WRBY Q2 2025: Mid-High Teens Growth and 300bps SG&A Leverage Gain
- Omnichannel Growth & Pricing Power: Management highlighted strong sequential revenue acceleration across both retail and e‑commerce, driven by accelerating active customer growth and selective price increases that boosted average revenue per customer with minimal negative impact, supporting a robust bull narrative.
- Innovative Digital Initiatives: The introduction of the AI‑driven Warby Advisor tool is drawing high customer engagement online, enabling the company to reallocate resources from its sunset home try on program into higher‑ROI marketing and customer acquisition, which should further boost revenue per customer.
- Strategic Partnership & Future Growth: The partnership with Google to develop AI-powered smart glasses represents a transformative long‑term growth opportunity, potentially unlocking a vast new market and strengthening Warby Parker’s competitive edge.
- Discontinuation of the Home Try On program may lead to a gap in customer acquisition and conversion if the transition to increased reliance on stores and digital tools does not immediately compensate for the loss of this proven channel.
- Uncertainty around the Google AI glasses initiative, including the absence of a detailed timeline, poses execution and adoption risks that could delay its expected contribution to future revenue growth.
- Selective price increases—while currently well received—could pose a downside risk if consumer sensitivity to higher prices emerges over time, potentially dampening the growth rate in active customer acquisitions.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue growth | FY 2025 | 13%–15% | 14%–15% | raised |
Adjusted EBITDA Margin | FY 2025 | 10.5%–11% | 11.1%–11.4% | raised |
Store Openings | FY 2025 | 45 new stores (incl. 5 shop‐in‐shops) | 45 new store openings (incl. five shop‐in‐shops) | no change |
Gross Margins | FY 2025 | no prior guidance | mid-50% range | no prior guidance |
Stock‐Based Compensation | FY 2025 | no prior guidance | 2%–4% of net revenue | no prior guidance |
Net Revenue | Q3 2025 | no prior guidance | $223 million–$225 million (16%–17% growth) | no prior guidance |
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Growth Outlook
Q: Eye care consumer outlook and SG&A leverage?
A: Management expressed confidence in continued sequential mid–high teens growth driven by strong active customer numbers and noted approximately 300bps non-marketing SG&A leverage improvements, reflecting disciplined cost management in a dynamic market. -
Revenue Acceleration
Q: Drivers of July acceleration, active growth vs ARPC?
A: The team observed an omnichannel lift with retail and e‑commerce contributing, where selective pricing and digital innovations like the new AI-powered Warby Advisor have boosted both customer growth and average revenue per customer. -
Partnership and Pricing
Q: Google progress, Target shops, and pricing feedback?
A: Management reiterated enthusiasm over partnering with Google for AI glasses, reported positive early reception of Target shop in shops, and said selective price increases have had minimal impact on conversion while enhancing premium sales. -
Strategic Opportunities
Q: Google differentiation, insurance, contacts, progressives opportunity?
A: They stressed that superior in‑store expertise and the nascent AI glasses technology provide a significant competitive edge, while a robust insurance segment and room for growth in contacts and progressives offer long‑term margin and market share improvements. -
Home Try On
Q: Home try on program reallocation, prototype timeline?
A: Management explained that the home try on program is being sunset so resources can be reallocated to higher‐ROI marketing and digital initiatives, and no timeline has yet been disclosed for a Google AI glasses prototype.
Research analysts covering Warby Parker.