Warby Parker net loss increases by more than $40 million in fourth quarter

Diving brief:

  • Warby Parker Thursday announced the fourth quarter net revenues of $132.9 milliona 17.8% year-over-year increase and a 41.9% increase over the same period in 2019. However, eyewear brand DTC’s net loss in the quarter was widened 967% to $45.9 million from $4.3 million the prior year, partly due to SG&A increased expenses from $51.9 million to $122.1 million due an increase in stock-based compensation expense and related employer payroll taxes.
  • Warby Parker opened seven new stores in the fourth quarter for a total of 35 store openings in 2021. The brand, which now operates 161 stores, plans to open 40 stores in 2022. Active customers in the quarter increased by 21 .5% year-on-year to reach 2.2 million customers. , while average revenue per customer increased 13% to $246, according to a company press release.
  • For the full year, brand revenue increased 37.4% to $540.8 million, while net loss increased by $88.4 million to $144.3 million due to increased general and administrative costs.

Overview of the dive:

In its first annual results as a publicly traded company, Warby Parker’s net loss continued to widen despite revenue gains in 2020 and 2019.

Executives said Thursday that the impacts of the omicron variant of COVID-19 took a toll on the company’s revenue in the late fourth quarter and early first quarter, which is typically when Warby Parker records its highest sales.

Co-founder and co-CEO Dave Gilboa said on a call with analysts that omicron resulted in “nearly $5 million in lost sales in the fourth quarter and more than $15 million in the first quarter, in due to fewer people shopping in our stores.”

However, the company expects its stores to be back to full productivity by the end of the year as it continues its physical expansion. With 40 store openings expected in 2022, Warby Parker plans to operate some 201 stores by the end of the year. And its footprint could extend much further than that: last year, the brand commissioned a third-party study, which indicated that the brand could expand its store base to more than 900 outlets in the United States, said co-founder and co-CEO Neil Blumenthal. the call. As DTCs evolve to grow their business and achieve profitability, more and more have turned to brick-and-mortar retail over the years as the limitations of selling primarily online become apparent.

“While the end of 2021 and the start of 2022 have been impacted by Omicron, we are incredibly proud to have achieved another year of robust growth,” Chief Financial Officer Steve Miller said in a statement. “And as we look to 2022 and beyond, we are focused on executing Warby Parker’s distinct growth strategies to increase our market share by 1% in the growing $160 billion eyewear market. dollars.”

In 2022, the company expects net revenue to be between $650 million and $660 million, with 22% year-over-year growth, and a margin of Adjusted EBITDA around 5.6% to 6.6%.

Ann J. Cox