Warby Parker (WRBY) 8 Aug 242024 Q2 Earnings call transcript

Hello, everyone, and welcome to the Warby Parker Second Quarter 2024 Earnings Call. My name is Seb, and I will be the operator for your call today. [Operator Instructions] I will now hand the floor over to Jaclyn Berkley to begin. 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 investors.warbyparker.com. website and

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

filings, including statements. more report review by SEC X, publicly For required forward-looking law, as about or the in on Factors August these our some on based And as information to These annual update revise section please risks, the we the information of XX-K. statements latest assume Risk are except obligation forward-looking XXXX. of titled company's company's Form 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

high quarter the you, QX, of delivering approximately everyone. margin XXX we guidance, and gross good that $XXX.X and of net We're strong EBITDA points to while initiatives. to revenue morning, executed million Jaclyn, long-term strategic On a ahead making another progress grew XX%. year-over-year in basis, and our net key strong against Thank our improved pleased basis our to team share adjusted revenue end XX.X%

the previous and differences representing year to out we relative the adjusted notable EBITDA couple called X to years. quarter. When cash generated in introduced that grew flow XX.X% margin, this we also XX% $XX.X XXXX our we of million of free plan, $XX We million, nearly a expected

to drive customer spend growth. marketing increased was an in first The acceleration

The our expand our growth, and QX continuing of performance returning goals our channel to expansion, great will fourth the QX speak which e-commerce to quarterly since our shortly. Amidst And to we're and significantly of and consumer backdrop, insurance improving demand. positive customer XXXX, these our Halfway e-commerce take progress progress feel happy second quarter are active through growth. our and was growth report against to our drive consumer insurance highest to share we consecutive the challenging on was offering. optical indicates about the we third year,

demonstrate we we performance, on free driving ongoing also Importantly, and customer expanding $XX.X the growth both while raising expect and EBITDA cash to deliver our our commitment of sustainable basis in adjusted at as our our second acquisition margin flow. Based points our full brand expansion. for of both results adjusted continue and investing EBITDA, building, to are in net EBITDA which now guidance, midpoint adjusted and year revenue guidance million XXX represents quarter

the more will later key drivers Steve QX our I Before of call, the review in Neil on provides detail that results. and

of momentum fleet many innovation. marketing, versus product our strategic core We positive see of business, growth in with our growth glasses including to continue in our we to business our our last glasses acceleration First, QX in expanding investments, the store and exam improvement an attribute year. and

our overall within to growth over to gross represent glasses customer. Glasses adoption Progressives sold significant channels glasses, lens majority that an XX% still is penetration which influencer, growth acceleration in which in growth we of complex marketing driver highest an expansion year-over-year basis, glasses the single-vision penetration a quarter. our and Given by improved in cater believe margin of and benefit there's our prescription our our the On business, opportunity of paid time. of of continues the single-vision we more also from like QX, are glasses important to glasses and social, drove increase the prescription a driven only types. margin product, streaming represent also progressive investments

category, which frames, start often progressives, quality what seen a elsewhere. progressive and have $XXX, strong products price coatings, the uptake visual we and offer of the lenses comfort better of Within fraction precision including similar customers cost at and at of

a to While our our experience for precision we we in online quarter launched in to expect higher recently progressives' only customers. e-com, remain provide stores than more this penetration progressives seamless

anti-fatigue, continue to customers starting and enhancements collection revenue and recently to the sunglasses. like more and coatings to lens to to polarized Italian-made light-responsive, introduced higher-priced like additional Options seeing options average business, diamond light seeing sunglasses add custom these, choice. more recently in contributed add lens have our like also colors nicely launched addition them blue ability anti-reflective expand not our customer. We're only to more give We those at complex customers lens option types, we non-prescription to in constructions our cut Within with also select prescription per lens to complex sun $XXX. we're frames buy the

price While positive, accessible, majority very $XX point. at to our the has new the price our of response frames all-inclusive are sold our frames points across multiple still been

which channels us results. believe as we're efficiencies diversified low-double seeing of digits while media with model while strong scaling channels, the We for disciplined, and of across our percent QX, to our was key the improved affords been we're consecutive results maintaining ability spend QX our second media the Similar now into variety a to active revenue. X stay growth, The has driver flexibility, quarters. we've been seeing, including we've of a customer pleased strong in significant marketing certain where leaning

to top our the we'll are certain and store us. and these Direct streaming shopped Parker year, broader in continue testing mail not scaling yet results search, of linear are this regard complement to Looking ahead drive remainder with exam aware shown at as channels spend. reasons and who awareness, customers the of has influencer that have Warby the promising

seeing revenue new We strategic X.X and with grew marketing while XX-month per customer our of As stores, in X.X% a trailing anticipate throughout exceptional we retention QX purchasing ended a an active upwards we X.X%. continue know acquire result repeat across average on million Parker year. deliver an see the increase growth metrics a active and once customers, cohorts. basis, experience, We consistent patterns to Warby customer we of investments inflect and customer

subsidiary our a roughly excited For most a even had plans. with millions efforts, and announced integrated, cohort, we serve the in-network to MetLife, marketing year, Earlier expanded months. Complementary with wholly we XX in-network we're be core once fully bring recent months able roughly XX% over of through of additional which, lives retention Parker. Warby over and owned revenue insurance to XXX% in an XX relationship of to will this Versant out-of-network Health, customers more rate network

with integration is the expected the of Versant to end period at year. Our be Health before complete our busy

out takes meaning check easily and in-network Given they our parallel into next out-of-network pay pass Warby tool their cover for out-of-network be incorporated customers reimbursement pair to at over awareness about locate of initiatives, these grow benefits. insurance online to it a expect $X drivers. of pocket $XXX at plans we eyewear average to or that Neil an a to help Most the to we and have use their for it longer-term customers can it our not in to benefits their time growth stores years. In of for leverage purchase to eligibility customers continue our several insurance in-network tailwind universal and now, Parker. And the this often to and for contacts, coverage in-network average glasses talk guidance realize I'll additional Warby Parker, over

Thanks, Dave.

optical an XXX-plus third still e-commerce X% QX store were our The QX in Savannah, a quarter XX including the and New of year, a QX Six growth last runway potential, expansions within growth revenue since in our Wilmington, were of would and XX City. new store over North year-over-year, have we count driver XXX Oaks, Retail represent QX, in including QX, With long and returning new ending our Carolina; reaching saw glasses our markets, year-over-year, complemented before including channel, new small stores, single-vision channel's consistent e-commerce an in we've from store QX. Pittsburgh channel. improving highest Georgia; markets, with we stores XX,XXX new XXXX. Since longer-term was our still as base, which shops an new U.S. Within existing stores Thousand well California. highly e-commerce with as York D.C., XX% fraction both in growth lenses the the Five of coupled by customers. strength business, net approximately improvement increased of of productive contact in added

New York, we growth ahead to What's Chicago program. growth infill overall an meaningful growth largest underscores markets As density. existing particularly previously, and we believe of the drive Home where in opportunities is inflection positive highest us benefiting and diminishing we partially many that headwind our to see Try-On from also e-commerce is this shared awareness expand see markets, mature strong to as overall retail a benefit like and both is channel in to which store encouraging growth. Dallas, purchases, brand continue omni-channel new glasses our by markets as We growth from from of market greater but ongoing offset we've see most was and been

our In our devices and our accuracy. invest omni-channel category, continue enhance that of all remains Our their customer and with features on life-like eyeglasses online sunglasses within tool, on unique QX, in customers award-winning enables and Virtual piloted which Try-On to experience. we X to we technologies experience in the personalize try digital

of glasses called seeing our virtually eraser. users vision digitally eraser pair be generative to of keeping when on them their to Virtual new try when glasses including requiring at on. AI glasses, One is to Many able these computer their them and customers on Glasses strong while erase features uses looking Try-On. glasses using wear have see their face, enabling current the to our screens, on keep themselves prescriptions, to

our The of QX, in features an tool that live for stylist AI-powered second makes throughout is styling testing After frame users. are at recommendations like It's a app. iOS fingertips. now both virtual these our your feature

us to experiences by and service to and value. effort enhance our to this of propensity revenue, vision retail average. approximately is higher referenced their growing elsewhere the lifetime only technologies customers, to piloting the our prescriptions like highest-value glasses. In the as to to expectations. The on we're year-over-year commitment portion but the highlighting below approximately We the exam tools video-assisted go XX% average. replenishment which continue and your our of of well grew team capture to data of our more one attracts given more while eye of retinal We scale billion and little quarters approximately to plan revenue also customer the nature to which the remains over quarter it customers XX% in approximately Today, Warby XX% strategy remains our the eye majority some revenue, and and holistic to exams to leading business a care also leveraging industry not contact of $XX lens of XX% bring Team grew delivering into past, XX% fourth In industry experience, productive. exceeding customers, segment continue QX, sales broaden final quarter, awareness opportunity get technology continue to industry. In of invest eye still their dive able of exams new making customer our we year-over-year to patient growth drive front customer commitment well Parker, of and purchase this the I'll imaging. product of the below the Warby's this share in reasons X% is best-in-class

find eye on drive purchased impact to We than exam exam industry-wide, them stores exam to provide continue rolled utilization, exam Our stores including at direct have higher out place. and the we'll sales of expanding about services, glasses and location in and these new business. that prescription as continue throughout has takes continue non-exam a to our feedback stores, our will approximately eye great an are XX% them had same several so patients QX. Scaling QX, business, glasses we

As eye we we've penetration driven eye that benefit enabled only customer, line purchased exams, also we capture exam while an Warby a a to doing but Similarly, revenue as glasses on strong average the the X we business that has have coverage, of of to delivering even And exam. When we launched post these the stores offering revenue, us per Parker, growth top in impact. previously number we've we've not increased revenue, stores not to a committed have scale progressive seen greater exam contact see as growth building doctors can strategies added and lenses did by higher lenses. good.

to initiative Texas; exams expand and give quarter, school-based Project X screenings, distributed This optical Las more this of whom, glasses school free children glasses we U.S., plans lab for their than program, we've cities: pairs with the the first this and We program, out of vision Nevada. Since finalized work vision in to new Project students. we fulfill Through government our in Pupils pair. to local Pupils many Vegas. Vegas, we of organizations and Austin, is launched to Las agencies to our orders eye XXX,XXX

So excited the the like team attract team review these turn performance. I'll to to there continue every to exceptional community. day. And to in details initiatives and now, Steve talent their our of is motivate it particularly students impact financial that It's own the over

year-over-year. second revenue XX.X% From year-over-year, e-commerce QX while of the in for Thanks, revenue $XXX.X increased up XX.X% quarter increased XXXX. channel came Neil Dave. million, X.X% retail versus a at perspective, and Revenue

Turning last ending course XX XXX up quarter net to with the XXXX. XXX of of months, new from stores, the over XX end QX added stores, stores we our the the at

retail same period on XX than greater months, blended basis, retail year. compared at stores the new stores performance XX% and was last Looking including as open to a both productivity QX

year-over-year we including per openings. of change the retail a stores in period, As our store for the reminder, the new define retail number as productivity average in open store sales

well timing throughout this by the is of can for openings As including store in case it quarters, the quarter doctor and stores. metric impacted composition year-over-year, number timing we new as as as of most factors, see of hiring fluctuate the a be the

greater observe strong than stores months, that open growth. year-over-year have continue XX been For we to

Our X-wall new line deliver stores XX% strong performing unit margins XX-month paybacks. continue to of in economics, our with and target

with For than performance XX adjusted QX, million, more line stores XX% X-wall with EBITDA our was store revenue in consistent target average $X.X and open months, margins. per was

of quarter, XXX We've X.XX retail with eye a a this customer customer reduced X.X% quarters, of for points which exam XX% perspective, XXX year, perspective, been we XX% million and to course consistent QX trailing XX-month reflective the new year, the to mix more locations, exam our we with as added with in a net past Over fully believe fleet. From we've the capabilities improvements anniversaried QX versus were active overall second spend. XXXX. From in pleased basis for and active customers, eye of now XX finished X channel or marketing an of QX total our our stores see bringing households, on we XX% the of represented business, growth represents is up stores active periods increase basis. past that sequential by year-over-year impacted of

continue upward Looking to seeing this anticipate ahead, inflect the metric we year. throughout

and our factors, of exam $XXX continued eye uptake see in our up to of points. driven which strength continued lens of mix in QX, such This premium lenses year-over-year. frame price X.X% and contact in average continued also per at a revenue was by few We ramping customer, both higher-priced progressives, a came as higher including sales,

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

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

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

to gross I excluding speaking stock-based comparability, For compensation. margin will be

cost outbound expansion. in margin driven was business, is The category, at basis highest profit year-over-year. growth paired margin points to gross the of reflecting revenue pleased our product period, year-ago that to in of gross gross gross increased customer with year-over-year up XX.X% in in in report efficiencies lower compared glasses XXX consecutive XX.X% our by came benefit optical adjusted XX% margin shipping margin percent revenue, our gross We're approximately the QX, owned which and in dollars increase a our laboratories. quarter as Second second continued growth, quarter,

the stability margin lower exams, as our eye of including strength and of term, fixed long As to XX% margin expected, a we of continued of store customer. per in offering are we've contacts Partially our saw previously offering offsetting vision as leverage salaries dollars, contact is profit number noted; QX in average revenue accretive as lenses QX, than scale portion care growing cost gross part higher in goods, occupancy, exams the gross continued profiles which were: retail over to gross scaling and core offering Expanding of grew. within up base. which and the but were key and eye medium eyeglasses, our year-over-year stores holistic have optometrist driver the our

adjusted or compares from from XX% XX.X% in adjusted corporate deleverage million and QX or This XX.X% percent expenses of XX.X%. of from was spend to $XX.X or disciplined a expense In and to a subscription-like reminder, expense salary main experience X addition, our gears and purchase contact components: SG&A headquarters, have frequency our business a management higher XX.X% million as lenses costs purchase and to increased million cycle. Shifting Try-On customer XX.X% for revenue or Within declined of came at revenue second adjusted SG&A, of for non-marketing expenses. Adjusted offset includes general as our $XX.X as of the million in marketing retail in non-cash SG&A revenue. stock-based overhead The SG&A XXXX corporate revenue. by including SG&A leverage of marketing expense. marketing employees; program; excludes SG&A, spend, to quarter $XX.X revenue. Home Adjusted $XX.X compensation like SG&A

EBITDA the of of period. million, revenue of in approximately which points we Turning adjusted EBITDA $XX.X adjusted XX.X%, adjusted X.X% XXX an year-ago expansion. adjusted $XX.X representing adjusted This represents million the to margin EBITDA compares EBITDA now or to quarter, margin of basis of second generated EBITDA, in

sheet, free the sheet in will for positive $XXX million to approximately reflecting we continue Turning now and fifth growth flow ended position, a we with and our consecutive cash our in which deploy QX, quarter, balance to balance operations. strong cash, were $XX million deliberately support generating to

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

we conservative products our year-to-date. environment. macroeconomic durable is our are given providing to Parker our momentum team broader healthcare business, maintaining services, we're the being a encouraged and Warby category, seeing a operates guiding outlook. Now, said, in and the by stance on That

multi-year over percentage net forecast, we're forecasting above of in our to compensation guidance performance $XXX year revenue equates million Co-CEOs revenue XX.X% to expansion; QX, in still stock-based range approximately revenue year-over-year We're year. compensation still equity XX.X% mid-XXs to in both stock-based the to our our stability in consistent margin the points in remainder our leverage as while long-term Stock-based revising the of a growth; to basis as approximately our XXXX the experience percent XXXX is compared X.X% by Given XXXX. as openings. We XXXX. in our approximately the of result to above million, million for anticipate a a net periods the X% and will equity long-term or of X%, XX Stock-based teams, X% EBITDA expansion in customer CEO's percent year-over-year still of store revenue range, is which margin following: adjusted XXXX. of co to with as be leverage our of full at normalize within grants XX% SG&A, forecasting efficiencies midpoint compared the XX% a periods low-teens. XXXX. in compensation grants a an in We keeping spend approximately net of higher margin anticipate and of revenue both of of compensation of in as to and XXXX to to representing expenses, $XX.X achieving percentage We're result marketing XXX in EBITDA with as store gross next our of for stock-based adjusted compensation be new by staffing supported be the driven continued year corporate adjusted $XXX multi-year to revenue; EBITDA forecast a of in X%, a revenue ongoing

From million the a million, QX, approximately approximately revenue XXXX, QX guiding $XX the which EBITDA million, a X% range. to midpoint following: perspective, approximately we're $XXX in adjusted to of we're of $XXX represents XX% year-over-year. XX% between representing and growth bottom at of guiding margin of our For line to

again Neil, open be of our in expect EBITDA shape that, year-over-year. Thank approximately expand joining Given your consistent margin QX, lower adjusted for pleased we for questions. this to still QX, now outperformance take and with we QX year, to by basis points morning. Dave please EBITDA line while Q&A. us Operator, XXX adjusted last the I you expect the are With to than

first from Our is question Altschwager Baird. from Mark

I where guess, health would I in then, the on to above Neil, your that's than could you're walk the the hear the there. just to takes on was Steve, puts it and us Dave, revenue slightly that are QX. views QX you guide, through of great be QX points guiding the XXX we are And industry, hoping lower first, about broader cycle. margins but replenishment basis

Mark. Thanks,

demand trend category this seen So, side, major in yet change demand year. see pent-up in to the a and signs we've industry haven't on of the

discretionary to be higher of serve household resulting revenue customer, the into of households. macro side, items, activities. from are certainly discussed. the largely healthcare, we're being first subject customers spending business we spending at but that of benefit those prices, overall our $XXX,XXX, Now, continue to experiencing, independent intersection the we challenges we're lower our many who than to sits better per our in being fashion And spite the that do in shape given second immune opt mainly that as to And on not consumer and companies consumer and the low eye north a discretionary products, forces, average we health-related with X higher-priced fact high-income income in essential consumers of income seem median some the

health conditions, when side, including essential health-related benefit On we people's change. serving prescriptions from eye eye the

shift differences category patterns significant yet a we've the to Here, see year-to-date. not and have seen in trends in meaningful

smaller overall, are in intentional of and see beginning A nearby. percentage results this ] other our patients from carrying with shoppers are a more percentage of Parker But shopping put an do their we turn know discretionary only long our visit. as that of required also category kind that some that enough, so, And Warby health-related higher traffic, [ into exam does us off spend. bags and if to in their continuing journey stores of with customers is it spending

So, increase at guidance without expecting demand that some not are believe and counting hit point, we can category year demand. to this an category on but targets in are we our improvement

Mark, for QX. this it as your is relates Steve. to question Thanks

went So projections what little into I'll of unpack QX. a our for bit

As gross and point our year, were little the of as year-over-year. last range and to last point we that gross line QX, up that, midpoint margin a growth margin we've we toward are our of turning you in would I where of of relates XX% projecting gross as good a comping top year expansion. of mid-XXs off X would a to point. margin, But reference consecutive We're reminder, strongest it north quarters moderates QX to seen

reference expansion last QX you planning towards same the point level for of seen that mid-XXs as year we've the and date in to not we're of would So points. really

we're of reference in good And a SG&A of ex-marketing. the revenue, out, SG&A percent point. a level as a of down as what you a it called ex-marketing to As of and came QX really as percent QX really we we're as statement, income in a for revenue, projecting in revenue low-teens saw spend within spend planning XX.X%, with SG&A, with at marketing, roughly percent spend for relates the consistent as marketing stepping similar

we that's quarter, percent and ex-marketing of then revenue. expansion, the so, margin unpack how gross leverage with consistent an a coming spend to marketing as from opposed consistent as And SG&A real

is question TD next at Chen Cowen. from Our Oliver

that. sounds or you exams and You've commentary. in well? to and in the thoughts as you What you big contacts love opportunities some making expect yourself inning It drive forward the differentiation? is nice been you innovation and awareness mentioned, ending that the weakness Also, benefits weaker to bucking there what your I continue? drive going Also, like have would seeing to Do peers been a are others on factor lot some the are there, optical taking industry and been as efficiencies have distinguish hold. those trends, lab doing in as encouraging. QX with and of initiatives

Oliver. Thanks, What payoffs we're Neil. investment This to continuing is in marketing. increased from see is our

couple is larger many the on continue backdrop -- well. And that of off attract So, the of we've of sort to this have and to lot of diversifying customers have multiple all that network existing that's the a of in much been of last across gone stores built back which out market, as of ramp. engage output years of of channels, pre-pandemic sort strategy sort a creative our of and paying opened customers in to new and, course,

advantage access increased footprint. course, of So just increased we're sort taking through our of and larger of awareness,

to their now wearing existing Virtual a this that innovation, because sort first glasses mentioned. of glasses was as Try-On, we We're and to continue of many people about enables in the which our already have true-to-scale sort We that tool, glasses. can't makes to of eraser, while latest invest we Try-On, feature, excited their use see existing our our Virtual best-in-class without really know customers

X about like a So us. friends the family it's to customers think buying to going that find finding perspective, buy make experience our come returning that And then, good easy we offer have customers Warby our new start we I us customer with tell are contacts optical their and continue we that with to perspective, what continually us. From just marketing. From back a with that from to customers, some then that continue really up optical And been flywheel, Parker productivity this labs. us, These investment are given end this contacts to to contracts of are us our and tools and exceptional it that and glasses. and is enhance purchase for value, customers while want shopping added highest-value customer surprised we and that see our our to customers then an the that by lab there. we creates existing constantly have learn scale acquisition the

in and we higher do things As at when cost. it lower the past, we at do ourselves, faster quality we find,

great from X So optical our sort been those to of leverage investments labs. see it's in

next comes question from Janine BTIG. from Our Stichter

on margin. Steve for question A the gross

the But I positioning the see you're -- So them for year, case the What in outperform, mid-XXs drivers? And of single-vision to if then, like single-vision of both continue middle upside are about the where we look of thinking how kind margins some see think outcomes [ glasses? continue back in maybe could of of guidance. settle understand ] year? about back can if growth that right range to the of glasses the right that us you and gross half longer the could the you half we for term other then, help

just mix chose optical meaningful we and during strong the inflect In and margin we with our would a sure. carriers puts product main strength think and mix. within shipping gross of efficiencies growth margin lot lab upward. factors way There the be very certainly QX, talked to the Yes, which are impacting a shipping QX that margin. quarter. we of about, efficiencies easiest We've just glasses number helped QX, with and saw and seen And gross about takes in work that in of to network,

As we about this strength eye the year, back continued contacts. in and exams we think seeing are of half

X taking offerings glasses space in creating as to so, half this growth. to significantly we a And projecting stance the year. it continue are relates ramp back to And of conservative we're see the those

as to upside there some higher growth relates could margin coming to in it be gross than glasses anticipated. So

projecting, full And year, on that glasses, mix represents the of still the are relative that where of embedded exams, the potential the midpoint we've we the really, really mid-XXs, of upside. and in range. For based terms contacts business

from Dylan Our next Carden William question at is Blair.

glasses is that effect, question, the how that these of penetration from an were kind sort if some model. listing? showing on that happen where categories, think there's way major now with progressives, do business, of you've the of And the contacts, of a I rule of thumb that that's the Curious, where those all doctors in kind Maybe of and the added industry exam. doctors, And to know to relates kind about XX% don't are how exams, direct to ramp? you the of as update lag at your sort any rates versus related if up

to and preferred fraction that Warby small a our exams, use, care So, we and eye equipment into stores, the Parker the new doctors our on. of still offering. and offer more don't to that this those of We only on that given technology We glasses our an for doctors, we exam. we've them contacts enable something just given clinical raising continue after It's eye prescription than innings cutting-edge focus -- that customers more eye and stores, purchasing employment a be of it's eye focus continue especially sort at awareness still front, many customers are we and care. of journey hire place are the on given and that continue tasks. of the rather to to find of our eye the given a public early And with general administrative of so realize the we our design our location optometrists we care about that

to the in XX% just that. see We they and XX% we're still through ramp, to market, multi-year buying eventually of this and a a eye mid optical us expect that retailers is And that but yes, strategy again, get XX% exam. fraction most get we their to where for revenue glasses are really a long-range And revenue. the customers of got exam to that of

a next as see this continue tailwind exam our stores. expand and will be innings, availability as early continued this to to continue the we for awareness us for of offering, exam decade about sort we our in So we as raise

to investments about. in So and expanding the business, will exam continue that video-assisted it's scale Every to lane, that store that us example, open years ahead. at we we're eye has for to make really something excited we exams, least new continue enable in one

about as about, of business. exams to XX% And make in we contacts our opportunity journey, and up where contacts your we that so, question roughly expand to and talked are

with a network mature large is closer optical a XX%. For to more that of stores, retailer number

number that retailers. up national of exam, eye XX% of our terms that for In X% optical makes roughly being talked about business. We've

just share glasses, you billion share categories business X% to the Not profitable our glasses mention innings. versus about early XX glasses just large. is industry, In $XX X.X% exam that our terms our that represents the the of X.X% which prescription market category, most and very if these particular market got prescription of and look eye billion under -- market category within still our at of of optical We've at contacts market of largest roughly market. the $XX

of if with squeeze offerings know that Curious, grow of the you -- newer awareness to in these kind medium more But have I term. any I of some sort one, that could kind from retail leverage start of as channel utilize to take standpoint? some thoughts of a marketing timing might kind being to to you down of when the spend, able the marketing your

and today. We where is invest corporate we We leverage as can marketing expenses expand while years. to marketing other more we of and increased continue EBITDA, more anything, coming SG&A. we might think maintaining in don't even over sort from months If other lowering in that anticipate the investing gain or it

Our from next is Brooke Roach Goldman at question Sachs.

or any into get moved back in price that strong you basket the changes customer any to the the as sensitivity Are was I the recent thoughts of signs trends on hoping customer seeing to or of been of per size in sustainability AUR this quarters. seeing half year? revenue your you've you've

Thanks, Brooke.

have of percentage us, their customers contacts, some other price our who journey high to average increasing supply exam newer often buying are us; coming progressives a at trends kind we're of which terms point; in an who And of see as not are continue buy a increased it's contacts, seeing. combination and, including: in and of that high an to be to buying per from the higher adoption of but only our from annual glasses revenue higher with that our products dollar of very precision like starting of products of come We customer attach encouraging factors, percentage rate and a tend very purchases. patients, a from glasses are customers buying

glasses-only relative percentage of we from from being some are lot price can new higher products, of products comparable our see services we've to purchasing customers appreciate different and people so, a ahead, us. And to a point value. higher runway value where our And whether as collections price significant that introduced comparable buy those people buy elsewhere, and customers move price the multiple we items, as points in products that offerings, at frame them or can to lens tend general,

any seen haven't price price of introduced products we so, as a at points. we've resistance multitude And

That's very helpful.

you the are seeing to trends cohort are current EBITDA fleet relative your elaborate the As are And here? improvement How prior by expectations? your in maturation levers can today? seeing of What a maturing store today? trends you're within follow-up, on cohort what from X-wall each that you profitability sales biggest

SG&A of profitability over in really expansion -- The expenses. is Brooke. our biggest leverage biggest Neil, is of The sort continued corporate for this opportunity

be very profitable. Our stores continue to

continue of We payback periods XX months. to targets our see at

rates We're finding at see margin XX%. maturing of target We to cohorts. at stores new similar continue at previous X-wall our

performance we're strategy. So consistent from replication retail our finding

us we're and to see And in years stores XX so, do open -- continue you'll year, continue the open that's that track to this why we'll on to ahead.

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