Warby Parker's losses widened in the third quarter as direct listing costs offset 32% sales growth

November 15, 2021: -On Friday, Warby Parker reported that its third-quarter revenue rose 32% from year-ago levels. Still, its losses widened as costs associated with its recent direct listing and stock-based compensation ate into sales.

The eyeglasses maker’s shares were not changed in premarket trading following Warby’s financial report as a public company. It went public on the New York Stock Exchange via a direct listing on September 29.

Warby’s net loss for the three months ends September 30 increased to $91.1 million, or $1.45 per share, compared with a loss of $41.6 million, or 78 cents a share, a year earlier.

The company reported $65 million in stock-based compensation expenses, $23.9 million of costs tied to its direct listing, and $7.8 million in fees from a stock donation to the Warby Parker Impact Foundation.

Warby also said that as it grows its contact lenses business, which is about 5% of sales today, those transactions are less profitable and, therefore, can drag margins.

Revenue grew 32% to $137.4 million from $104.1 million. Sales were up 45% on a two-year basis.

Neil Blumenthal, co-founder, and co-CEO said in an interview that consumers’ shopping habits are starting to revert to pre-pandemic times as more people come into Warby’s stores versus buying online.

“But we don’t care where that final transaction occurs,” Blumenthal said. “And we’ve still found over 70% of our customers are browsing and shopping and interacting with us on our website and our app before they transact with us.”

The company said active customers totaled 2.15 million, up 23% from 2020 levels.

Warby expects revenue to be between $539.5 million and $542 million for the entire year, representing as much as a 38% increase from a year earlier or 46% growth on a two-year basis.

The company is still planning to open 35 stores by the end of the year, bringing its total count to 161 locations.

Warby shares closed Thursday at $53.51, down almost 1% from its opening trade price of $54.05.

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