP net loss of $2.7 million.
•Gross margin increased 1.6 points to 56.7%, as compared to the prior year period.
•Adjusted EBITDA(1) of $22.4 million and adjusted EBITDA margin(1) of 11.2%.
•Net cash provided by operating activities of $19.9 million.
•Free cash flow of $5.5 million.
•Opened 8 net new stores during the quarter, ending Q1 with 245 stores.
First Quarter 2024 Year Over Year Financial Results
•Net revenue increased $28.0 million, or 16.3%, to $200.0 million.
•Average Revenue per Customer increased 9.6% to $296. Active Customers increased 3.2% to 2.36 million.
•Gross profit increased 19.7% to $113.5 million.
•Gross margin was 56.7% compared to 55.1%. The increase in gross margin was primarily driven by faster growth in glasses, which is our highest margin product, efficiencies in our owned optical laboratories, and lower outbound customer shipping costs as a percent of revenue, partially offset by increased doctor salaries, as the number of stores offering eye exams grew, and sales growth of contact lenses which are sold at a lower margin.
•Selling, general, and administrative expenses (“SG&A”) were $118.6 million, up $11.4 million from the prior year, and represented 59.3% of revenue, down from 62.3% in the prior year period. The primary drivers of growth in SG&A spend were investments in
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marketing and higher payroll-related costs from growth in our retail team associated with store expansion, partially offset by reduced stock-based compensation costs. Adjusted SG&A(1) was $103.4 million, or 51.7% of revenue, versus $87.2 million, or 50.7% of revenue in the prior year period.
•GAAP net loss improved $8.1 million to $2.7 million, primarily as a result of the increase in revenue described above.
•Adjusted EBITDA(1) increased $4.6 million to $22.4 million, and adjusted EBITDA margin(1) increased 0.9 points to 11.2%.
Balance Sheet Highlights
Warby Parker ended the first quarter of 2024 with $220.4 million in cash and cash equivalents.
2024 Outlook
For the full year 2024, Warby Parker is raising its guidance as follows:
•Net revenue of $753 to $761 million, representing growth of approximately 12.5% to 13.5% versus full year 2023.
•Adjusted EBITDA(1) of $70.0 million at the midpoint of our revenue range, which equates to an adjusted EBITDA margin(1) of 9.2%.
•On track for 40 new store openings this year.
“Our Q1 results are evidence of the returns we are starting to see from many of our recent investments. Going forward, we plan to maintain a balanced approach to delivering both efficient growth and incremental profitability,” said Chief Financial Officer Steve Miller.
The guidance and forward-looking statements made in this press release and on our conference call are based on management's expectations as of the date of this press release.
(1) Please see the reconciliation of non-GAAP financial measures to the most comparable GAAP financial measure in the section titled “Non-GAAP Financial Measures” below.
Webcast and Conference Call
A conference call to discuss Warby Parker’s first quarter 2024 results, as well as second quarter and full year 2024 outlook, is scheduled for 8:00 a.m. ET on May 9, 2024. To participate, please dial 833-470-1428 from the U.S. or 404-975-4839 from international locations. The conference passcode is 976307. A live webcast of the conference call will be available on the investors section of the Company’s website at investors.warbyparker.com where presentation materials will also be posted prior to the conference call. A replay will be made available online approximately two hours following the live call for a period of 90 days.
Forward-Looking Statements
This press release and the related conference call, webcast and presentation contain 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 financial performance,
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including expectations regarding achieving profitability and growth in our e-commerce channel, delivering stakeholder value, growing market share, and our guidance for the quarter ending June 30, 2024 and year ending December 31, 2024; expectations regarding the number of new store openings during the year ending December 31, 2024; management’s plans, priorities, initiatives and strategies; and expectations regarding growth of our business. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” or “would,” or the negative of these words or other similar terms or expressions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all.
Forward-looking statements are based on information available at the time those statements are made and are based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management as of that time with respect to future events. These statements are subject to risks and uncertainties, many of which involve factors or circumstances that are beyond our control, that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. These risks and uncertainties include our ability to manage our future growth effectively; our expectations regarding cost of goods sold, gross margin, channel mix, customer mix, and selling, general, and administrative expenses; increases in component and shipping costs and changes in supply chain; our reliance on our information technology systems and enterprise resource planning systems for our business to effectively operate and safeguard confidential information; our ability to engage our existing customers and obtain new customers; planned new retail stores in 2024 and going forward; an overall decline in the health of the economy and other factors impacting consumer spending, such as recessionary conditions, inflation, government instability, and geopolitical unrest; our ability to compete successfully; our ability to manage our inventory balances and shrinkage; the growth of our brand awareness; our ability to recruit and retain optometrists, opticians, and other vision care professionals; the spread of new infectious diseases; the effects of seasonal trends on our results of operations; our ability to stay in compliance with extensive laws and regulations that apply to our business and operations; our ability to adequately maintain and protect our intellectual property and proprietary rights; our reliance on third parties for our products, operation and infrastructure; our duties related to being a public benefit corporation; the ability of our Co-Founders and Co-CEOs to exercise significant influence over all matters submitted to stockholders for approval; the effect of our multi-class structure on the trading price of our Class A common stock; and the increased expenses associated with being a public company. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the Company's expectations is included in our most recent reports filed with the SEC on Form 10-K and Form 10-Q. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.
Additional information regarding these and other factors that could affect the Company’s results is included in the Company’s SEC filings, which may be obtained by visiting the SEC's website at www.sec.gov. Information contained on, or that is referenced or can be accessed through, our
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website does not constitute part of this document and inclusions of any website addresses herein are inactive textual references only.
Glossary
Active Customers is defined as unique customer accounts that have made at least one purchase in the preceding 12-month period.
Average Revenue per Customer is defined as the sum of the total net revenues in the preceding 12-month period divided by the current period Active Customers.
Non-GAAP Financial Measures
We use adjusted EBITDA, adjusted EBITDA margin, adjusted cost of goods sold (“adjusted COGS”), adjusted gross margin, adjusted gross profit, adjusted selling, general, and administrative expenses (“adjusted SG&A”), and free cash flow as important indicators of our operating performance. Collectively, we refer to these non-GAAP financial measures as our “Non-GAAP Measures.” The Non-GAAP Measures, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.
Adjusted EBITDA is defined as net income (loss) before interest and other income, taxes, and depreciation and amortization as further adjusted for asset impairment costs, stock-based compensation expense and related employer payroll taxes, amortization of cloud-based software implementation costs, non-cash charitable donations, and non-recurring costs such as restructuring costs, major system implementation costs, charges for certain legal matters, and transaction costs. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue.
Adjusted COGS is defined as cost of goods sold adjusted for stock-based compensation expense and related employer payroll taxes.
Adjusted gross profit is defined as net revenue minus adjusted COGS. Adjusted gross margin is defined as adjusted gross profit divided by net revenue.
Adjusted SG&A is defined as SG&A adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, and non-recurring costs such as restructuring costs, major system implementation costs, charges for certain legal matters, and transaction costs.
Free Cash Flow is defined as net cash provided by operating activities minus purchases of property and equipment.
The Non-GAAP Measures are presented for supplemental informational purposes only. A reconciliation of historical GAAP to Non-GAAP financial information is included under “Selected Financial Information” below.
We have not reconciled our adjusted EBITDA margin guidance to GAAP net income (loss) margin, or net margin, or adjusted EBITDA guidance to GAAP net income (loss) because we do not provide guidance for GAAP net margin or GAAP net income (loss) due to the uncertainty and potential variability of stock-based compensation and taxes, which are reconciling items between GAAP net margin and adjusted EBITDA margin and GAAP net income (loss) and adjusted
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EBITDA, respectively. Because such items cannot be reasonably provided without unreasonable efforts, we are unable to provide a reconciliation of the adjusted EBITDA margin guidance to GAAP net margin and adjusted EBITDA guidance to GAAP net income (loss). However, such items could have a significant impact on GAAP net margin and GAAP net income (loss).
About Warby Parker
Warby Parker (NYSE: WRBY) was founded in 2010 with a mission to inspire and impact the world with vision, purpose, and style–without charging a premium for it. Headquartered in New York City, the co-founder-led lifestyle brand pioneers ideas, designs products, and develops technologies that help people see, from designer-quality prescription glasses (starting at $95) and contacts, to eye exams and vision tests available online and in our 245 retail stores across the U.S. and Canada.
Warby Parker aims to demonstrate that businesses can scale, do well, and do good in the world. Ultimately, the Company believes in vision for all, which is why for every pair of glasses or sunglasses sold, it distributes a pair to someone in need through its Buy a Pair, Give a Pair program. To date, Warby Parker has worked alongside its nonprofit partners to distribute more than 15 million glasses to people in need.

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Selected Financial Information

Warby Parker Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(Amounts in thousands, except share data)
March 31,
2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents$220,384 $216,894 
Accounts receivable, net1,167 1,779 
Inventory56,450 62,234 
Prepaid expenses and other current assets18,116 17,712 
Total current assets296,117 298,619 
Property and equipment, net156,722 152,332 
Right-of-use lease assets129,561 122,305 
Other assets10,492 7,056 
Total assets$592,892 $580,312 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$26,699 $22,456 
Accrued expenses43,200 46,320 
Deferred revenue21,240 31,617 
Current lease liabilities24,462 24,286 
Other current liabilities2,939 2,411 
Total current liabilities118,540 127,090 
Non-current lease liabilities156,988 150,171 
Other liabilities1,177 1,264 
Total liabilities276,705 278,525 
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value; Class A: 750,000,000 shares authorized at March 31, 2024 and December 31, 2023, 99,005,197 and 98,368,239 issued and outstanding at March 31, 2024 and December 31, 2023, respectively; Class B: 150,000,000 shares authorized at March 31, 2024 and December 31, 2023, 19,734,125 and 19,788,682 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively, convertible to Class A on a one-to-one basis12 12 
Additional paid-in capital987,305 970,135 
Accumulated deficit(669,510)(666,831)
Accumulated other comprehensive loss(1,620)(1,529)
Total stockholders’ equity316,187 301,787 
Total liabilities and stockholders’ equity$592,892 $580,312 
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Warby Parker Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(Amounts in thousands, except share and per share data)
Three Months Ended March 31,
20242023
Net revenue$200,003 $171,968 
Cost of goods sold86,544 77,177 
Gross profit113,459 94,791 
Selling, general, and administrative expenses118,586 107,221 
Loss from operations(5,127)(12,430)
Interest and other income, net2,556 1,879 
Loss before income taxes(2,571)(10,551)
Provision for income taxes108 261 
Net loss$(2,679)$(10,812)
Net loss per share attributable to common stockholders, basic and diluted$(0.02)$(0.09)
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted119,143,534 116,159,428 


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Warby Parker Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(Amounts in thousands)
Three Months Ended March 31,
20242023
Cash flows from operating activities
Net loss$(2,679)$(10,812)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization10,583 9,140 
Stock-based compensation14,048 19,780 
Asset impairment charges399 395 
Amortization of cloud-based software implementation costs1,073 363 
Change in operating assets and liabilities:
Accounts receivable, net612 473 
Inventory5,784 4,442 
Prepaid expenses and other assets(2,913)(657)
Accounts payable3,327 (921)
Accrued expenses(108)(7,826)
Deferred revenue(10,377)(6,744)
Other current liabilities528 119 
Right-of-use lease assets and current and non-current lease liabilities(263)988 
Other liabilities(87)(97)
Net cash provided by operating activities19,927 8,643 
Cash flows from investing activities
Purchases of property and equipment(14,437)(12,385)
Investment in optical equipment company(2,000)— 
Net cash used in investing activities(16,437)(12,385)
Cash flows from financing activities
Proceeds from stock option exercises91 81 
Net cash provided by financing activities91 81 
Effect of exchange rates on cash(91)(662)
Net change in cash and cash equivalents3,490 (4,323)
Cash and cash equivalents, beginning of period216,894 208,585 
Cash and cash equivalents, end of period$220,384 $204,262 
Supplemental disclosures
Cash paid for income taxes$69 $97 
Cash paid for interest76 50 
Cash paid for amounts included in the measurement of lease liabilities10,400 10,849 
Non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses$4,582 $2,957 
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Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

The following table reconciles adjusted EBITDA and adjusted EBITDA margin to the most directly comparable GAAP measure, which is net loss:
Three Months Ended March 31,
20242023
(unaudited, in thousands)
Net loss$(2,679)$(10,812)
Adjusted to exclude the following:
Interest and other income, net(2,556)(1,878)
Provision for income taxes108 261 
Depreciation and amortization expense10,583 9,140 
Asset impairment charges399 395 
Stock-based compensation expense(1)
14,315 19,866 
Amortization of cloud-based software implementation costs(2)
1,073 363 
ERP implementation costs(3)
— 403 
Other costs(4)
1,135 — 
Adjusted EBITDA$22,378 $17,738 
Adjusted EBITDA margin11.2 %10.3 %
(1)    Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions. For the three months ended March 31, 2024 and 2023, the amount includes $0.3 million and $0.1 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises.
(2)    Represents the amortization of costs capitalized in connection with the implementation of cloud-based software.
(3)    Represents internal and external non-capitalized costs related to the implementation of our new Enterprise Resource Planning (“ERP”) system.
(4)    Represents other non-recurring costs, including charges for certain legal matters.

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Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

The following table presents our non-GAAP, or adjusted, financial measures for the periods presented as a percentage of revenue. Each cost and operating expense is adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, and non-recurring costs such as restructuring costs, major system implementation costs, charges for certain legal matters, and transaction costs.

ReportedAdjusted
Three Months Ended March 31,Three Months Ended March 31,
2024202320242023
(unaudited, in thousands)(unaudited, in thousands)
Cost of goods sold$86,544 $77,177 $86,300 $76,979 
% of Revenue43.3 %44.9 %43.1 %44.8 %
Gross profit$113,459 $94,791 $113,703 $94,989 
% of Revenue56.7 %55.1 %56.9 %55.2 %
Selling, general, and administrative expenses$118,586 $107,221 $103,380 $87,150 
% of Revenue59.3 %62.3 %51.7 %50.7 %


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Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

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 March 31,
20242023
(unaudited, in thousands)
Cost of goods sold$86,544 $77,177 
Adjusted to exclude the following:
Stock-based compensation expense(1)
244 198 
Adjusted cost of goods sold$86,300 $76,979 
Gross profit$113,459 $94,791 
Adjusted to exclude the following:
Stock-based compensation expense(1)
244 198 
Adjusted gross profit$113,703 $94,989 
Selling, general, and administrative expenses$118,586 $107,221 
Adjusted to exclude the following:
Stock-based compensation expense(1)
14,071 19,668 
ERP implementation costs(2)
— 403 
Other costs(3)
1,135 — 
Adjusted selling, general, and administrative expenses$103,380 $87,150 
Net cash provided by operating activities$19,927 $8,643 
Purchases of property and equipment(14,437)(12,385)
Free cash flow$5,490 $(3,742)
(1)    Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions. For the three months ended March 31, 2024 and 2023, the amount includes $0.3 million and $0.1 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises.
(2)    Represents internal and external non-capitalized costs related to the implementation of our new ERP system.
(3)    Represents other non-recurring costs, including charges for certain legal matters.



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Contacts
Investor Relations:
Jaclyn Berkley, Head of Investor Relations
Brendon Frey, ICR
investors@warbyparker.com

Media:
Ali Weltman
ali@derris.com

Source: Warby Parker Inc.
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v3.24.1.u1
Cover
May 09, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 09, 2024
Entity Registrant Name Warby Parker Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40825
Entity Tax Identification Number 80-0423634
Entity Address, Address Line One 233 Spring Street
Entity Address, Address Line Two 6th Floor East
Entity Address, City or Town New York
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10013
City Area Code 646
Local Phone Number 847-7215
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, $0.0001 par value
Trading Symbol WRBY
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001504776
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