Warby Parker (WRBY) 9 May 242024 Q1 Earnings call transcript

Hello, and welcome to today's Warby Parker First Quarter 2024 Conference Call. My name is Bailey, and I will be the moderator for today. [Operator Instructions]I'd now like to pass the conference over to Jaclyn Berkley, Head of Investor Relations. Please go ahead.

Thank you, and good morning, everyone.

we are alongside and President Steve Financial we today Co-Founders Gilboa, and me of Officer.Before Co-CEOs, couple and Miller, begin, with Neil Dave Blumenthal our Chief reminders. Here a have Senior Vice

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

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

and build channel continued Thank retail quarter, you, by Jacqueline, and business. our in The throughout the our to first momentum good business morning, everyone. driven strength in primarily glasses

adjusted XX.X%, XX.X% was last up with revenue of million net to year-over-year, QX adjusted QX We and gross revenue to are EBITDA in record-high pleased improvements in gross QX, up along delivered and year. have was quarterly $XXX from margin XX.X% margin.Our

adjusted representing margin. of EBITDA an delivered XX.X% million, also We $XX.X

optometrists, the reinvesting more in spite hiring Over the dynamics, in our our in new we innovation frame long challenging of continued and, contacts recently, for lens and couple store introducing the term, footprint, investing expanding scaling business, strategically of including business industry last marketing. years,

encouraged In and progressives. XX% glasses results glasses XX% approximately on financial growth of quality addition, our and growth and overall by primary I our precision and of as we and customers of QX was to sold in the cater metal and QX, profitability.Based drive polished and featuring vision compared and growth in will first these single our to driver a line, glasses prescription to many revenue detail new strength as We well lens we scaling were of to our fraction to that product frame our strength well involves and over and strategic overall time. elsewhere.Progressives is business. price which up gross that represent Terra of growth X our in there's will this acetate. guidance variety net A more colorways, bearing on and included often and Parker's growth majority believe $XX deliver QX, what strong key over raising both our start QX, single for as incremental are better but designs, efforts are in vision glasses against of collections single first a guidance, our fruit we performance, capsule the Warby launched with demonstrate investments streaming, glasses inflection the priorities, adjusted more cellulose results assortment Steve complex marketing customer positive execute our drivers strategic our Dave the adoption provide QX the and see business, progress growth, within EBITDA. a especially are review quarter channels rivets and our as contributor year full to and at a like results.I'll and in we evidence which like Our price where products to ranging to offer single of $XXX, ability product our team's incorporated and saw to core of of highest our to fleet margin e-commerce the a prescription signature similar innovative up approximately of progressives, and graduated to the the are continue visual glasses performance cost Underpinning glasses customer.More from overall vision our ongoing higher margin collection, particularly vision comfort glasses our of improvement XX% the the broadly, quarter, of growth.We which year-over-year expansion XXXX.In positive average of quarter. our attribute detailing product continue sizes.In drove investments, store we expansion exam of points, increase the X% over regularly innovation, core revenue constructions make our marketing, frames including as business, paid significant course for improvement in and grew our unique more priced our which alongside penetration continue This $XXX still types acquisition only introducing glasses, our social first materials glasses opportunity $XXX.

non-exam lens impact customer.Scaling will opt revenue higher approximately stores eye in a higher growth exam and utilization, offering direct place.As including eye customers eye stores, industry-wide stores the nicely have glasses eye by increased contributed We purchased per higher than anti-fatigue a to revenue, had responsive, and progressive exam of find to We our lenses. of on continue and continue of exam number priced we customer location have business, our that driven including exam seen lenses, an per light drive revenue takes and strong exams, business. have prescription to enhancements, XX% see which has average to same average in glasses frames penetration and we've contact are sales at exam the

operate in existing region City near was us, additional Atlanta, well opportunity near of in Vegas.To ahead and confidence store which invest our giving within further customer Mountain Salt XXX our base channel. in have of normalcy would a of increasing retail potential, the new While count the XX% added ending revenue expanding drive to the one e-commerce markets coupled in to XXXX, channel dynamic all consumer profitability contextualize approximately we growth QX acquisition and in areas before including longer in a XXX major XX% shops store were Miami to fraction we see still a amidst optical productive saw we've last retail QX, the to the within year, runway our Las second West only store. largely stores, We an further XX% growth which growth business, Lake in trends improvement of our of of still metropolitan yet stores store return term encouraging the U.S. southeast highly long year-over-year strength industry, we to Orlando, markets. us With as have in as added store X net environment.The reaching We and observed expansions suburban over year-over-year.Since in driver over of have particular, of compared our of in evidence in QX our in with in the and XX small count we've represent with optical a XX,XXX

a new our in from both top contact track saw and in to fixed-cost channel from call, last continued with returns to and growing as new lenses we've overall improve, of continue store of X% single-vision customers on well try-on year-over-year leverage. to e-commerce remain as purchasing composition stores Home QX, base glasses and is XXXX.In total feature. our on contributing online our growth a strength strong and increasingly add new as and We in improvement customers XX we stores to comfortable our e-commerce line We are returning channel the driving smaller our percent scaled virtual our shared directly support with of of Try-On the orders as our business.As our evolving, see

this growth ongoing by is inflection from channel which direct being purchases, headwind our positive Given Home from Difficulty], [Technical a glasses is in program. offset Try-On benefiting diminishing but an overall

talk is a growth.And e-commerce I'll that path our long-term believe to we toward it additional drivers. ahead, pass business Dave about Looking now over to on sustainable growth

spend core team goal told growth, the re-accelerate a year reason We're execution. and across glasses our last for both believe this is achieved customer has in and brand our that marketing concentrated pleased main team's good moments We you to off X marketing high-impact was dimensions. year are strong Neil. active this marketing we was in growth efficient our QX, our is of to Thanks, growth.In curating call start what that We while driving for categories. year-to-date, a proud

The long-term investments drive awareness. being and brand first affinity to

partners fashion-oriented eclipse co-branded also engagement Earlier glasses using the are creative within the stores of Thompson, reach with the year ever, Warby have awareness of store drive eclipse quarter, thousands and within that New founder, eclipse like consumer designing fashion aware with Delta great viewing of Overall, people is they're we Delta that like-minded stores York-based Parker investment pleased familiar more our of and believe the aboard of We activation our who Sky Designer opportunity solar on the North impact CFDA's across grow we not product with Year a traffic highest select believe to collaboration fastest distributing but is very with the retail and nearby. were of one were targeted, this Airlines, speak our to awareness communities.We their event their number shopped rising stars influential Theophilio. not to coveted safe acquisition launched We customer and April and with being next these is week goal hear one rare able their and there us reason excitement second The on our when This our accessible distributed next mentions, the and to in passengers to or awareness Emerging long to including brand continue Theophilio's for collections flights and won celebrate eclipse Edvin store the who excited eclipse press the audiences. need in around the over saw purchase term.We've goodwill and collaborations the strong footprint, drove created customers. the campaign, while enabled generated fashion Warby the in their near-term significant mind.We exam of be you perception. will of pair took the our glasses, many Clubs. were brand of limited investments free Parker top travelers to will glasses elevating expand custom, with a focused believe that edition first awareness experience eclipse this and by Xth. to the country award.We extend our work label transactions.Hopefully, of to in growing of also many the we in to celestial drive director and consumers American to solar to making

to continue seen and positive see additional strong and results.At media in same customer new portion channels spend media our stores mail direct and search, scaling returns. continue our where diversified invest model. We been and we of through acquisition we've influencer, to allocate streaming, linear TV where testing the also time, We to like a we've

As a continue these a to low-teens leaning strategies see while the percentage in in efforts, result us encouraging as and, disciplined sequential marketing our the growth, marketing revenue rest while year. it glasses stay revenue.You'll strong of into maintaining particular, see marketing growth of of to was the

but stores we rate consecutive initiatives marketing customer million a retention customer average the continue and basis, roughly remote to and lenses.Finally, Health, revenue revenue expect an by doctors, across know, third purchasing QX this see improving continue average repeat year the plan as the in in-network average.We continue including of per X.X sales with in-network approximately care revenue grew and which In the subsidiary of eye with prescriptions we million. throughout customers, to lifetime XX-month for average. double industry recent the in you exam eye of over remains XX QX, business X% grew an of nearly higher of given also X.X%. to our contact the year-over-year quarter a roughly the over to patterns most have remains of front Our of have trailing us customer, will of with as to highest this relationship Warby well little metrics exams positive grow wholly-owned to to active nature expanded seen propensity In and increase year.We also XX of and XX quarter effort revenue, replenishment customer customers, over customers of holistic scale fourth months earlier still and approximately product our the well a revenue, we've we XX strong eye per also highlighting of of revenue the we number XXX% growth, strong with bring of increased their vision of over new X.X% contact eye the XX% growth exam growth exams, strategy and precision of XX% over go retention their announced driven our get XX% into additional lives Parker, on our lives their to and revenue, to below us.As elsewhere some cohorts, progressives trend year-over-year in-person and with ended final below value. XX% uptake Warby stores drive not an And many cohort.The the MetLife, X% customer stores Parker to Versant XX% is active it offering purchase insurance while bring a lens with on and months I'll the our Today, million access grew driven dive customers, which majority only quarter, this glasses. opportunity value industry to approximately number which portion attracts including

customers leverage insurance month began as their parallel, easily of margins.And coverage maintain integration I'll forward continue seen momentum of out-of-network average stores upon for eager a earlier for often financial cover to and our forward.In build driving reimbursement Parker.Looking it universal an average plan balance integration this continue pair the moves these to turn of and $X next at Most to now, updating save phased to glasses throughout in-network and throughout review locate details the purchase out-of-pocket expanding we our Warby and growth ahead, the quarters. or Our look customers eyewear that EBITDA contacts, and to eligibility We will meaning their in plans couple you Steve check benefits. we're of performance. $XXX business to healthy over the between out-of-network online help a to adjusted tool the we've

stores, compared XX% at months, stores more retail our XXX compares a stores over first net of year-over-year. from of stores the came versus retail e-commerce added XXX in increased XX XXX% and year. XX.X% the end of for XXXX.Turning to $XXX at Neil quarter QX a Dave. in retail quarter including Revenue This channel the increase than last as growth of Thanks, year-over-year, same both a on XX stores retail the revenue performance open basis, while ending XX.X% XX stores, revenue QX than at over From million, the blended perspective, XXXX. up store X.X% period.Looking new our course the and productivity QX revenue to XX% we months, with increased new was the last to period up count same greater

the approximately deliver we period. open number cohort strong and paybacks. last to change open period, retail a average whole of XX% year-over-year in covers XX as back XX stores cohort months.Our average open track paid This retail of continue of define our stores line As all in in performing months, in store is in per economics, with target for the sales stores four-wall now in our the XX on have the unit the new and X/X an reminder, new even margins productivity XXXX of a stores metric for the as XX-month months.

perspective, From From more and the customers, stores. the revenue total our business. XXX QX more year, compares retail past fleet increase target was the with XX% in to XX% average exam exams of a line open mix with XX an started the trailing we marketing Starting seeing for locations, nearly growth. our represented performance households been of pleased in active EBITDA or active this year, throughout QX, bringing eye metric year-over-year. XXXX. of to and store with pullbacks, we've in which we've increase first four-wall no of net priced new believe also XX% continued customer of of exam both channel and our margins.Over factors, we QX a reflective periods continue customer stores This than X.XX of represent perspective, to stores an few pullbacks million was we lens active overall course a million XX-month marketing longer capture ramping a in finished of XXX, This progressives, adjusted added significant XX including of per XX% For is months, so sequential to we quarter, see revenue contact $X.X anniversarying eye the on last eye spend in lenses, XX-month X.X% spend was year-over-year upward strength basis.As inflect customer improvements to trailing QX had in including QX, X.X% continue our sales. in see driven year.We average up will metric $XXX higher by per in and anticipate that our

we to noted, an revenue individual and we an person reflects one household per X.XX previously behalf others. of individuals, in gross is our a on we accounts, which As individual on basis places in XX-month margin. served which average up have on the trailing look basis, And X.X% up at order customers X.X%.Moving million on if multi-user

costs, As and build optical for store store accounts lenses, fully depreciation our a labs, frames, gross a of salaries, margin customer reminder, of range rents is optometrist outs. and including loaded shipping, the

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

year-over-year and leverage in owned year laboratories, the to glasses gross will in margin, a stock-based gross compared primarily in in saw I came portion increase adjusted efficiencies we've retail quarter to outbound comparability, margin goods, faster of and margin is highest including lower which was as customer the growth modest speaking our of driven XX.X% our of cost revenue.As ago be our by percent business, period. excluding margin in within compensation.First and to gross more expected, we which fixed For shipping optometrist category, exams QX gross gross continued higher of costs offering product profiles in optical margin stability base. The as Partially XX.X% occupancy but contact eye scale number our were in gross at and stores strength our the exams, offsetting grew lower salaries of eye dollars, as XX% store driver have care which to core over long margin and lenses leverage a per eyeglasses, than continued growing profit vision is our holistic scaling in term, part offering gross medium and the a up offering contacts are QX.Expanding revenue were our average of accretive key customer.

contact expect higher gross offset confidence and contacts and QX, All to margin gears exam this as our pleased we margin have addition, we purchase and our to with we're In have deliver glasses of in year purchase frequency growth effects eye to all, continue gross ability cycle. lenses a subscription-like in SG&A. in the dilutive mid-XXs growth.Shifting consistently to

SG&A or to compensation SG&A of well first quarter the of As expense program, ERP Try-On our including as which anticipate in spend, XX.X%, million, customer salary increasing excludes marketing business deleverage includes costs SG&A XX.X% our SG&A marketing at in moderate non-marketing and spend QX store The to XX.X% This general Home retail while components, salaries revenue. year. a X a headquarters, for XX%.In and increases our adjusted employees, Adjusted $XX.X of saw non-cash SG&A main compares the new at experience the flat percent percent XX.X% base, or for retail in overhead $XXX.X investments from reminder, as and our addition, expenses. in expanded rest of corporate like as the remained QX million, of as begin also we source revenue. stock-based was natural in primary XXXX expense.Adjusted of revenue our as revenue integrating to system, fully a will in approximately we quarter of came we

spend with the expect for Marketing low-teens as the of at spend this year million, keep sheet. of period.Turning EBITDA of came XX.X% balance we reminder, adjusted in which million $XX.X which flow to EBITDA deliberately to will revenue million, balance cash a revenue. of consecutive in in a position continue a to percent our growth adjusted quarter XX.X%, marketing we or XX.X% XX.X% As and now first we the were approximately an million quarter, of We $XX.X $XXX fourth sheet to the to from $XX.X adjusted deploy is compares in In in now $XX.X of last EBITDA or free year.Turning This up EBITDA. positive strong same the revenue the support operations. ended of quarter and representing adjusted generated cash, to and our revenue. million, year-ago reflecting margin period for

undrawn million.Now million have We an to $XXX outlook. increase we that credit $XXX can facility our of also to

maintaining macroeconomic year-to-date, on a We momentum are still broader stance conservative the business encouraged by our we but guiding environment. given are our

last an our ramp, of marketing EBITDA range, by performance revenue, of and leverage as our spend the driven $XXX margin as revenue, expense over consistent million, of equals XX the our in openings.We midpoint full of Stability revising mid-XXs XXXX QX, we're higher as to adjusted anticipate be at SG&A consistent $XXX we revenue remainder to growth. as percent of XX.X% margin $XX adjusted of year within year in and following.Revenue margin leverage corporate new stores see we gross and to year EBITDA overhead. year-over-year our million as will guidance which Given expansion X.X%. the EBITDA the percent more XX.X% approximately store Adjusted new a representing of a the with

of salaries to in as the some stock-based to multi-year XXXX. of scale anticipate XXXX As as metrics in COGS We expect guiding $XXX as forecast last a the revenue will QX.We a to QX stock-based year-over-year. in glasses XX.X% guidance. margin more of impact this last following. growth in in more anticipate share optical achieved equity compensation exams year.As normalize than to productivity store forward. continue inter-quarter and to with we're to QX our to optometrist X% for also of business our of XX.X% above forecasting compensation X% both represents we next approximately grants mid-XXs the growth year's to labs.We a be more closer which from components of net we've well between consistency $XXX still approximately stack, and our result growth across Revenue eye from to is both We're still contacts business, million, net our offset line be We a plan and Stock-based and to period in our brand the anticipate retail to periods the our through offerings in million in-house range gross Quarter-to-date, with revenue full percentage compensation plan drive fixed reminder, same of because long-term of these our we've the year.For observed our including XXX% efficiencies we versus rents. QX campaign compared year XXXX. as continuing dilutive going to do profitable year-over-year to see by seen lower XX.X% co-CEOs of X% XXXX, stores the not channels, year,

outlook Dave, With and midpoint please at Operator, this X.X% again us are Neil, of the for approximately to you questions. to take $XX a our e-commerce joining of Q&A. EBITDA your relevant QX representing that, productivity adjusted morning. a XXXX, I open perspective the reflects pleased in line quarterly the Our and guidance range.Thank we're guiding million, retail period. bottom-line in of From margin our for for

TD comes the Oliver line from of first Our Chen Cowen. from today Instructions] question [Operator

of target ingredients, generally call customer terms do then bifurcated on your we're also traffic, in growth lot momentum but out longer seeing, active thoughts on versus great margin versus rough more quite of what gave you if active and rate think your with there most and a about trends you consumer, customer that are very not how consumer longer-term as of Steve, may lastly, term you're in points? What terms see And and the What on you're happening fixed is call The seeing you And considered variable. growth thinking your health comments, is variable fixed terms term, expansion? in of the love you that about And you growth? the and impressive attractive. what mixes? customer longer interplay being macro, of are consistency.Would or excited a traffic of you price the may still

we there, and is particularly about see sort On This in-period active improvement as customer a seeing we've for of that while, we Neil. growth, been to continue think the metric.

a reminder, a XX-month publicly saw still That year. demand is where As marketing in slowing what periods during we we share includes when pulled significantly last periods metric. back we trailing

to anticipate will that and more continuing channels our we diverse acquisitions growth So active customer continue more increase.We're also are success. across towards to customer deploy capital finding

we'd ensure with invest we're that to getting continue We returns the that discipline like. to

continue rate. We see really value, retention lifetime sales to in to strong customer see as you our slides related

we best over, we're still what of we retail macro, the rebounded month, about have we to country we your about deployment sort being this question have let's right, of the at we're what next across to still sort seeing to the expected point. seeing and traffic with what tend marketing So the say to but consistency, of control respect month pretty more said, are resources.That sort be of in would hasn't centers excited

here Warby, sort of share customers that's mantra on think we marketing, we're of of going if managing And acquire macro, going to we our and expanding sort to business, continue can about what it gain and So the focused broader returned which not control, at market the stay to grow, as can a of sort optical is base while irrespective continue still the normalcy.But to category, has we're profitability. we expense to sustainably. so grow

of reminder, our take it that so QX.In is a product EBITDA QX adjusted stick and approximately acceleration number terms full up in driving fixed basis as to terms new in the that adjusted margin that XX% of glasses full in XXX is particular, our margin now. dollars. excited gross growth. year are Glasses, year we and in progressives excited add margin, margin, increasing we that category, based in variable, and is most given to progressive is that's lens saw number on precision we've what for year-over-year, particular and the one, so to We're The relates to color continue our to in profit our and EBITDA saw to strong about points highest excited an margin, variable, as gross performance a good drive gross of will costs versus strong margin with and really we're particularly

the around we continued intensity. marketing expect We as store spend.We also new also utilization we to low-teens newer be plan eye stores. exam That's at eye exam productivity efficiencies of ramp as labor we XX% revenue higher achieve our and to at see marketing maintain of and deploy as plan as marketing a revenue improvement margin to in percent and we disciplined

locations to expenses, the to a us continue lastly, just to very As and the approximately exam maintaining of a we've exam leverage time with and reminder, XX as corporate base. time. our expense to selectively ramp.And some also source see be it is takes added for leveraging able to year. adding We're we'll corporate for customer, discipline that serve eye critical over but over past eye It's offerings

Telsey today Dana from comes of question Our Group. from next line Telsey the

to results. progress on the see Nice the

looking moving the the seeing from are are terms of that seeing opening then what new longer in-store?And productivity With obviously how in store higher the anything newness be prices higher versus you're this it you lastly, in store markets has of the on some you'll new online margin. higher penetration, penetration, you're metrics changed Steve, seems also, like of customer giving openings? the it mentioned. the you no that drivers product, you existing those base, being and glasses you profile and and versus on of customers is The on year, mentioned On where guidance glasses

over Steve years few we're a have as adoption points, delivering of In generating And from progressives, and strong terms and of new precision collections higher to we're business, to continue our really our to customers are while Warby as of products innovative and on to we stores and products been for our variety conveniently front, price that Parker mentioned, from We deliver of with new great from, our resonating. starting marketing base primary engaging and are revenue our at grow are XX% from accessible strong the glasses, Neil to $XXX that -- acquisition was price some results our execution year-over-year, the making over from to parts open base, to all stores. customers mentioning, designing saw the execution to and messages our of strong newer XX%. continue last great it multiple customers investments customer customer are of marketing where life our that stores terms comes way the ranging and including our seeing $XXX.In we our experiences from $XXX, beautiful see for and increased team store located seeing bringing to are products, collections, are retail that our

continue performance to of out even as those customers so retail And customers really majority new and our ramping, of come strong majority seeing stores. are and the of see from many those of are stores new

$X.X having very markets, back XXXX, our existing we and in in of with we're that, across in the we or about. our in question markets both markets about reminder, in within X to cohort. those very we're it's new opened store the a existing And XXXX. X stores Dana, new whether stores and XX seeing of markets, performance market. new that new existing greenfield in productivity markets markets.We markets. paid we productivity And achieving we're expanding seeing as revenue XX% curve already market that talked markets We're as XX from versus in dimensions pleased our a up XXXX, for in new And seeing the path the those consistent we're seeing talked majority about we than opened numbers up margins across a our new terms just lot a average XX-month reminder, per paybacks, earlier it stores within And and sooner talked opened new consistency XXXX million, whether XX also an of existing we're months, to within In X-wall as the markets. your a productivity, relates usually of of stores

comes question today next Baird. Altschwager from Our line of the from Mark

moderation To Mark. on that Teske February. you you where trends which in were some for the tracking This quarter, from is start, implies productivity the Amy noted XXX% end at were of

drove And could buzz. the hoping of trends was quarter? those seems investments. Eclipse I you So on of through some could comment speak marketing glasses lot the recent to if like you a then campaign second, from learnings really your It

direct new any wondering correlation to acquisition you're if yet. customer seeing So

February, period was of had easier When question, number that the and we a Store course over weather productivity see typically quarter. talked against that bad XXX%. for And some large comps. was we we where about in number were it to reason we closer fluctuate that the because comping the

We some in QX, course fluctuation in number some also given bad early which that of normalized. over had weather the January,

is performance on year. intra-quarter And in of as versus previous of indicator the that number line more given XXX% fleet that calls. last view this the with visibility a the we year So we've store positive our

see the tradition activation the drive were On into week It QX traffic from actually sort viewers. the some then comes And customers. hundreds our sales, did front, solar we thousands of some within to this traffic retail lot We things Warby do and of marketing eclipse highest of a distributing at and and QX. fun eclipse a drove these engage to community our of ever. really

replaced big in North in black American was we those eclipse to the store basically seats, back traveled party took path where Nashville. Parker trip a with in included a That it and And country. totality. So our shelving, and we the mobile across those XXXX the purchased took in school that first in had of solar an had great and April yellow on learnings we class the out front past, applied Xth.Also we the Warby store the old oak bus, celebrated of eclipse

is initiatives these sort next and of share of course of costs confidence some customer finding our as to that acquisition able approach streaming, sort channels We've ability us examples engage linear year leading year us marketing brand see continue and the to of to with also mail, across this growth. of that social, over And been stable in the we influencer. marketing our you'll to So now normalized. and give that continue creator diversified direct to paid as diversify drive the we're spend has

next comes today The from from question the line Mahaney of Mark Evercore.

channels. to ask insurance wanted about I

can coverage? customers up those you date channels, just more getting us where access terms of on So are to in you being more through able bring to

Yes.

million MetLife that and place trends.And relationships also able by to not business, along in-network benefits haven't We benefits time over progress in their that employees expect those continue in to we lives Parker. investments existing scale strong kind see partnership that with utilization the months. grows XX.X understand as our been announced we and that be And country, and of from other eye partnership progress of the make trends in vast awareness make insurance Warby included given and use with from those find the to are with guidance, contribution can into insurance we've incremental the utilization launched we Warby pilot that Parker should are We majority the last to of lives increasing natural this small believe their see they integrated to continue to be earlier there us the but welcome making in-network note yet. attractive and, are just are integrated of to end in the this insurance those excited continuing good will lots carriers The use to make across later quarter continue lives our is we there particular, excited to will to We particular, Versant such coming continuing relationships that a lots year.I doctors, year. our positive very new to with Versant And then this open that of MetLife, members stores that partner front. track. hire we the on on integration a the month,

next today Janine BTIG. the of The from from comes Stichter question line

A question about ask to for wanted guidance the the Steve. gross mid-XXs. I in margin

see update learnings which from we in-store on Just the offering the glasses the continue if of how think also year, about telehealth, range I outcomes And just to I those outperform? there last we an think was for then looking launched to tests? initial and

I'll to we're the gross an on and telehealth. update for doing turn question and on it over Dave Neil address in then what margin

saw in gross So of that we've growth. with to still given margin a the very with leverage QX, acceleration we by mid-XXs from guidance driven pleased perspective. be very the the comfortable we're We're in glasses the that

it industry.We with category the dynamic of faster environment are category. we still our a maintain as in But which in of share, time, the uncertainty macro gives in persists same operating remainder than growth we for project that for optimism. relates glasses of optical still a the to the taking the still the a stance at thoughtful are year, growing business that want and and to recovery our We us of level others prudent as

those still to very are we we QX are a portion It's potentially relates we're still as as so it QX, seeing exams.And maintaining see and X our approach product of still margin. eye growth a momentum modeling in and how mix the strong to We as mid-XXs. categories greater in contacts make to conservative up gross

the that for think did as be and of But last it we margin end we a thoughtful year, glasses be I range, within to of the remainder perhaps and be range. could we of the want maintain the toward that guidance, consistent end mix depending to persists, Assuming the on and exams contacts, level higher very mid-XXs the of ultimate low year. now, glasses, see of

and coming to deferral gross and season the tend the is highest in end e-commerce of costs see gain of That of from thought our the COGS, of thanks maintained to out the on over we've continue it channels QX our growth. FSA returning we of to leverage into said, have that very costs. to to of revenue sort those opportunities leverage we QX fixed QX, have thanks growth significant fixed that always at the being other One some margin great we retail to year. And

in invest continuing eye to to and you a to salaries.As convenience view mentioned, are telehealth, more way we business, in-person our doctor this One and of patients. and supplement our those is and customers we particularly investment fixed provide in our our doctors as our costs availability exam

to an broader have may to we in-person thanks be As have doctor, able we telehealth. hours,

that the video-assisted expand to pilots impact be eye business. eye of will to exams the currently that we scaled that year continue us and next invest exam we likely sort see as you'll on have. of area continue our gets But So biggest in

from Dylan Carden The next question line of William the today Blair. comes from

there's sort kind Just curious, And grow if purchase appreciate lift think from but year marketing time awareness? about just then the color channel of incremental cycle. you doctor growth of full by the availability. lag given new the a And to of how there's if towards think about you any it, I sort putting as comp you're between that revenue? and missed I sort apologies, that guide of second

Yes.

to our of see with So higher sales. that continue we drive level overall, doctors stores

new so onboard stores. network and new And all to we've been excited our expand doctor our into of doctors

country. There our less we to conveniently commercials we're so even now cities doctors. new located a of some team has through period, have awareness for We home us of noted. stores. on whether our are radius that's to increased there on where you drive awareness addition new direct a drive more we ramp that opening to up doctors find is within that media our brought we campaigns stores have or have been that adding that that those with our multiple online, from bought In doctors have And of as that leveraging to or existing some focusing some TV conveniently eye located longstanding messages, that and mail they're opportunity us and even classes not there's certain their exams a offer in have aware stores big who is customers the across investment exams.And we

there. And excited we're to build so a to continue momentum

will growth, retail. their doctor increase driven to of benefits, continue use We also to our are majority in-network in also help more believe growth that of know over the terms that from time.And channel as we utilization we our see customers that able

e-com the influx positively guiding months growth here, for last e-com single-digit projecting, few seen but still have to remainder year. still the for We low over the of

today comes Brooke line from question of next Roach Goldman the from Our Sachs.

just to I just question follow guess it separately, e-commerce Mark's take quarter, shop? just may just up Evan about this in start the as guiding they earlier lap especially reflected And you year. and then drive I What's lower to could you to between how acceleration more you trend Are an trends? differences is on regarding bit This customers and little in-network customers any first, Brooke. Dorschner for talk low year? insurance. to for going a out-of-network mention a And seeing things still marketing growth further single-digit on spends even last on

to front, on initial we for insurance in to be their over at who and to customers bit find tend time. benefits the So in-network that Warby more their our some use customers. a tend both spend purchase tend of best They

have customers excited we're expand insurance. to population. that do of our majority The so, vision And

So shop XX% of vision insurance. people us have who with

leveraging this is gross where at were and to improvement significant on it modest out just to to value our growth and was seeing was we're even a great getting benefits, drag business negatively that e-com make are then revenue Some easier when out-of-network.And their both a you But as ago people those compare for e-com, point, those we overall when to but both relates and we benefits in-network they're year get a margin. others with it excited of value know and people us. it are of impacting

of And our trends, are to Home direct serve faster. customers know sales, those sales Try-On overall team direct And and nicely. margin. diminishing that also purchases higher driven as portion glasses a e-commerce growing purchases but glasses. better They're in Our our glasses still particularly we we headwind have a enable us has from

also place take we're percentage repeat So by find encouraged that purchases that of higher a trend.We online.

sales, installed place largely overall be well. in our grows, And addition so, a base online as contact as will that of taking customers tailwind to

across forward some features introduce we channels more make and positively continue continue experience our to on going fun and this and to so, to the that year. are to will shopping convenient excited is that and evolve will digital right growth continue e-commerce track impact believe And improved digital later

all participation. your today's concludes call. Thank you conference This for

disconnect You lines. may your now