Warby Parker (WRBY) 10 Nov 222022 Q3 Earnings call transcript

Thank you and good morning everyone.

Here with me today are Neil Blumenthal, Dave Gilboa our Co-Founders and Co-CEOs alongside Steve Miller, Senior Vice President and Chief Financial Officer.

Before we begin, we have a couple of reminders.

Our earnings release and slide presentation are available on our website at investors.warbyparker.com.

During this call, and in our presentation, we will be making comments of a forward-looking nature. materially various expressed risks differ a implied may of result and results from or those as Actual uncertainties.

law, or “Risk including For these more Form update except information to section XX-K. filings, based statements report XXXX, and as risks, of obligation forward-looking the by titled the our publicly on please review These as latest information the we company's on about annual no Factors” revise statements. in some of assume are XX, company's forward-looking SEC required November

measure most in found Additionally, that prepared with financial we kick for will Neil press measures. U.S. deck U.S. us items be These be please performance to the slide our reconciliation discussing off. accordance comparable in certain to non-GAAP this ahead. non-GAAP and pass financial on and in our A website. directly available measures Neil, addition financial these to it over release GAAP GAAP. IR morning's substitute a not with I'll And measures of can go of are to

form the the the the of XX% quarter are in as as joining last X.XX that of market the thank expand ended remain our September because levels. year-over-year, with perspective, range. resonate a to in progressed. share morning a wallets $XXX retail revised XXX We third us third macro customers, proposition, From uncertain all our channel Despite Equally consumers net the and of we an value continues our XXXX We the more per delivered year ever. year XX% revenue increasingly increase in the brand, quarter saw million a of new active that revenue period last model with an gain demand exiting nearly for pressured. moderately adults we as pleased third quarter monthly $XXX this drive nearly is our results. versus $XX approximately of vision million and customers Welcome share Parker’s million omni for we at slight incremental our with in of quarter. the incremental nearly to was as X.X% discuss $X service which of of and percent to some to channel X% productivity care increased important results with achieved billion the even and our guidance. we difficult customer reaching QX, as and Average end throughout offering spending continue million consumer’s above ahead of believe this saw quarter level using productivity correction. high high our vision our a high same and quarter projection, gains XXXX over end you of U.S. of above was product third of Store base than we uptick performance XXXX our Warby I’m and an the approximately X.X% guidance environment we increase

observed XX% to up Our pandemic pullback structure intentional resulted first to a environment given a marketing e-commerce it's but cost marketing and pre our of top stronger right the we corporate to we've year which growth adjusted and the slower eyewear percentage online overall market. three took softness reducing expense align of levels growth the moderated with a size, improvement line, and EBITDA in spend, basis. in positively our view still our as actions The year-over-year. combination XX% versus was year, this the as We half CAGR down well the on year-over-year,

and ahead is focus have pleased generated adjusted which million most last $XX.X guidance. our to up EBITDA, We're profitable growth. of in year recent has been always Our X% on driving from

We due team. headwinds COGS our namely margin of long-term from are these fixed the our investments, the proud as deliver portion gross and store even to optometric fleet some results face expansion we to of our

encouraged cautious predictable wide demand their our maintaining and view results are consumers we're lingering near-term. are in effects in this the Industry the a While behavior steady our quarter, disrupt normally of by pandemic continue time category. shifts how with softness we and money inflation spending driven and to shopping

and continue expect resilience temporary. the long to outlook be the optical of to the and term believe these in We growth for headwinds industry

well We believe tremendous. to team sustainable innovation the and embrace XXXX our Until delight through walk But year raising our members for drive focus by in We're to of on and specifics And demand who in continue Steve growth. our focused EBITDA projected diligent range adjusted revenue end confident execution we're the $XXX customers create than the million. for range impact. materializes, to to $X that investments and against in opportunity are will market guidance a million. million and also and low by control, full smart incredible future high expense what moment. management our of flexibility, operating remain a Warby driving long-term us strategies $XXX volatility continue year end million in we more face $XX the vision also through The and $X within our our Parker position will increased of the raising continuous full previous remains billion is recovery growth. we’ll care leverage

we've million. growth expect for be I'll it quarter. our that, between the the to to we $XX this walk year against $XX turn to over adjusted to Dave million drivers So EBITDA And primary with progress now made through

take is and each to range continue customer, of profitability. market mentioned excited our and reflected enhanced QX our customer few our in record more channel of to initiatives. last to over for unique products QX investments set of high experiences we us term turn, expand made strategic us are scale to The care the have and accessible share and we against offering progress in services, increased resulting economics, Neil our have which expanding a we serve eye our both positioned best in made the in share long and year-over-year. customer years holistic better improved I'm $XXX Neil. returning in customers. future able revenue omni Thanks, to which average per this and up channels as are by and up Evidence By new X% making to

rather increases, multiple Importantly, price higher to customers was the supplies and to primary a but of annual to from due increase of higher driver purchasing customers products. point contacts. like opting not of in offerings progressive this price percentage due

a hold more conscious are believe where as in up to that consumers unique to challenging our continue economy, proposition We value their dollars. about spend will well

million months. stores in we'll of we with in talk strategy and revenue four four Now XX channel with fleet, This track The line annualized target omni of our of through environment performance to XXXX. In historical on our XX on opened track QX, Despite generating with the primary average lower back our $X.X including margins on starting continuing stores remain is our to each stores end. within average, XX an operate new retail are presence. opened XX%. our traffic, cohort stores basis, an open year pay wall in with of on growth consistent to remain by stores on target scaling in across our

enhance continue to e-commerce experience. also our We

a experiences, it been see winning our try-on than customers sales. for they Previously, week, app. virtual Just It within significant making tool our of engagement browser our our launched iOS our award easier we has look only ever various how virtual in try-on last in and was styles. shopping to available driver

all of platforms. We across are excited to our technology to e-commerce this now offer shoppers

we to business. Second, core expand continue glasses our

us addition by one former Babenzien, menswear we introduced two and and supreme fresh to product to Noah, with Chloë to and introduce brand base. our new are opportunities our founded great Collaborations customer fall XX core In also like to creative our director delivering unexpected launching this brand customers existing another actress collaborations quarter, these something Sevigny. with while collections, Brendon for

in We This $XXX. sunglasses new to nylon. soft Japan, launch collection based pads collection minded grip, continue constructions feedback, top was launched first and XX our and our elements Made eyeglasses durable these ultra-lightweight for ever added also innovative line priced performance feature performance the extra hinges, first on launch in at lifestyle including TR customer of also July. rubber like

business. our business we grow we're us our than Contacts our with their in also prescription and continue before. ever highest X% expanded QX from glasses sales. continue as wearers X% in can quarter, range, prescriptions building which finally and of QX XX% growing contacts increasing XXXX This fill to meaning are gross scale category year-over-year, progressives, to nearly XXXX. of to a more percentage price total And glasses [Indiscernible] point margin highest our

our are and propensity replenishment in XX% to for In As lenses given of value we're highest a optical the on customers eye Fourth, customers glasses. the these of contact our account go of retailer. contacts of exam contacts, investing typical typically to to reminder, purchase XX% customers sales business. some of nature

our of stores. within we new existing rooms fleet, exam to two quarter retail a This and added within total XX stores XX

stores offered to year those more this stores talented optometrists. on XX, service provide track continue incredibly than September and of As in to XXX in and or XXX rooms, end. of patients serve by our XX% To our retain exams, hire remain we we

our converting You'll annual we model. goal that last of quarter recall to completed our XX stores PC

at to This imaging to to a to additional like their the the additional seven this continuing recognize locations, an signs in hope a more over and model, patients revenue. stores Parker experiences innovative of an person converted we eye which charge. disease. We also affordable We're experience stores At pilot service includes convenient, onto PC pilot to us rolling eye services differentiated closer exams the can more quarter, telehealth allow look imaging, retinal exam giving us out enabling roll now existing that locations make gives new and add and customer technologies eye eye for our and within control more new the coming exam retinal quarters. will optometrist more our added and eight Warby early us patient's in out to greater This to detect market.

and XX% and to or slow initiation innovative term in to contacts, expected contacts prescribe visual services, my level that of share breaking children sightedness, to are of of are medical more as myopia be order already reduces XX%. the eye doctors by products We aged myopia to the innovative benefits proven which introducing like progression must these the we're of the my to X us. XX children we're help to near to in just pay for visit add like than we're for our enabling in sight glaucoma to addition In soft one continuing help products certified treatment. services progression the power and is at the slowing services, sight also risks our myopia have progress proud by impairment with also is and ground such population look the Myopia XX by Doctors and those to in To complications on of global consumers market, insurance certified. see. XXXX, contacts customers good products forward making of shop diopter to the first

Blue Vision option year Maryland, over reminder, Healthcare the CareFirst Northern is in members the in through for that and Vision program. total, an Cross with employers. in an United network serving In option XX in employee became a announced with District over is Shield earlier live. Parker Davis Columbia Davis As Blue select with we X in Shield now network network became vision through plans. insurance QX, well Blue Warby Virginia, federal network of Cross Blue this members the Guardian And We as million currently Parker as network with members in Insurance we vision for of Warby million

use In customers, $X of network pay eyeglasses. for of exams a of our for out customer portion glasses, growing meaningful to of and our contacts benefits their base to pocket addition out our pay in-network often of their purchases

these of benefits make for customers use even us. ways are to it in We their easier a investing existing to with number

insurance related and consumers than significantly which on we’re of out vision we network than partners with of growth progress to COVID We're rolled us often our $XXX pair quarter, the using pocket vision market. to According their or insurance, enabling Warby surpass against shopping people's which on us for continued within our initiatives, impact eyeglasses, our help higher mission a Overall, resumed spend pleased elsewhere is to a globally, years targets of less year. millions using more after messaging a of buy to deliver expensive out will vision out our how to council enable of give with vision have customers track that pair operations our long-term on thrilled additional us average at that challenges, lives this all and to on glasses in is XXXX, works pair for are ASP. of strategic understand provide all. Parker, benefits on This when distribution

year-end. to macro inflation consumer dynamic to the now continue through over their continued challenges to and day persevere consistently us and and to We as and us determination we approach in front a out. Steve. as pandemic in high company. look pass for will the economic the and And work to to managed success in And and day I'd navigate holiday forward of incredible dedication it manage effort hard from team of emerge I'll much through way we Their this season allow period the pressure environments. we believe we a like in thank our stronger

Thanks, Neil with CAGR we laser growth for focused QX to a QX long the in versus everyone. line, and pleased and to store ahead to making of operate. offset which XXXX expense smart the our of productivity coming compared end At to our third investments call. saw above period which the revenue moderately was $XXX partially shared high we a revenue. XX% business. incremental in call. XX%, moderately million to earnings were lower at Revenue starting year-over-year We're same despite This continue above e-commerce active to intend ability than we year high On to backdrop through of three This our customer XX.X%. per our on experience of XX% customer CAGR we per when quarter year quarter average product an Good XX% three range like provide results X.X% and bottom come support term and and profitability We've revenue reflects strengthen X% expand on period last million, with top in while versus at on up We macroeconomic both the and QX and Dave. increase morning, the high you projecting line X% to our for guidance report revenue a the to finished in of XXXX the basis continued $XXX. average quarter walk our management the more customer million. of to we which customers, $XXX.X driving we level provided the stay same our X.XX continue XXXX, million projection our to I'd at in difficult and of $XXX year-over-year service ago, set. our as the increased the [ph] increased by year came scaling case expectations value customers was results

and customers basis. reminder, XX-month average a both revenue active are a customer trailing As measured on per

by our customer for customer a revenue driven and a average Our progressive active increase higher including order factors average which of from the average growth glasses as with in a as lenses in per an quarter of an well value by increase top primarily orders selling line number mix price. in selling have highest base, was driven

our a still Our market well scaling expect up Progressive further gross third is we and quarter XX% to This XX% represented total XXXX, below compared leaving from business. from when glasses of product substantial margin XXXX. sold XX%, for in average progressive leverage prescription lens to ARV realize of the of that QX the runway

of levels. when our at provided we This in observed XX% as year. retail the mentioned third QX updated At for time, XXXX of trend approximately that full business observed in above and the August quarter. we by store productivity, we XX% levels in of the guidance store came was Looking channel, productivity at consistent XXXX

We at half September we in quarter, with retail the are second and experienced pleased the productivity of exited with levels. the productivity during that improvement XXXX incremental XX% of we encouraged are approximately third

has spend including marketing remain the focus a in of in As by a durable these year affected our we and discussed, consumer reduction as unit performance goods, a range profitability. Despite of spend economics been on this factors, factors, meaningful stores business on pullback strong.

open XXXX, stores had we XX XXX months of As or for QX more.

average target revenue, store to As and in wall on million these our drive generated line profitability. generated line of increased Dave schedules The managing XX%. margins match in to annualized top stores results conversion for lower team across achieved AOV $X.X is fleet. performance rates and mentioned, strong with these our and through in We've store consistent by driving

business. healthy a see year e-commerce trend for three to continue We our

a XX.X% year moderately been revenue million QX of of the the levels. three observing year-over-year, quarter, XX% e-commerce exited XX% QX profile, growth in business basis, in guidance XXXX of year-over-year earnings QX and to than QX XX% we had we QX shared in for overall QX mix Our XX% spend On QX, we CAGR compares XXXX. business, and was perspective, ecommerce the our with to end revenue was XX% by in year on We call, as lower from versus represented started our XXXX our line year. we pre million to year. high X% e-commerce despite last this of maintained a growth consistent in dropping in marketing last XX% a the and of pandemic year-over-year in This QX. down $XX e-commerce From QX XX% saw as QX third from $XX which

loaded and outs. before each gross dive shipping, remind margin, salaries of into the is depreciation frames, on accounts gross that Moving range like fully to for as labs, we and build store rent, a customer of on gross lenses, costs details would optometrists, I optical store to everyone performance, including on done margin we have margin call our

also margin our gross expense and stock-based includes lab employees. optical Our for optometrists compensation

are As in while costs our have shipping input more costs. with a including of In last approximately as thoughtfully fixed expenses XX% and chain, on of have frames, the we XX% reminder, we and seen our been the COGS nature. as we've supply in call, our or lenses pleased throughout talked products, about, stability variable we general, managed our

gross margin QX decrease of the speaking at Adjusted continued came in XX.X% compensation. X% our as I total QX to core gross comparability, our in excluding gross QX care a margin be in Expanding key will XXXX of per to business. in XXXX offering driver in was primary to scaling XXXX XX.X% The average compared a offering in growth For XXXX. margin contact from stock-based of revenue X% QX a holistic and of increasing percentage part in customer. lenses vision contacts is our the driver

lenses percent given margin cycle. versus their are gross a contact they accretive frequency to have higher offerings, gross lower purchase subscription margin product other like dollars, and While purchase our

and market As from for a represent of reminder, billion sales. to the a optical typical contact lenses account XX% contact lenses retailers anywhere $X.X XX%

Next, XX in same goods. There's net portion of XXXX which or X% optometrist rents, salaries an XX% in and XX course our company stores naturally store stores we XXX year-over-year, last over as as from the added saw in retail a growth over XX% revenue build which period. compares increase depreciation to of stack of base more areas increase stores September of the year-over-year increase XXX months, count leads and which of going our elements XX, to of and store of of from deleveraging cost outs. the September These occupancy XXXX, same regardless XX% fixed store or retail the We represent store COGS of revenue our to total of an two gross fixed margin the revenue. generally remain new in XX,

gross pressure year-over-year downward we on new increase optometrist significantly overall optometry saw as hired rollout salaries in our an also from model. professional for of the PC stores, corporation and our We margin expanded or

sales existing XX majority optometrist model XXXX, compared are stores XXXX. store exams model, revenue therefore stores, relationship at and product our PC recognizing from an with QX of and of the from converting where The these with recognize had both end stores and XXX therefore, the the we our we to of directly end been independent XXX engage optometrist stores the portion ones of are As QX to where an already stores doctor. conversion with salaries, doctor independent an operated of at we XX are a PC significant we

and we gross margin near contacts expect term stores the service margin. margins the are the on we these As headwind, model, alone than PC lower convert to exam glasses the gross given our

exam enables to from the revenue gives in us that the factors experience, expect higher capabilities to Two benefit main and to eye product drive margin over control it greater exam gross in leverage. We our customer us recognize us long-term installer rates will exam purchase. as investment results in continue conversion eye

business scale is which our progressive a prescription our XX% ago, highest Firstly, of XX%. year of than and is our industry offering we highest average progressives less margin approximately gross up continue to which business, the XX% for and priced half from account

optical to at Secondly, orders prescription two scale our York in Labs we portion we that owned Nevada. continue the and of glasses New Insource

there many points previously improved account including refund at orders we discussed, labs, turnaround see that insourced of QX and prescription faster year. at an our year of XX are our from We've two of NPS, orders, insourced jobs increase time higher labs versus As our our of percentage saw rates, for by optical over QX margin. lab this indicated plus gross labs optical in lower last benefits XX% we optical

SG&A like XXXX or came QX for talk revenue. $XX.X about XX.X% an at to Adjusted $XX XXXX, would of increase of of SG&A I million of compares revenue, Next adjusted in This or of SG&A revenue XX million year-over-year. expenses. QX points basis approximately to XX.X%

was SG&A year-over-year up In terms compared to dollar XXXX. X.X% QX year-over-year adjusted of growth,

SG&A driver general of was those overhead SG&A like try-on was related excludes company in retail SG&A in listing. to two company of spend, non-cash This employees percentage main an one-time costs, customer year-over-year including noted Adjusted increase includes as costs expenses. also concentrated and main the a technology, public in three stock-based program, expense, in revenue infrastructure. our our headquarters adjusted like compensation associated corporate direct QX, we costs business our and these increase reminder, primary level increase with largely components, overhead and investments public costs did The expenses. our covering in expense, home public our excludes salary On quarter. company, marketing a we year for approximately corporate As experience we the represented incur approximately the QX, operating of In related $X.X not which costs incurred million to ago. areas, a a in as and same

We expect to start in were a leveraging we public company costs comparing in company. the fourth year a to when public quarter prior as we period begin the

in We category of Try-on technology SG&A virtual to facing stores also includes sale wages headquarters of app website. for invest built internally platforms to initiatives like employees. continued our number benefits a our our and retail and customer expense technology our solution key Salary experience and enhance and customer for within for point our

sales. As our in a lab cost reminder, salary optical eye are expense of included our all for employees and doctors

million retail difficult customer of but expense this salary optimize are to took as on and percent as savings teams next track million to continue we necessary people we retail environment expenses further action year respect of in team $X and and the for certain align generate structure in or a $X with our to in year. in time consistency QX With cost $XX our this as our by corporate announced full to to reductions in August, the the expense, $XX along approximately remainder and with to This XX these million the G&A step year. XX%. spend, salary we We also service time revenue million savings in schedule our current to reduced non-retail anticipate realized

Marketing marketing to optimize QX, expect QX and quarter current or revenue at million period. double spend the XX% lower marketing down made growth we've to the for we've QX of outlined, previously the was revenue and came compared spend was environment. to which same year. down year, year-over-year and compares last it from XX% points from of the in changes nearly $XX of also This revenue. of to of and demand Marketing by of to this forward. As $XX remain in reduced sequentially million XX% low $XX year-over-year, to when continue revenue levels expect X.X% and make million in to to spend XX QX spend going digits Since over XX.X% in

$XXX adjusted XXXX, a For $XX.X we or guidance our EBITDA the deploy which QX period. expense this structure X.X% margin actions higher a our and of marketing operations. our above also growth adjusted of to third of representing The support our margin and margin end and sheet continue high basis million generated of to This cost to cash year we EBITDA compares EBITDA We of range. points which in EBITDA compares adjusted equivalents, adjusted $XX.X XXX year. drove corporate cash revenue on this adjusted to of finished combined X% an versus will reflecting quarter the million quarter, sequential in the X% ago with to revenue deliberately than of the expected basis million adjust quarter with EBITDA took strong balance

to million upsize $XXX with facility the further credit increased million. million $XX Bank $XXX also to our an to ability Comerica We from with facility

facility, plans this We options for down to have draw add but no pleased as are our of increased on liquidity capital now to to structure.

guidance full historically the has wanted year, a QX QX. in our to on business sharing seasonality for observed we and reminder provide Before the

benefits. of concentrated As demand demand seasonal customer is spending usage we buying flexible most and it the This moderately observed due to of relates the of to during the month the and top final week December in holiday health higher line, year.

year. final revenue customer, increased in demand investments Flexible product the line lowest we and investments store extended from of investments slides. meet and QX up recognized holiday for of related step support to following marketing we Given orders is make that week to and elevated the we we placed to include, orders of see volume store year earnings in selling season. QX our significant shipping recognized to Spending customer a expedite our typically important questions. we from generally accommodate quarter And holiday of higher revenue the support delivery demand, growth the of year hours portion From as margin experience support These increased sequential perspective, meaningful in the timing, several QX call bottom from benefit current you generate see as to as a a staffing traffic can to revenue and QX higher customer well to staffing as to the as

raising the EBITDA a than look explain our a fourth up We're Omicron. range of the different EBITDA due of $XXX view just XXXX I'll on XXXX of have we XX%. quarter, from to Based impact year to to quarter moment, a million. of represents this as pattern years prior from quarter guidance to current expect in full We full $XXX third X.X% adjusted our the Outlook growth million with our XXX $XXX further a outlook. revenue and performance to year million This year our revenue moderately XX.X% lowest XXXX to our up of X% increasing to of past million of range QX over

million be adjusted $XX compared high our margins our to EBITDA to moderately million. and we guidance raising prior and EBITDA X.X%. year X.X%, prior compared with range to range projected low of X.X% EBITDA Adjusted million million of are end now the adjusted prior of now for $XX are to X.X% guidance $XX expect the to of with $XX For between end increasing the

we call, gross approximately mentioned for margin year. expect of the our we last as XX% in full Lastly,

fixed a nature, doctor positive, seen our on lens depreciation the than growth made COGS our continue and XX% view effect gross we as which de rent, Roughly margins. will anticipated to in are of which contact contact business store are faster continued of lower We This majority lenses in of have as up store margin. salaries. a levering have have eye

We customers margin levels. to plan products leverage see and our progressives, store through to e-commerce our labs. fleet expect to margins offerings investments and have in and these that continue from scaling ramp serving We like as eye in term, store de return a on effect gross growth higher optometry gross the exam short levering will as and margin from optical to medium own high continued

XXXX, XX% of to $X.X revenue this full year EBITDA million million, X.X% year-over-year and and X.X%. guidance to QX increase margin $XXX.X of EBITDA For $X.X million an $XXX.X of adjusted adjusted to implies of million

maintain are the in date, heading believe encouraged it improved fourth prudent various holiday December the to to trends and quarter and to fourth we in productivity macroeconomic factors cautious is consumer spending. September, the a While the we our store season into of given view quarter affecting with the importance

followed remain both quarter as we for consistent store QX in XXXX recent QX then to the and generate We we focused Historically, and to e-commerce following pattern EBITDA QX of a versus year, This that will first XX% reiterate different QX top of by with driving productivity adjusted discipline, previous year. strongest are as want QX EBITDA positivity be decline trends. we the we projecting into incremental quarterly adjusted have projecting our profitability. the line, year high continuing For at the and that the look maintaining ramp three seen adjusted in with we mid from this our in on years. spend CAGR year run teens, QX sales strong and we're from cost and level will QX QX EBITDA expect

or in of $X.X as adjusted In of EBITDA For up million to revenue. reminder, of a adjusted end we $X.X to pleased of of and were EBITDA in we adjusted million implies adjusted point is adjusted step than of of This revenue, improvement generated HX projecting HX. EBITDA $XX HX revenue updated EBITDA basis or which a that margin of we're revenue. of roughly X.X% the EBITDA on XXX high our EBITDA to QX, million lower adjusted in EBITDA range adjusted adjusted to a from see this X% At X.X%. in year, HX X.X% translates HX $XX.X margin for EBITDA million QX,

next economy economy, we'll affecting scenarios year on in formal our continues based associated XXXX. stock provide Finally, Stock-based is and our and is and QX our multiyear compared the the optical both long years and on stock to compensation XXX.XX. to dynamic as to for perspective guidance result reminder listing, digits of RSU unpredictable. And from based with CEOs to based next of We'll in XXXX, compensation mid-teens we The to XXXX, industry performance and equity as XXXX XX.XX our a year. grants the continue of in starting respect which to our be direct in net March trends the update for term above of the and in call targets forecasting with both forecast low for CO with consumer majority single price XXXX, best expense the as to of outlook as for continue XX% a are on our revenue percentage evolve. be

particular, at XXX relates XXX focused to EBITDA on of profitability As we incremental it basis year. realizing points remain per adjusted in least to

from we HX baseline year to of this our EBITDA between be we next of which HX XXXX X.X% is For are EBITDA to in and expand XXXX guiding X.X% the adjusted margin, expect year. margins which revenue

revenue joining come that roughly low from realizing spend the normalizing percent double We and half this providing from call. general in improvement you QX a early specific gain year overhead a finish of expect and this We again corporate forward into more year. of for digits operating in will we look incremental half related of as savings next at and Thank and our year full today's to earnings guidance as marketing expenses. call the commentary XXXX salaries other visibility to

that, Q&A. for the market ability our for our up open levels to our focus ourselves optimized operating conditions improve. challenging we'll We continue share good accelerate in can base macroeconomic position about control demand, and now With on current With profitably once to feel things line we growth this we expense the of increase environment. to

Thank you.

open. first Please is question Sandler. from Yruma from your Our go comes line ahead. today Piper Ed, Ed

note questions. first, had morning. actually I old about taking my experience. thinking I Thanks just to Hi, that good XX-year happy model. great glasses eye guess for your the that I being were and guess her exam first

Amazing.

Thanks.

got a I of you box, know does higher obviously points. then term, us in change that understand follow as just you contacts the should penetration up, XQ kind economics longer the seen First, the to I progressives? you've as PC I and near that the think want term, have, Thank we as the help deleverage of with year's affected? don't the a you both but XQ quarters. Flex know leverage rhythm guess obviously a on maybe the some past going year. about you've to how Obviously, both I the of a about model, provide continue how I a to spending, but And ramp next guess And be similar that guidance different for changes kind of you've given you. Is to progression, think yet, as in adjusted this understanding years of that straddles know in fairly we've of EBITDA

Thanks, Ed.

New behavior typical recognize a XXXX spend, of anticipate should where hopefully we accelerated is maybe a last of of last their do and revert part Year's. and patterns Christmas saw to we'll irregularities start be that we that and the we we And, glasses. that rest see receive do at with and as that the particularly days during pandemic those close, QX revenue So question some customers December to coming end your of QX of the and once the customer reminder, QX, should the between

to beginning We back-to-school the, they which gets a in final behavior those did medical their in people year, return normal sort eye was do see year, exams, placed anticipate promising. that seeking as of revenue are orders the lots the the year. other of of we of treatment recognized of And at more to this start as normalized days January. So it at habits will right

So we line of in sort next certainly be quarter-by-quarter anticipate year, with do pre behavior. pandemic to more

on that slides a have our adjusted the reconciliation we adding in which EBITDA XXXX. just EBITDA, an and And, slide in earnings to back, has back to

of the that all with Most look that recently, visibility reference then into QX good March. the FSA a saw on lower pandemic. profitability pre saw back spend I pattern first provide we patterns would have can in the lot three as a of XXXX in call the as see to will profitability demand the in QX data and you quarters of holiday our point, So to and EBITDA we year, more we

your into leverage about And question our first model. in

in been as we last we stores period to PC convert months, Over several and contact doctors the the have as investment of nascent lens the business. course an in our more of we model, invest our

are and all investments signs adding overall and And kind where our of exam on there in so they're we're category headwinds a in demand to points. there that is period contacts, our across of data

will in we of base. that our recover recover leverage to as The our reignite demand the increased us see stores. have to some category store we across allow in of traffic to into start spread behaviors the nature, the we as see fleet start overall, shopping that so And cost fixed

Thank you.

Thank you.

line question next is Chen Cowen. from go Oliver Our Oliver, is from open. your ahead. Please

segment great, And on sort customer seeing And well is first with for then the of any seeing? Thanks on what And terms taking the question it's on or might progressed how so health, for of and quarter? you're there on question do what traffic translate Hi, whether great of around much of This your there? holiday hinging guess there. in promotional quarter does is pretty sort Katie is glasses in it I our was our And you productivity, into how pressure, guys. second sort contact kind Oliver. correlate product that are sort you. question. our the you're of is that And Thank season? exams? think that the Or of productivity? more expectations actual through the more sales segment

for questions. the Thanks

On the line saw traffic we productivity. that front, with in progress

products, not discounts to designed And increases have offers blanket on really currently encourage designed So we of with as for the two which we was but the throughout encouraging. to saw our purchase customers, multiple then, really on promotional front, but are our us. kind moderate customers they're quarter, products

us. then use who who business credit And an annual of buying credit for new, a is the they our of to still that glasses. low. relatively is And And prescription of first contacts purchase can the our $XX customers annual supplies customers is with as percentage are pair a so contacts supply purchase

we valuable as buy people this shopping find to so us our basket opportunity glasses from an some is and And size. who think well, that customers. about their of for cross glasses tend customers us contacts to be most for to But increase encourage also to

also order. their pairs customers XX% not hundred past prescription are cost buying save offer, and several our pair where of other Glasses most about they multiple the glasses prescription glasses of multiple from a purchase We have most at have add off an in because places. us get who thought customers dollars

introduced buying actually and back of first customers thinking this is an accessory. them up who frequently that is then. people for, took ended then offer XXXX. for about glasses that advantage purchasing additional as think designed more pairs and coming we of so found in we really since an that And to offer And This

looking through the kind attracting the And products. holiday we the then we're to make end buy not not more don't becoming we're for additional are best up purchases. who encouraging people that types But those to of finding just are of and these so hunters then back or more forward, and loyal bargain of end And deal the promotional brand. coming activity going more And customers subsequent anticipate year. the offers

you. Thank

described. onto Dave a And just just few what adding comments

that and we've now increased QX at come opposed XXXX quarter-over-quarter, what traffic at on And stores a seen where are at stores and difference really we to increased productivity levels conversion increase the bit suburban at increase versus at to AOV of seen approximately suburban XXXX is levels. bases additional XX% running calls our We're we most retail stores. and And see driven little that productivity are exited of of of approximately some stores urban urban XX% of In at a earnings across roughly levels. to point provide has XX%. of so we've continue XXXX running color store in terms up difference, levels. between XX a It's stores. roughly as few just productivity And by store XX% increases is the

help with points round additional productivity. happening relates out store few it to So what's a to color just of wanted that as understand

That's very helpful. Thank you.

you. Thank

Our from next Paul Lejuez CITI. question is from

Your is ahead. open. go Please line

Cheatham for everyone on is Brandon this Paul. Hey

want kind that's, your store to openings. active talk Seems despite, of of customer So count. kind somewhat like I about plateaued just

all opening pulling do on like, how wondering, you're about, lag think you was openings I opening versus forward? or back your store store would cadence, speed openings, which rethink you store going count customer continues at So the consider If it to your stores? active

operating the the industry, Thanks is the in and are environment is not time, an optical seeing right, data it's a we question. is declining. for we first based for we're on see long where, that the and What time as very predictable, actually

been So the more been market share, than lower traffic as but stores fact challenging that has in customers, these, this we're has right, we're engage environment, typical. growing it gaining to right, to newer

marketing the things industry. did we deliberately sort seeing back the pulled and intentionally QX, of were One spend, that also we what in that given right, we of in is

But And in high within our stores line we stores continue have in sort normalize our of to stores, ROIC, that Now double sort the expect resulted and back our, approach are COGS, pre we similar to low are performing of in qX. lower spend right, QX, levels. new COGS we XX%, customer do to right, general, pandemic with expect are digits paying And marketing to from XX of as in our sort months. are down accelerate we growth. and that older

and So on as as return that and able to then we'll capital, long wall of continue have plus, stores. get we're for XX% that margins, up or our have target open also to

Is you you versus network? in have opportunity million customers be can, I do in guys. thanks out could that Thanks. in think And covered insurance. there? lives XX shopping up you any Got if it. Thanks there one difference network follow shopping for the What behavior under are between sharing,

making integrate about to to million up to of insurance our with customers opportunities differences eligibility for we We're general, benefits purchase we easier so network making make continue life will as to be In existing to XX as continue and non-insurance excited use can we major of people seamless found possible. customers. look had in pursuing also us, people total. that insurance with even that to reimbursement. and Yes, kind to directly options we, it opportunities their and their out add haven't a I

median income our insurance. average household not majority is As reminder, or base have The we're of our option, in do tends customer our network customers over to $XXX,XXX. vision not, Whether a for the are as be primary driver or and $XXX have they're whether cited, people pocket. network over benefits, insurance those with in of we of visited use not. us spending out And purchasing who

they'd more coming out spend us similar pocket for So to than of products.

we're to insurance from always even customer looking for us, we purchasing a seen base. easier to make so our And haven't be customer barrier things but

Appreciate Good Thanks. luck. it.

Advisory question interest from today ahead. go line Please the In Group. you. open. our comes Thank last your from Telsey Dana is time, Dana, Telsey of

see the morning, Good to everyone. progress. Nice

end should of the opportunity you. the year's we How be time watching at Do increasing? like revenue, productivity, and look online revenue spend. that store Given of maximize retail act impact could this of into you're doing? year impacting to the of expand is is year the versus even anything from forward? revenue that year, you there on that the Thank you're it for going planning do to balancing And nice FSA of potentially on you Can more you how this store the also last and January? Omicron end which see be XXXX, the period the at the update it the think or

then patterns. depressed over pandemic a we nice event, to nice, barring we've then given this are certainly are on hoping more we saw or like we're pandemic the front. Thanks, And expecting look year, years a season kind year, what and and And yearly bump expecting last looks another on on a pre Yes, basis to the seen shopping topic, holiday activity first a Dana. couple just on surge last some we more unexpected the certainly the hope, to, similar XXXX. of on that last trends, that

think just levels to of came for throughout XX%. nice it see XXXX right. expand of about sort we sort about We XX% quarter, an exited was as into quarter, average of XX% the that retail And productivity, the of at

we strong feel So have into like going momentum QX.

and now features on e-commerce first in our to a launch were scale, browser, Right, to they've customers, true mentioned. as invest glasses delight from we And have of Try-on. of what the sort online phase we continue sort offer Try-on front, negatively sort features. observed new that is the launch virtual more of wide we'll On virtual to of to we perspective. bricks continue In new than that of impacted been industry an sort mortar general, we've wide, sales sort market

satisfied expect So sort here Parker, sort e-commerce XXXX we’re going and that of of performance forward sort for sort to just with beyond. very and Warby from in of grow of

do. make And We little and do revenue we XXX sure in that range digits. roughly points, about low to marketing support at help expect a to of talked this doing and spend holiday we marketing of marketing in we in as basis XXX XX%. QX And ramp FSA spend, in as everything that us the demand within we've to orders that seeing elevated double of we're an percent as revenue, those bit so percent would demand year a in head I marketing see orders. and the to to see QX December QX, normalize spend expect capture to spend the we as stoke came a into of typically And can to

just one Right. And follow quick up. just then

see think do the how this Should assume about of it change? foresee will about store As be similar next number you you think new any openings to and it or year. year we for you

assume It's will this that be to safe similar to year.

you. Thank

closing Thank you -- remarks. and for

posted into Great. thoughtful for and again forward you you holiday all We participating keeping to for and on call questions and see March. your we'll season today. heading Thanks Thank you joining look the progress our in year-end. all of

for joining today's you Thank everyone call.

disconnect now your may and day. have You a lines lovely