Warby Parker (WRBY) 28 Feb 242023 Q4 Earnings call transcript

Ladies and gentlemen, welcome to the Warby Parker Fourth Quarter and Full Year 2023 Results. My name is Neil and I will be coordinating your call today. [Operator Instructions]I will now hand over to Jaclyn Berkley, Head of the Investor Relations, to begin. Jaclyn, please go ahead.

Thank you and good morning, everyone.

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

couple begin, reminders. have we a Before we of

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

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

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

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

recognizing are making our work our cash customers dedication experiences adjusted our proud financial to speaking while up want eye make our all. delivered eyecare quarter for everyone, we have our Last I of improving XXXX EBITDA X% consistent of and full we year revenue that joining revenue you our flow year-over-year a growth hard mission approximately spend margin innovative looking to XXXX. the achieved and a a results products us call including like and But XX% It's long-term best for stores, I'd contacts exams nearly free new adjusted start of to and for be reflect positive respectively and and XX% on expanding provide we more investments and basis against continue first, and closing today's to opening lot have year thank growing EBITDA each by and to the like plan Welcome, this moment pleased points.We vision year significant morning. majority to a We'll to forward. progress to XX to than strategic and year delivering while double-digit take the scaling of products X% precision introducing in while new initiatives; to progressives. team's XXX

you'll XX today's have hope to We our Buy away are we more pairs Pair milestone people of program. a than we're a content. call glasses But distributing also proud what in to that is need million major Give a through surpassed Pair, from not of take

the We for preserving top to have operational while focus seen and far year-to-date.Turning momentum higher more are so to we for A and be top line growth with and line we discipline plan. improve and ambitions, rate positive in profitability. particular all will growth our XXXX pleased expanding beyond maintaining our customers, have

categories believe over percent and to response customer higher we efficiencies absolute reaccelerate to continue and we drive and in in opportunities a X There discussing You'll are we awareness response exams. We actions since for and of from be expect plan to our a but And customers. insurance make we both decreasing been and we in spend. to customer key ability profitability growth plan pleased will operating start in and This the few full these year, expect outsized in first XXXX overall that these XXXX. levels the year the best-in-class brand in signals product also growth in first growth with recent glasses to to low three, on marketing active will marketing we last years. meaningfully off invested Two, foundation we coming brand revenue XXXX. marketing from spend it contacts time in lower in hear beyond.We lot a teens basis growth. driving to by positive will in this the the basis confidence retail we want area, years. from incremental efficiencies leaning clear like sustained progressives, XXXX leverage XXXX e-com Alongside gain we which We'll are our recent for learnings. to priorities a since different as expect to that growth demand year leap consistency our in drive strong increase X We've also serve the time and than last take into reinvest spend where to making forward economics last of spend areas, gives and X expect an X One, or category. we areas of us adjustments as new keep in on years the also

we demographics. reach other see to We expand through strong returns mail, to unique SEM channels partnerships, direct variety streaming where drive top expect collaborations and to and customer awareness influencer.To also continue a TV awareness, and of to funnel to launch awareness opportunity growth plan drive including we've of our audience linear and and and scale seen initiatives

store ago. style Hayes in Emma XXXX, X with launched visited icon since connoisseur, worn collaboration example who and For Chamberlain, glasses has a our Parker first years Warby we Valley she

Following her to with again collaboration, the work excited last XXXX. we're success in year's of

last than as our billboards this manner intentional XX to driving have prior the a year awareness. of vehicles in that to expect active store to to service of we efforts We drive trailing media years. also we on expanding drive as XX-month in exam budget part Our growth ended a balanced To X.X% we increase efforts, a towards average awareness acquisition openings and XXXX revenue year. believe more local customer we and allocate basis. planned drive in in enact XXXX well.Due retail efficient plan active X.X and customers we store customers, with help million saw These include channel, awareness will an between these our customer store than portion more utilization per traffic exam amplify

nature XX% backward-looking is the still down spend of metric, half impacted marketing first it the Given this of in was by which XXXX year-over-year. being

accounts we've an call, are update some individuals or unique customer represent individuals. serving. multiple number will the the Later of we provide mentioned Steve of As households in previously, these on

and strong industry. believe including a cohorts it's retention patterns XX within our metrics customer or over differentiate Importantly, across for we rate brand repeat of the households, individuals purchasing and to whether continue power us roughly our ability the months XX% cohort.We delight the to revenue and over of to customers months XXXX XXX% see retention continue XX

plan a scaling focus, we to invest of how industry-leading customers area want further meeting to our As omnichannel shop. experience, second and in they where

excited year creating this and to omnichannel and unique anticipate In growth from to first and serve XXXX, discussed, has basis due since a our the XXXX see behavior category to to will a few be integrated enabled In since customers shopping both low year positive channel operate first channels and we and we is time underlying fully over up XXXX We're this full limited e-comm drivers.As negative and our to XXXX, overall going in positive effectively us e-commerce business. in were between be benefit on was our fluctuated. drag channel in expect the channel in Our experience last we channels for XXXX, our spend increase single for just case the a years the forward. the capacity our as stores digits forced XXXX marketing full a contribute will few XXXX. year

on in the and requires support channel to the impact our last growth years. of stores observed in drive marketing e-comm pullback of Our couple our more marketing we

The renormalization pandemic. out is the channel second shift coming of

rate business front was but e-comm pandemic. XXXX, at that to the during a annual XXXX XX% Our from growth of growth grew heavily loaded compounded

between retail have expect and e-com transaction our positive more and returned stability We e-com going to channels between now mix and growth forward. pre-pandemic

seen purchasing and Third, those between within smaller in Try-On been a than driving have Home after business, a continue. this trend we completing purchases we has glasses shifting expect past the Try-On versus our of dynamics purchasing directly.Home percent e-comm customers to

core our since Our of was has offering service a been novel part try enable in XXXX on and free designed potential customers to Home Try-On launch as a to glasses.

Android; methods and over stores on iOS have on convenient to our other our we frames. customers web, that Now have virtual in try-on XXX try

and shipping while costs. Try-On from see ROI lead direct requiring timelines operating from we purchases, strong conversion inventory, shorter While glasses still led high and purchases try-on to purchase rates to less Home

Try-On.Fourth, lead growing business, advanced repeat and experiences online. and Going see more key transact of forward, opt the retention in in we channel being online, trends customer our returning virtual strong contacts to e-commerce majority us Home customers purchase intentional is tailwinds how our include as where and further invest and which for our of while you'll many personalization the with

With Finally, in stores which e-commerce in store's effect markets a see less as operations, coming growth markets on we have the to XXXX enter generally we headwind sales year. local versus after new of in abates. for pressure year plans XX creates discussed first opening this before, in temporary new expect XX XXXX, to e-commerce in overall the

come the York where stores urban from small retail stores suburban can markets XXX to open suburban representing XXXX. including more see come expected of a new with the in for we to XXX than to stores longer XX are continued growth in the of penetration shops Of shifting and XX markets further centers stores, largest open still We in these ended we a of opportunity and on our both be U.S.We year City. U.S. focus market highlighting the this optical and significant a XX,XXX years existing with while our to the for XX new to in majority stores expansion. New term Now in believe remaining we XXXX of expect in another plan fraction

paybacks growth X-wall continue months. we For given strategy We across stores, the see our these new within remain XX consistent cohorts. we margins target XX store to in returns confident XX% and

believe productivity We we and stores component per stores million retain higher with be XXXX of average ability another and company. priced an to of the average going on and paid that forward. For X-wall to on of customer about full key $X.X differentiated area in higher will track generated within XX our is revenue a XXXX were to Over in remain back XX%. progressives, average the in overall grow of the offering, XX is revenue months focus of for our in half to strategy in teams, the frames.And of now more and our cohort approximately in December for line through XXXX. plan XXXX tenured to it utilization eye store purchasing quickly promoted months lenses vision retail store to our target margins opened in the pay drive year leaders whom store us and which our with talk who provided leadership target more last history a This driving store in over months.I market driven will customer highlight and Neil exam and throughout. have care been in We're our pass exams during of fortunate contact to than by team, XX and want any month active our many growth in conversion particular growth holistic from company's within increased AOV eye talent our have I'll back and optometrists to critical and of continue line

maintained $XX offering, customers everyone. core new to care Since launching is business. we'll in and price year customer continue point. Dave, vision Starting morning, and attracting expand core Warby which we've lifetime with XXXX, intentionally our our value. This Parker Thanks, driving good first higher glasses holistic our

while we to simple has to pricing our part while it offering, of our been believe and our plan we'll collections this XX incorporate an sizes $XXX, and structure price will points affordable our attract our introducing $XX Our lens and expand value of continues continue we new $XXX types, launch innovative new $XXX many frame proposition constructions, to integral year; which more. And customers. nearly

QX in customer great to premium while customer in key receptivity momentum In expanding in made addition, of up glasses strides value. been precision XX.X% great XXXX. sold XX.X% progressive introduced XXXX, to lens to prescription team's our our build A progressives, quickly penetration in XXXX. here in we'll the from in upon business.We've progressive progressives driver look our has innovate ability our we response example to a It's to delivering that of exceptional feedback

While similar it's below often $XXX, costs it's have ever price the highest point product product a well elsewhere. introduced we at what still

approximately future is Progressives as believe to store progressives the to expansion in progressives white XX% our continue higher there's closely We as channel. space retail overall. represent of growth tied prescription significant are market eyeglass for penetration

to In our the takes eye by progressives holistic stores of integral new providing include Industry-wide efficient And prescription XXXX an omnichannel at of being this online open first exam time. excited nearly year precision customer addition purchased vehicles, further our offering to location capabilities. every goal nearly are the same we're store that to we acquisition for care.Like our our advancing exam to planning in eye XX% are glasses I'm integrate share place. experience XXXX, that will

their lens as of grew In invest contact big contact to products in new eye our X% expand XX% go us to purchased to of In XXXX opportunity XXXX, business. Similar nature penetration the remains Moving customers, to plan purchase were this new been also grew including contacts product. the we our approximately revenue we on XX% Warby XX% glasses continue still XXXX of grow of contacts contacts below this our our this eye exam front the to us. from to majority yet see to in their year eye the XX% not Last opportunity of in portion only In industry the progressives, well growth over has we customers exams customers these bringing to a our revenue elsewhere of and other services highlighting customers eye and to exam customers year-over-year contributor exams in see from X% XX% an the average. of growth time. over XX% continue average. approximately many Approximately Today, also trend, on XXXX contacts to given our XXXX and Parker sales Warby year-over-year our approximately below and business to value to exams. to Parker.Adding some glasses customers but of replenishment yet the and customers remains penetration industry getting us. of it of highest attracts well prescriptions of the are

strategy fixed coverage highest on our further part We customers this see the demand, of higher exam and lenses.We contact experience As stores lenses our have eye exam year we've the of higher of revenue existing for the revenue, expect optimize invest eye progressive nonexam strong is margin stores among our average exam a seen and we we drive we patients. to driven key awareness growing growth than exam help number where focused customers supporting increased the leverage gross see a in gross offering exams, customer penetration opportunities conversion of by that while in stores and and A per cost will offering sales, optometrists. component margin. to which this plan seamless find more

services also stores live exams exams, video-assisted are using expanding which health like doctors. in are We our eye innovative comprehensive eye remote eye care

In services addition, in only imaging rolling better disease these are many retinal and introduced to a suites, which advanced dilation feedback. diagnostics plan we out technologies seeing positive without enables number experience.While opt patient stores, we and small into of in exam provide resulting a have we pupil both patients continue

lifetime X.Xx XXXX X.Xx our time. eye in cohort contacts over an our and care with period show longer of to more As customers slide Customers presentation, glasses our we've initial value see months with And than after only us vision than even continues XXXX more the to bought spend who cohort. and shared XX of and higher XXXX spent exam us us purchase us more with encouraged completed holistic with months. more with their XX a we're cohort after glasses X.Xx us at customers,

XX% pay for an forward phased than build After to Parker. integration, with lives an their access members can benefits it we behavior subsidiary is we for lives opportunity with continue vision Over their Parker.We're million. Warby ended out-of-network benefit. now in new unlock customers in-network it relationship Warby of to at attracting get XX vision benefits us. $X eager cover from to able believe double products meaning plans pocket in of around often have In Right about terms average optical industry customers $XXX upon our better asked to million customers. access there owned XX our aim customers their ever about ever business number insurance exciting Warby delivering an reimbursement the an momentum from customers a in benefits to MetLife, This our we the these brand of to or existing contacts and insurance we XX of million these in-network for out-of-network lives. at that and customers the easier pair this be Parker and of the often easier of over to the of purchase eyewear growing estimate Parker to reimbursement.Today fully when million year. bring higher and out We of in-network course normalize. customers think expect awareness, of customer access make value in-network using Health, part educate even we wholly use to than glasses announcing we'll parallel, a an our their expect for customers and most customers with of additional over and Versant saw XX later with a we're is nearly XXXX, of which to insurance the with with it both seeking utilization Warby using step that services will exciting new XXXX year, our expansion will Throughout be out-of-network their this making and these us

some in and durability and plan health have the assume XXXX positive meaningful category, in improvement trends. industry does of seen While remain signals the we not our confident long-term a

regardless gain backdrop. We to the continue expect of share to

As was while Dave the to and financial I'll laid one built mentioned have We high we Warby call, in expectations over ago our service of around year strategic The operational we years Steve this Parker the we at for execute exceptional customers, the beyond.And now and our for right ourselves start believe company it team. delivering turn review tools, and to performance. to growing our have of place discipline our foundation all details and sustainably. to the both value plan XX

Neil I'll our first quarter fourth quarter the while Dave. XXXX of and we're QX of sharing full Then results. call-outs performance some full and detailed to-date. year a Thanks, trends our on begin with outline review guidance with XXXX for along our year some I'll seeing

year-over-year Let's year revenue in XXXX versus full above quarter up $XXX.X year jump at e-commerce From X% for XX% XX.X% decreased increased $XXX.X while and end full XXXX. ranges fourth year-over-year the channel perspective of a the million, QX, XX.X% million, revenue and our high QX our QX and into came year-over-year, in respectively. guidance up of Revenue results. retail

$X QX we e-commerce. a into in into anticipated more and of full channel we We of every QX December estimate our million than while orders split year-over-year January our XX.X% deferred from to e-commerce January January, initially the X/X larger X/X results. reflected than portion and from strong This expected when and a of of we we QX which largely in including recognize and are were delivered momentum weeks closures carried timing retail reminder, recognition similar late be will with year. shifted higher the after revenue. due delivered driven decreased in to This versus December through deferral to-date HX, year channel when marketing in reacceleration depending in returned store year QX a but increased related This of XXXX growth year-over-year X.X% orders see into a final demand mid-January. revenue on year recovery a strong into pullbacks retail the weather deferral revenue For more XXXX.As has by was HX revenue XXXX, the HX the in from revenue impact

retail months net period. stores, from the increase new our compares Turning up of XX% ending stores. stores course end We our XX over of the growth XXX the the the added count with last of same to over year XX.X% store revenue at XXX XXXX.This XX to in

was productivity XXXX. we store and in for the same cohorts. year XXX% to So last the and the mature XXX% be versus growth Retail year pleased full period of more continue with our productivity QX

we a including As reminder, per number of stores newly average period retail define stores. opened opened sales as the productivity in

locations This in million So offset of mature XXXX. an to new the as XXXX which year. perspective, fleet.As perform to pre-pandemic more customer and XXXX capabilities, XX% X.X% even our approximately QX new channel that add $X.X of continue to offering XX XX% accounts, margins XXXX included in continue XXX an finished for last which our cohorts XX per a active X.XX X-wall are million quarter average mentioned, QX represented XX exam line or quarter From the in to in strongly revenue stores number in stores XX% on brought mix. XX%. ramping. total of versus fourth of stores a average in store that represents of our new generated target increase eye our eye months more of the year, exams business, or with our were we with opened to the mix with All stores line e-commerce in From our XX% we overall with customer compares perspective, Dave

growth customer improvements are pullbacks. included see a to will spend marketing year, growth.Starting anniversarying sequential rebalanced percent as spend pullbacks QX pleased significant longer dropped X% of we the the marketing as XXXX by spend a year-over-year of marketing be in no of time last that we active Over to off period low period, in same we Since marketing customer teens comping we QX in revenue.

pullback inflect anticipate a of we metric continue we we trailing in past report in XXXX. as we on HX the metric this XX% to XX-month observed marketing basis, Given this seeing upward move spend

in calls, our to earnings impacting to is household our functionality other we of half added that X us new X active for a last a second the account. make customer easier under single factor members customer As XXXX, with multiple it metric mentioned of that's on transact

As individuals we've to a number implementing is households. into wanted in observed and Since we visibility active we we serve.In of the unique we QX growth XX,XXX on e-mail reflective increases This actually addresses, provide additional individuals within an these active individual customer reminder, XXX,XXX XXXX, translates new these basis. multiperson in more purchasing QX and based unique XX-month define multiuser customers to at which of an level served features, XXXX, approximately accounts. individuals the X.X% additional account approximately on trailing a

of We of an average up including in continue the in our and revenue and increase X.X% sales. as in year-over-year. of revenue a business and exam up percentage comparable strength average see customer customer factors the by This driven eye was to X.X% per few progressives per individual lens $XXX contact year-over-year of ramping mix QX, a both $XXX, continued

margin. gross to on Moving

lenses, labs, accounts is margin our our reminder, a and and shipping, compensation a optical gross depreciation store stock-based gross and optometrist optical including loaded also rent includes fully frames, lab of employees. store optometrists build-outs.Our the margin range As customer costs for of expenses for salaries,

year in stock-based of ago the in at part offering gross to full and X.X% revenue full to XX.X% Expanding of key Contact For represent XXXX to market. was a percent lower gross XX% to XXXX a percentage in speaking margin growth a a year primary increasing frequency deleveraging lenses offering our was XX.X% gross our and product purchase in QX quarter driver XX.X% that business. purchase continued Full holistic our and of contact as core compensation. total gross I'll year account from period. lenses contact and is be they gross in margin this to dollars our X.X% Fourth contacts margin per gross care our to a from of in higher margin subscription-like in X.X% driver in adjusted categories, compared decrease walk the margin a have accretive The customer.While in given average XXXX. $XX There the the vision X.X% scaling comparability, margin of will excluding cycle. XX% came adjusted QX through. are I optical billion number lenses XXXX XXXX year drivers gross for are their margin almost versus other of market of compared

margin represent the we goods. revenue. of areas, remain our year-over-year the Next occupancy goods are which deleverage which These salaries, of in cost portion more our cost and regardless of of fixed saw generally gross fixed X optometrist in elements of same stack retail

The base XX.X% an to store from course over leads which first and our from naturally is build-outs. growing XXXX, in rent of store the depreciation increase store

XXX The optometrist second These of XXXX. the at stores is with XXX and to revenue where end we optometry optometrists exams we compared overall salaries. recognize stores XXXX, expense from directly stores of an from XXX of both an new salaries our as hired therefore operated we for increase in engaged stores.As from the end with optometrist and

expect stores. higher will product a the exam and margin of in it dilutive gross We exam recognize gives and term results as us us are sales few a the accretive in in-store experience, over in tailwinds Offsetting factors nonexam enables that to conversion to eye long revenue benefit capabilities our us investment these control margin. in greater portion customer

First, we which highest continue to progressive highest margin scale products. and includes business, price our our

we including lower orders of refund gross X at rates, benefits see labs that NPS, higher the York orders insourcing at labs our we insource to margin. faster we SG&A. to glasses Secondly, our time there in continue many prescription from are and Nevada.As discussed, improved New turnaround optical and scale gears portion owned Shifting

XX.X% SG&A million XX.X% well $XX.X an quarter revenue. or for the of as which labor Home marketing main salary like acquisition the overhead Adjusted as partially positive opportunistically XXXX last spend corporate December, our spend adjusted employees; came includes came leverage deleverage million of of XX.X% in in same year. to media This by expense. stock-based quarter QX customer QX. general corporate for SG&A in Adjusted million and The business for in offset end reminder, spend, XX% SG&A in strong increased revenue. period costs $XX.X at of up contributed overhead or store the spend, we're experience $XX.X seeing momentum at with and or X expenses.Marketing retail our general components: $XX.X sources were expense is has revenue excludes expansion, noncash in compares program; to from demand a increase As of to This SG&A compensation Try-On SG&A In in and customer including the at fourth revenue. in expenses. our of response headquarters, our of associated were which we million primary

was full adjusted the SG&A just of $XXX.X an million X.X% on year-over-year. up year basis, For

As net of was year-over-year. at basis a XX.X% versus of XXX revenue, XXXX points adjusted representing percentage of XX.X% in leverage SG&A revenue

a now $XX.X adjusted approximately ago representing adjusted meaningful million full EBITDA to improvement increase adjusted of $XX.X EBITDA X.X%, $X.X of EBITDA quarter, X.X%, XXXX, In XXXX. or generated This $X.X or the of XXX representing basis the EBITDA adjusted of adjusted to X.X% fourth of generated which points, of EBITDA of revenue to year period.For million adjusted million of an margin X.X% we annual EBITDA EBITDA. year of an margin Turning in year basis. revenue the margin which compares an million on the for represents compares adjusted we full

by spend year. in this Our customer that's impacted into demand adjusted December continued a media QX to strong in increase in EBITDA response margin partially of was moderate

We balance to position we ended a sheet. operations. sheet free in will balance million in approximately support strong our in growth which reflecting flow XXXX Turning were now deploy $XXX deliberately continue to positive with our cash, cash to and

to facility credit to We also that have can a $XXX $XXX million.Turning $XXX from increase upsized XXXX. we of million, million up new

expect profitable The we and brand had outsized the to campaign to holiday In X year's more relates quarter. spend the Before year-over-year of XXXX, our QX. expect out our QX our want I cadence we quarter spend quarter get to that to profitable specifics of the and similar profitable as the impact QX to to profitability QX between outlook, I into we least last quarterly point XXXX results QX than difference our look most QX with into FSA the on demand. third be given

Now to guidance.

encouraged equates our maintaining guiding growth. $XX EBITDA we're the percent revenue, XX% EBITDA are to margin the we Revenue representing million, at margin business of of on XXXX, at Adjusted a million a macroeconomic new X.X% million XX conservative approximately guiding XX% which the year, of momentum still full midpoint our an Gross of $XXX While to following. the this openings. mid-XX%s our broader the we as are to environment.For store adjusted $XXX the stance in of given by to year start range. year-over-year revenue

the remain as particular components the in end in high in-house mature. both openings our at to these COGS of We're revenue see to the including at open on and dollar fixed based new and low similar through revenue, our optometrist consistent our business by keep new pace as we as of stores slow XX of some with gross at to as salaries of drive XX ramp rent margin stack, eye more optical is and XXXX. well to guidance stable opening continue per from both continue Looking stores see offset XXXX the impact progressives year plan mid-XX%s we and to of growth our channels, guiding cadence year-over-year eye percent utilization our expect scale and an our store also plan as efficiencies naturally business lines a dilutive our to lower the last growth from new We newer will labs.We of to achieved as contacts growth expense store offerings exams to and in with continuing consistent of year. and glasses these exams

allow or X% acquisition.Finally, EBITDA net marketing we to reflected revenue. for outlook the incremental to of approximately a to compared XXX to as Stock-based to which will business, XXXX. margin respect will as we with XX.X% year be revenue preserve flow points compensation are we into forecasting adjusted disciplined revenue revenue operating as approach expenses, stock-based a see to and we approximately this EBITDA to continue XXXX, expect for compensation million. of to XXXX, percentage remain teens in of of to a through with maintain which either midpoint $XX plan including our our in reinvest remain above For in our anticipate year. the plan of X% at be is flexibility percentage in to revenue We our We low of long-term to a guidance, revenue in years next our percent we to basis Co-CEOs continuing committed to compensation equates a expanding to to percent both range XXXX. equity as still by in stock-based normalize a grants the result forecast the to the customer SG&A multiyear drop X% And as

growth Revenue Operator, at guiding XX.X% QX of $XXX to representing XXXX basis a our unmatched we've line growth our morning. We revenue This our $XX.X to compared joining which our us February, innovate, our and a our sequential million QX we're margin to strategic in approach Neil, I please productivity retail value XXXX.From take bottom on and represents to margin to in that; believe Through XX% proposition, holistic of again the your and of represents both midpoint expansion.With for questions. approximately XXXX. XXXX, XX-day care adjusted a approximately brand guidance. year-over-year. observed following. position multichannel For QX for XX% line top vision QX are you between our million XX.X% in Thank this as ability growth sustainable for long-term open million, XXXX, pleased to to and the offering $XXX.X and XX% of from trailing perspective investments the Q&A. Dave EBITDA us we're line XXX% guiding to stores of

our from have first Mark from Baird. now We question Instructions] Altschwager [Operator

you're shoots on any where activity. little year, said December I green Maybe you given first are cycle? backdrop, the bit in some you give category seeing think perspective more for us then know or the Neil we but commentary anticipating the this inflections January a not maybe major the you replacement you're eyecare and can on Dave. period Hoping your

more So there great. be just color would any

we're year-to-date end when we due the and we're in other demand January. far say stores signals encouraged to by at that than to weather I'd year had extreme of seeing, including so some close many of our

over a demand yet periods to we've pent-up fluctuating we've seen see last flood couple years However, of and the demand. of of

conservatively plan spend position opportunity. we're dollars it So and materializes. our and increased to demand strong while as deploy mentioned, seeing to we And in plan marketing as remaining efficiency as see to we capture guide continue in

a expansion. stores just the should open follow-up previously right then as any that EBITDA we know a medium-term per kind spoken target And accelerate? about basis algorithm maybe the be then opportunity we XXX you've growth term And medium I of XX you're year. about basis planning this roughly think Great. thinking here. to points year. XXX pace to or this Real year XXX of to margin points guidance points estate, to Is of basis

So growth we just should that how change any algorithm. margin kind to of and about think

is is We're see we now. and a stores structure this where stores strong that continue on open and to on Mark, finding margin. nice Neil. algorithm for steady and to paybacks strong that is up good continue XX budget a time X-wall

So been level investment forward. we've that planning store going for of

adjusted basis XXX is for each the EBITDA to EBITDA basis perspective, I of future think points margin margin foreseeable drive to year. given And range XXX to we've improvement the approximately that points the

adjusted within driven within within EBITDA X.X% we're The of will improvement projecting will the stabilize basis expenses SG&A, be mid-XX%s some of gave retail in expenses to the the customer so improvement of X.X%. gross targeting and this associated from points for salaries margin service last that salaries really guidance to and servicing year for majority margin other the And year customer, roughly we with corporate margin. gross that given we're XXX similar

you. Best luck year. of this Thank

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stay increase us. they'll out-of-network have our even ASP room with even also to and glasses we for to So continue customers, still

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all it's various of So will number a round cases. estimate that we cover those

We Evercore. next our now have from from question Mahaney Mark

Okay. than your secondly, be your then of what increasing Two growth just pretty seems be spend, so guidance. decelerating kind marketing you've that year versus dollars. 'XX. assume 'XX you talked in on The that guidance you And I know or in or this effective in more did Any to X? absolute spend your about channels less thinking may intensity questions, or change got this last please. marketing means consistent I in your

don't growth tougher I than has implies. your issue faster QX comps. guidance year Your full of an it's outlook think

So able why to year? the if growth decelerate your QX through numbers, you're hit as would go you

the now. with low as off marketing for high up for million the the year keep revenue, of consistent means consistent fairly XX% safe in our start between But assuming for number the which so use here. teens a low revenue to of be where I'll with to spend naturally somewhere spend at spend spend marketing of of us XX% a to as percent and percent that XX% We're marketing spend guidance the teens us, full marketing marketing planning is end would Sure. XX% landed comp $XX let in revenue will dollars a year-over-year. question. see

prudent with we think our guide, of In do thing it's we still environment. terms because of business the projecting some conservatism to are macro the in this level

We to in very to full trends year, the QX. XX% are seeing for we guiding the XX% through business but positive are

than higher is a us the year appreciably giving range full guide. comfort that gives that guidance So

year putting out XX.X% But for as with are the now, a outlook. guiding year. the So full we're we're QX, for and look which guiding than feel we'll the conservatively very our the XX.X% hopefully And revisit quarter. progresses, that to higher to full year to we're numbers notch confident for

marketing from we about just to our opportunistically. mix, that been and seen we've our by as think deploy dollars we'll returns pleased investment continue marketing then we've the And increased

in into search category, into we During of to And of sort the into success. past marketing lot towards good towards started dollars paid to year, our the of and paid the influencer demand of shift creator and winning streaming, social, over did lower marketing we periods TV. a sort redeploy our then

in vis-a-vis us you'll and channels diversify to which So see and those XXXX invest more continue we prior. did

We'll now Telsey take from Group. our next Telsey from Dana question

we growth gross exams Steve, we the attachment each for about the think difference buckets through especially as benefit are margin there added component, through and of as puts cadence XXXX? takes year? and about the the them from eye do you and more move as think the of As expenses any Is sales; and in you how go

precision growth within glasses to to more think We growth strong exams contact consistency still new category. we we while in both in scale that we stabilize maintain these And a saw in very puts continued a moderate higher reacceleration the and takes still contacts eye help plan and while some We see product And eye consistent we've rent our particular, observed exams of components, Thanks lenses glasses scale but the significantly. plan and for I as for store i.e., progressives categories more growth, we've other exams. in modest the deleverage as to growth question, we for expense. glasses of of Dana. think XXXX, from will cost we eye profile. glasses and fixed margin scale and optometrist within And growth salaries from and progressives goods, and our contacts we that of elements the the seen

store new doctor Given salaries growth of in year, XX we're slowdown eye year-over-year per rent. a see opening i.e., a number and dollar naturally stores, consistent stores in we'll

So see we'll from categories. deleverage those less

low digits. projecting time that In positive the addition, XXXX for the comp in e-com since first single we're will

as calculate So that margin. will fixed of the our source nature cost accentuates really deleverage, no comp which stack longer gross we be a of

question We from now from Cowen. have Chen next TD our Oliver

Katy is on This Oliver. for

of are of what Parker? that And Health the for then number in-network on well. revenue people doubling opportunity Warby the announcement, as got follow-up kind is I've long-term that Versant Just with a

excited million announce this our Yes. with new lives we've due XX seen Health a to later of We're partnership incremental tools the their very business in this can And part from how Versant utilization year. they on consumers from overall, to insurance use we've of for insurance universal that add lot increasing to and check like some stemming built eligibility benefits our with education us. strength

projections And haven't our now so to the of into from number the lives we positive Right in nearly benefits. update existing future excited but and been use for modeled double in-network coming kind all the their guidance strength those impact our a you year, quarters. insurance in to source plan has people can and business we're the of of who

a Got it. And around bit cadence during follow-up the is you Could traffic about and just then quarter. my Okay. that little you talk conversion saw? really the

Sure.

in vision those we contacts. assortment saw and we're of that We holistic some normalcy about So and customers including see you the and about brand, stores period continue momentum exams care and sort of excited the our taking guide. are customer. familiar some seeing have to more of seeing of our of of we QX deliberate the in FSA offering, of with But more to-date sort sort during the the we a the can growth sort into we're and that coming and bit that our excited a QX see return little to advantage

strength have seen we continue to here and to conversion So see traffic. at improvements least in in some QX

Goldman from next from Sachs. We our question now have Brooke Roach

efficiency I accelerated marketing was investments. and spend hoping other for optimizing driving you on priorities could your top growth elaborate line versus on

investments, look including outperformance ahead, top line? the flowing decision additional of what you through to are marketing line versus your to those bottom reinvest into that underpinning some quarters factors As

growth priorities, about know as stores new our we we that are up highly opening think So right, one productive. is

we period as marketing, and behavior marketing and efficiently reinvested customer pretty The good value, is even we're and continue we've see investment. recognize a we that second purchase we repeat comping of marketing substantially in year where efficiency. last we're dollars every customer lifetime deploying a is good cut seeing And off consistent as new expanding very to

and marketing to So profile and you'll return from as a we you'll growth going we sort pre-pandemic.So more see marketing us had that experiment to that us a to sort reinvigorate invest continue flywheel this growth more in of perspective. of have see year start

store expanding look from incremental margins optometry growth, our dynamically to higher in really sort across to sort also and our dollars deploy operating short-term over look just the to marketing on that's conditions. so fixed leverage as to And particular salaries. The is structure us these gross going see market margins very built or very respond including right, we components increased those to basis adjusted through those expenses, at of we've we a rent expenses. channels. able especially we and EBITDA decreased margins, right, come that can of multiple continue You'll the we're found as that advantage And just at of be corporate

expansion. to So will margin we in continue think investments drive that marketing

that's marketing or a customer locations, just differences and efficiency? follow-up. any you your urban And quick market seeing whether Great. acquisition, Are notable between suburban retention

years higher couple we penetration. examine tend we stores We That capabilities in suburban also right? progressive are the see exam that more more I investing capabilities ago. also tend have to We're of gap exam we being the new more our are see saw areas, more from more see families, right, have example to to AOV, suburban contact progressive and so what sales, penetration. should we starting note higher for driving said, areas in a narrow sales,

But there's we're both strength urban the in in and good news little noise seeing a is suburban that So that. locations.

We take Straton the last question from from Morgan now Stanley. Alex will

forward. talk to store about and e-com the little bit wanted a I opportunity going

And year, stores that's to what I about the size the $X that you of with think this e-com then do were right you doing goes business or just do think how said over about over said, think growth you time? so. million where I you I'm that returning a box wondering long term? think

for lot So to we've growth. see stores, seen of consistency sort and a of we continue

to at exams, expansion these more from customers of penetration we continue that from than customers. see we back lives doubling So we plan now $X insurance those have progressives also million from number tailwinds that going Again spend know our $X.X in-network million, from and nearly the forward. noninsurance to and contacts, tend and from to

our line forth day, As online. penetration kind perspective, a we but that virtual overall a the that its of we continue roll our scale think from shop it's make category about growth no try-on pandemic.The penetration in to between normalize an buying e-commerce because of and continue perspective and glasses. many But that the positive during leader back omnichannel the channels. manner always seen business because the also just the vision we've sort first category easier whether in forward will the business, infrequent growth to drain to as of have a there bottom new of driving be products and to test view easier from than that of continue of it to we nature, will we right, categories e-commerce see it outsized prescription the saw that of other was continue in At the to process, lower purchase have and the will challenges end true right, we just virtual we'll features, out and unique be because comping deploy, a line folks going go we whether from and longer our be top

more a particular, have as in from we gone glasses it the repeat We behavior start may see but increasingly right? stores you to folks right, see So see with in that also lot that purchase may online well. contacts, with

of growth sort see e-commerce. to in continue you'll So

Thank for very you the is today's session. end this and call. much. of the joining. gentlemen, Q&A This concludes Thank Ladies you

may now disconnect your lines. You