Warby Parker (WRBY) reports second quarter 2022 losses

A general view of the atmosphere in Warby Parker’s store in The Standard, Hollywood

Michael Buckner | Warby Parker | Getty Images

Warby Parker on Thursday joined the slew of retailers who cut their financial forecasts for the year, although it posted a lower-than-expected loss in its fiscal second quarter and sales in line with analysts’ estimates.

CFO Steve Miller said the eyewear maker faces an “uncertain macroeconomic environment”.

“We are taking a disciplined approach to cost management to prepare for sustainable growth and profitability,” he said in a statement.

As part of his efforts to cut spending, Warby cut 63 jobs, which represent about 2% of his total employee base and 15% of company positions, a spokesperson on CNBC confirmed.

In recent weeks, retailers including Walmart, Best Buy, Gap, and Allbirds have lowered their sales or profit expectations as they begin to see consumers cut spending on discretionary items, such as apparel or electronics, due to the rise in sales or profits. inflation. At the same time, though, luxury brands like Ralph Lauren and Versace owner Capri Holdings say people are still spending on expensive shoes and bags.

In Warby, customer demand began to decline in the second half of May, executives told analysts in a conference call Thursday morning. The company also said it had withdrawn its marketing expenses as fewer people visited its brick-and-mortar stores.

However, the retailer’s shares rose Thursday, closing more than 19%. Investors praised the cost-cutting efforts as Warby attempts to make a profit while still in growth mode.

Here’s how Warby did in its fiscal second quarter ended June 30 compared to what analysts expected, based on Refinitiv estimates:

  • Loss per share: 1 cent adjusted against 2 cents expected
  • Revenue: $ 149.6 million versus $ 149.5 million expected

Warby’s loss for the three-month period ending June 30 increased to $ 32.2 million, or 28 cents per share, from a loss of $ 18.8 million, or 35 cents per share, a year earlier. Excluding one-off items, she lost one cent per share.

Sales grew approximately 14% to $ 149.6 million from $ 131.6 million a year ago, in part driven by loyal customers who spend more money on average.

The company said the number of active customers increased 8.7% to 2.26 million. It defines these customers as persons who have made at least one purchase of any product or service from Warby in the previous 12 month period.

“While the losses are disappointing, they are somewhat understandable as the company remains in expansion mode,” said Neil Saunders, CEO of GlobalData Retail.

However, Saunders said, the main concern is that the money spent must translate into stronger returns.

For fiscal year 2022, Warby is now asking for sales to fall within a range of $ 584 million to $ 595 million, down from a previous range of $ 650 million to $ 660 million.

It sees its Adjusted EBITDA stands at around $ 22 million to $ 26 million, including a $ 7.5 million hit related to business disruptions related to the pandemic.

In the last quarter, Warby said it opened nine stores, bringing the total number of physical locations to 178. The retailer, founded online in 2010, has stepped up its real estate investments to reach more customers and market its brand. It hopes to grow to more than 900 stores someday.

In addition to his glasses, Warby has a contact lens business and offers eye exam services in his stores. The company said people who buy contacts from Warby end up spending more than those who just buy his glasses.

Including Thursday’s gains, Warby shares are down more than 60% year to date.

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