Warby Parker Reports Surprise Profit and Exceeds Forecasts

Warby Parker Inc. (WRBY, -3.49%) surprised investors with better-than-expected adjusted profit and revenue numbers. The online eyewear retailer saw an increase in both active customers and revenue per customer. Despite this positive news, the company's stock remained inactive in premarket trading.

Financial Performance

In comparison to the previous year, Warby Parker managed to cut its net losses in half, from $32.2 million to $15.9 million. On an adjusted basis, the company achieved earnings per share of 4 cents, a significant improvement compared to a loss of 1 cent per share previously expected by analysts.

Furthermore, the company reported an 11% growth in revenue, totaling $166.1 million, surpassing the FactSet consensus of $162.6 million. The number of active customers rose by 1.2% to reach 2.28 million, and the average revenue per customer increased by 9.2% to $277.

Factors Affecting Gross Margin

The gross margin narrowed from 57.7% to 54.6% due to several factors. Firstly, there was an increase in the sales of contact lenses, which typically have lower gross margins compared to eyeglasses. Additionally, the company faced higher employee salary and benefit costs.

Upgraded Revenue Guidance

In a positive outlook for the future, Warby Parker raised its revenue guidance for 2023. The company now forecasts a revenue range of $655 million to $664 million, up from the previous range of $645 million to $660 million.

Market Performance

Over the past three months, Warby Parker's stock has rallied by an impressive 18.6%. In comparison, the S&P 500 index (SPX, -0.42%) has gained 9.3%.

Warby Parker's strong financial performance, increased customer base, and higher revenue per customer indicate a promising future for the eyewear retailer.