Warby Parker (WRBY) TD Cowen’s 8th Annual Future of the Consumer Conference summary

Business highlights and growth strategy

• Over 250 stores in the U.S. and Canada, with plans to reach about 280 by year-end and a long-term target of 900 stores based on third-party analysis of productivity and payback periods.

• Retail expansion is supported by strong retention rates and a robust leadership team, fueling continued growth.

• E-commerce has returned to growth, providing leverage across the business.

• Active customer growth has accelerated for three consecutive quarters, with Q1 at 3.2% and expectations for further increases throughout the year.

• Marketing spend has been rebalanced to about 12% of revenue, focusing on both brand and performance channels, with flexible weekly allocation to maximize efficiency.

Industry environment and competitive positioning

• The optical industry experienced disruption during COVID-19, but omnichannel capabilities enabled continued growth and market share gains.

• The industry has seen flat to down years post-pandemic, with a typical glasses replenishment cycle of 2–2.5 years, and a rebound is anticipated.

• The market is split between independent shops and organized retail, with independents lacking capital and technology investment capabilities.

Financial performance and margin outlook

• Q1 gross margin improved by 160 basis points year-over-year, driven by 13% growth in glasses, the highest-margin product.

• Progressives, the highest price point, represent 22% of prescription units and continue to show strong growth.

• Increased in-house production at vertically integrated labs has reduced costs and improved customer experience.

• Gross margin is expected to remain stable in the mid-50s% for the year, with potential upside if glasses growth continues.

• SG&A leverage is expected from efficient retail staffing and corporate overhead management, with marketing spend stable at 12% of revenue.