Dive Brief:
- Warby Parker on Thursday reported fourth quarter net revenue of $132.9 million, a 17.8% increase year over year and a 41.9% increase from the same period in 2019. However, the DTC eyewear brand’s net loss during the quarter widened by 967% to $45.9 million from $4.3 million the year before, due in part to SG&A expenses increasing by $51.9 million to $122.1 million from an increase in stock-based compensation expense and related employer payroll taxes.
- Warby Parker opened seven new stores in Q4 for a total of 35 store openings in 2021. The brand, which now operates 161 stores, plans to open 40 locations in 2022. Active customers during the quarter increased 21.5% year over year to 2.2 million customers, while average revenue per customer increased 13% to $246, according to a company press release.
- For the full year, the brand’s revenue increased 37.4% to $540.8 million, while net loss grew by $88.4 million to $144.3 million as a result of the increase in SG&A.
Dive Insight:
In its first full-year results as a publicly traded company, Warby Parker’s net loss continued to widen despite posting revenue gains over 2020 and 2019.
Executives on Thursday said the impacts from the omicron variant of COVID-19 took a hit to the company’s top line at the end of the fourth quarter and early in the first quarter, which is typically when Warby Parker sees its highest sales.
Co-founder and co-CEO Dave Gilboa said on a call with analysts that omicron resulted in “nearly $5 million of lost sales in Q4 and over $15 million in Q1, stemming from fewer people shopping in our stores.”
However, the company expects its stores to return to full productivity by the end of the year as it pushes forward with its brick-and-mortar expansion. With the planned 40 store openings in 2022, Warby Parker expects to operate some 201 stores by the end of the year. And its footprint could grow much further than that: The brand last year commissioned a third-party study, which indicated the brand could grow its store base to over 900 retail locations across the U.S., co-founder and co-CEO Neil Blumenthal said on the call. As DTCs move to scale their businesses, and reach profitability, more have turned to physical retail over the years as the limitations of selling primarily online become apparent.
“While the end of 2021 and the start of 2022 were impacted by Omicron, we are incredibly proud to have delivered another year of robust growth,” Chief Financial Officer Steve Miller said in a statement. “And as we look ahead to 2022 and beyond, we are focused on executing Warby Parker’s distinct growth strategies to increase our 1% market share within the growing $160 billion eyewear market.”
In 2022, the company expects net revenue to be between $650 million and $660 million, growing up to 22% year over year, and adjusted EBITDA margin to be around 5.6% to 6.6%.
