Warby Parker’s first quarter results drew a negative market response after the company missed Wall Street’s revenue expectations, despite double-digit year-on-year sales growth. Management pointed to continued customer acquisition, strong repeat purchasing trends, and an expanding retail footprint as key drivers of performance. Co-CEO Neil Blumenthal highlighted that the company saw its first quarter of positive GAAP net income as a public company, attributing this milestone to operational discipline and progress in direct-to-consumer initiatives. Management also emphasized an improved adjusted EBITDA margin, supported by leverage in non-marketing expenses and higher average revenue per customer.
Is now the time to buy WRBY? Find out in our full research report (it’s free).
Warby Parker (WRBY) Q1 CY2025 Highlights:
- Revenue: $223.8 million vs analyst estimates of $225.5 million (11.9% year-on-year growth, 0.8% miss)
- Adjusted EPS: $0.14 vs analyst estimates of $0.11 (27.2% beat)
- Adjusted EBITDA: $29.21 million vs analyst estimates of $27.81 million (13.1% margin, 5% beat)
- The company dropped its revenue guidance for the full year to $877.5 million at the midpoint from $885.5 million, a 0.9% decrease
- EBITDA guidance for the full year is $94 million at the midpoint, in line with analyst expectations
- Operating Margin: 1.1%, up from -2.6% in the same quarter last year
- Active Customers: 2.57 million
- Locations: 287 at quarter end, up from 245 in the same quarter last year
- Market Capitalization: $2.61 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Warby Parker’s Q1 Earnings Call
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Mark Altschwager (Baird) asked about factors behind the downward revision to revenue outlook. Co-CEO Dave Gilboa explained that guidance now incorporates more caution due to persistent economic uncertainty and potential volatility in consumer confidence.
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Oliver Chen (TD Cowen) inquired about the impact of market volatility on customer traffic and e-commerce trends. Co-CEO Neil Blumenthal noted pockets of volatility tied to weather and news events, but said overall consumer traffic and conversion remained stable.
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Brooke Roach (Goldman Sachs) questioned the efficiency of marketing spend and its effect on profitability. Gilboa responded that diversified media strategies and increased use of AI have helped maintain acquisition cost efficiency, even as some platforms’ costs have risen.
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Janine Stichter (BTIG) asked about insurance customer behavior and the progress of the Versant integration. Gilboa reported positive early results, with insurance customers displaying higher spend and repeat rates, and described insurance partnerships as a multiyear growth driver.
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Dylan Carden (William Blair) sought clarity on the effectiveness of tariff mitigation and pricing strategies. Management stated that supply chain flexibility and selective pricing actions are showing promising results, with further room for price tier expansion in higher-value products.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be watching (1) the pace and productivity of new store openings—including the rollout of Target shop-in-shops, (2) evidence that supply chain diversification and targeted price increases are effectively mitigating tariff impacts, and (3) sustained growth in active customers and insurance-driven revenue. Progress in deploying AI-powered personalization and maintaining marketing efficiency will also be key indicators.
Warby Parker currently trades at $21.85, up from $16.14 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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