Q4 2025 Warby Parker Inc Earnings Call [BACKUP]

February 26, 2026

[Company Representative] (Warby Parker): low double-digit growth as we think about the balance of the year. The one thing that I would share is that our growth is actually quite healthy. If you compare to what we saw last year in the industry, which was up about 4%, we grew at actually 3 times the rate of the industry, but not just on compounding price, which is what we saw in the industry, given the decline in units that Dave spoke about earlier, but we had a healthy balance of unit growth, ASP growth, and customer growth. That's an important dimension in terms of the health. The other thing that we continue to believe, given the strength of the proposition, is that we'll continue to be a market share gainer, not a market share donor.

[Company Representative 1] (Warby Parker): low double-digit growth as we think about the balance of the year. The one thing that I would share is that our growth is actually quite healthy. If you compare to what we saw last year in the industry, which was up about 4%, we grew at actually 3 times the rate of the industry, but not just on compounding price, which is what we saw in the industry, given the decline in units that Dave spoke about earlier, but we had a healthy balance of unit growth, ASP growth, and customer growth. That's an important dimension in terms of the health. The other thing that we continue to believe, given the strength of the proposition, is that we'll continue to be a market share gainer, not a market share donor.

Was that our growth is actually quite healthy. So if you compare to what we saw last year in the industry, which was up about 4%. We grew it actually three times the rate of the industry, but not just on compounding price, which is what we saw in the industry given the decline in units that they spoke about earlier, but we had a healthy balance of unit growth.

P growth and customer growth. So that's an important dimension in terms of the health the.

Other thing that we continue to believe given the strength of the proposition is that we will continue to be a market share gainer of market share donor and so even though we expect a softer Q1, just given the weather impacts and what we spoke about on the call. We do expect to see acceleration and returned to more normalized trends as we look ahead. The one thing I'll just point out from.

[Company Representative] (Warby Parker): Even though we expect a softer Q1, just given the weather impacts and what we spoke about on the call, we do expect to see acceleration and return to more normalized trends as we look ahead. The one thing I'll just point out from my opening remarks as it relates to what we experienced in Q1, is the big takeaway is that the fundamentals of the business remain healthy. In those periods where weather was not an impact, we talked about the high teens growth of our retail business, and also when you think about the normalization of the headwinds with e-commerce, very healthy, low double-digit growth in terms of web glasses and contacts. We're very encouraged about what's ahead, but we also want to be consistent in delivering what we say we're going to deliver. Josh, would you like to talk about tariffs?

[Company Representative 1] (Warby Parker): Even though we expect a softer Q1, just given the weather impacts and what we spoke about on the call, we do expect to see acceleration and return to more normalized trends as we look ahead. The one thing I'll just point out from my opening remarks as it relates to what we experienced in Q1, is the big takeaway is that the fundamentals of the business remain healthy. In those periods where weather was not an impact, we talked about the high teens growth of our retail business, and also when you think about the normalization of the headwinds with e-commerce, very healthy, low double-digit growth in terms of web glasses and contacts. We're very encouraged about what's ahead, but we also want to be consistent in delivering what we say we're going to deliver. Josh, would you like to talk about tariffs?

Opening remarks as it relates to what we experienced in Q1 as the big takeaway is that the fundamentals of the business remain healthy in those periods, where weather was not an impact we talked about the high teens growth of our retail business and also when you think about the normalization of the headwinds with e-commerce very healthy low.

Double digit growth in terms of web glasses and contacts. So we're very encouraged about what the head what we also want to be consistent in delivering what we say we're going to deliver.

Josh if you like to talk about tax.

Josh: Hi, Dana. As it relates to tariffs, you're absolutely right, certainly volatile. The Supreme Court ruling from last week is pretty recent, we're still analyzing those impacts. When you think about that ruling, or you break it down to 2 pieces, first, there's the refunds on what we already paid for, the Supreme Court didn't really say anything specific regarding that, we're continuing to monitor that. We'll obviously take the necessary steps to preserve our rights as it relates to those refunds. We have not assumed anything in either our margins or our cash flow plan for the year as it relates to collection of those refunds. In terms of the go-forward piece of tariffs, the ruling removed the emergency tariffs.

[Company Representative 2] (Warby Parker): Hi, Dana. As it relates to tariffs, you're absolutely right, certainly volatile. The Supreme Court ruling from last week is pretty recent, we're still analyzing those impacts. When you think about that ruling, or you break it down to 2 pieces, first, there's the refunds on what we already paid for, the Supreme Court didn't really say anything specific regarding that, we're continuing to monitor that. We'll obviously take the necessary steps to preserve our rights as it relates to those refunds. We have not assumed anything in either our margins or our cash flow plan for the year as it relates to collection of those refunds. In terms of the go-forward piece of tariffs, the ruling removed the emergency tariffs.

As it relates to tariffs you're absolutely right certainly volatile.

The Supreme Court ruling from last week is pretty recent so we're still analyzing those impacts, but when you think about that ruling or you break it down into two pieces first there's the refunds on what we already paid for and Supreme Court didn't really say anything specific regarding that so we're continuing to monitor that will obviously take the necessary steps to preserve.

All of our rights as it relates to those refunds, we have not assumed anything in either our margins or cash flow plan for the year as it relates to the collection of those refunds.

And in terms of the go forward piece of tariffs.

The ruling removes the emergency tariffs however, pretty quickly the administration responded with a new global surcharge.

Josh: However, pretty quickly, the administration responded with a new global surcharge of 10%. They've indicated they're likely gonna move that up to 15%. Given all of that, we have not incorporated any sort of benefit into our 2026 guidance tied to that ruling. We do think that any benefit will largely be offset by the statutory changes to tariffs that the administration is currently exploring. With that being said, we are in a position to continue to be flexible and nimble, navigate the tariffs as we have in 2025.

[Company Representative 2] (Warby Parker): However, pretty quickly, the administration responded with a new global surcharge of 10%. They've indicated they're likely gonna move that up to 15%. Given all of that, we have not incorporated any sort of benefit into our 2026 guidance tied to that ruling. We do think that any benefit will largely be offset by the statutory changes to tariffs that the administration is currently exploring. With that being said, we are in a position to continue to be flexible and nimble, navigate the tariffs as we have in 2025.

10% and they have indicated they are likely going to move that up to 15%. So given all of that we have not incorporated any sort of benefit into our 2026 guidance tied to that ruling we do think that any benefit will largely be offset by the statutory changes to tariffs that the administration is currently exploring.

With that being said we are in a position to continue to be flexible and nimble navigate the tariffs as we have in 2025.

Paul Lejuez: Thank you.

[Analyst]: Thank you.

Thank you.

Operator: The next question will be from the line of Mark Altschwager with Baird. Please go ahead. Your line is open.

The next question will be from the line of Mark Ultra Mega with Baird. Please go ahead. Your line is open.

Mark Altschwager: Good morning. Thank you, and welcome, Adrian. Following up on the revenue guidance and the acceleration after Q1, you were clear that you're not incorporating any revenue from the smart glasses. Curious if you're making any assumptions regarding how the launch may impact traffic and conversion for the core business?

Good morning, Thank you and welcome Adrian.

Sure.

Following up on the revenue guidance and the acceleration. After Q1, you were clear that you're not incorporating any revenue from the smart glasses, but curious if you're making any assumptions regarding how the launch may impact traffic and conversion for the core business.

Josh: Thanks, Mark. We have not factored in a halo effect from the launch of AI glasses in our guidance.

[Company Representative 2] (Warby Parker): Thanks, Mark. We have not factored in a halo effect from the launch of AI glasses in our guidance.

Thanks Mark.

We are not anticipate.

We have not factored in a halo effect from the launch of AI glasses and in our guidance.

[Company Representative] (Warby Parker): Thank you for the welcome, Mark.

[Company Representative 1] (Warby Parker): Thank you for the welcome, Mark.

And thank you for the welcome Mark.

Mark Altschwager: Thank you. Then separately, more on the margin front, can you help us reconcile the acceleration in store openings with the dip you're seeing in active customers and the average retail productivity? Specifically, what are the other components that are enabling you to sustain the target four-wall profitability? Thank you.

Thank you.

Separately.

More on the margin front can you help us reconcile the acceleration in store openings with the dip youre seeing in active customers and the average retail productivity is specifically what are the other components that are enabling you to sustain the target four wall profitability. Thank you.

Josh: Within margin, in Q4, you know, one of the things that we've talked about all year is when you kinda look at our store fleet and you look at our gross margin as well as our non-marketing SG&A, one of the areas that we continue to experience leverage in is non-marketing SG&A. In Q4, non-marketing SG&A was up 200 basis points, and a piece of that obviously impacts our store fleet and our four-wall margins. Within Q4, we did experience a little bit of pressure around gross margins, very specifically related to certain impacts in Q4.

So within within March within margin in.

[Company Representative 2] (Warby Parker): Within margin, in Q4, you know, one of the things that we've talked about all year is when you kinda look at our store fleet and you look at our gross margin as well as our non-marketing SG&A, one of the areas that we continue to experience leverage in is non-marketing SG&A. In Q4, non-marketing SG&A was up 200 basis points, and a piece of that obviously impacts our store fleet and our four-wall margins. Within Q4, we did experience a little bit of pressure around gross margins, very specifically related to certain impacts in Q4.

In Q4.

You know one of the things that we've talked about all year is when you kind of look at our store fleet and you look at our gross margin as well as our non marketing SG&A.

One of the areas that we continue to.

Experienced leverage in his non marketing SG&A in Q4, non marketing SG&A was up 200 basis points.

And a piece of that obviously.

<unk>, our store fleet and our four wall margins.

Within Q4, we did experience a little bit of pressure around gross margins very specifically related to certain impacts in Q4, it had talked a little bit about the revenue.

Josh: Dave talked a little bit about the revenue cadence throughout the quarter that ultimately decelerated in the month of December, which allowed us little time to kinda make some adjustments, especially as it relates to doctor salaries, which, you know, is embedded in our gross margin, and we had staffed ahead of the holiday season. Those are very specific to kinda Q4 impacts. We expect kind of a normalized gross margin. As Adrian talked about, we expect gross margin in 2026 to be very much in line with 2025.

[Company Representative 2] (Warby Parker): Dave talked a little bit about the revenue cadence throughout the quarter that ultimately decelerated in the month of December, which allowed us little time to kinda make some adjustments, especially as it relates to doctor salaries, which, you know, is embedded in our gross margin, and we had staffed ahead of the holiday season. Those are very specific to kinda Q4 impacts. We expect kind of a normalized gross margin. As Adrian talked about, we expect gross margin in 2026 to be very much in line with 2025.

Cadence throughout the quarter that ultimately.

Decelerated in the month of December, which allowed us little time to kind of make some adjustments, especially as it relates to our doctor salaries.

<unk>.

You know is embedded in our gross margin and we had staff ahead of the holiday season. So those are very specific to kind of Q4 impact.

And we expect kind of a normalized gross margin as Adrian talked about we expect gross margin in 2026.

To be very much in line with 2025.

[Company Representative] (Warby Parker): Mark, if I could just also briefly build on Josh's point. We have pretty clear standards for our new store opening results. We look at payback period and four-wall margin, as you mentioned, but the reality is, like any retail company, there's gonna be a variety of performance as you look at individual stores. What we are very pleased with is the performance across the portfolio, as a lot of these new stores that are opening continue to mature.

[Company Representative 1] (Warby Parker): Mark, if I could just also briefly build on Josh's point. We have pretty clear standards for our new store opening results. We look at payback period and four-wall margin, as you mentioned, but the reality is, like any retail company, there's gonna be a variety of performance as you look at individual stores. What we are very pleased with is the performance across the portfolio, as a lot of these new stores that are opening continue to mature.

I'll get back to you is just awesome.

Phil on Josh is point, we have pretty clear standards for our new store opening results.

Look at payback period, and four wall margin as you mentioned, but the reality is like any retail company theres going to be a variety of performance X X as you look at individual stores, but what we are very pleased with is the performance across the portfolio as a lot of these new stores that are opening continue to mature.

Dave: I'd also just call out some of the channel dynamics.

[Company Representative 3] (Warby Parker): I'd also just call out some of the channel dynamics where, you know, e-com, you know, continues to be an evolving part of our business, in particular, with the sunsetting of our Home Try-On program. This is our first quarter without that offering. We are seeing, you know, Home Try-On historically, we've seen the strongest volumes in Q1. In this period, where we anticipated that we would be able to drive, you know, significant portion of those Home Try-On customers to our stores, that have been impacted by weather.

I would also just call out some of the channel dynamics.

[Company Representative] (Warby Parker): ... where, you know, e-com, you know, continues to be an evolving part of our business, in particular, with the sunsetting of our Home Try-On program. This is our first quarter without that offering. We are seeing, you know, Home Try-On historically, we've seen the strongest volumes in Q1. In this period, where we anticipated that we would be able to drive, you know, significant portion of those Home Try-On customers to our stores, that have been impacted by weather. We're seeing, you know, some speed bumps to that plan, but remain confident that we'll be able to serve those customers effectively.

Where E com.

<unk> continues to be an evolving part of our business in particular with the sunsetting of our home try on program. This is our first.

Quarter without that that offering.

And we are seeing.

I'm try on historically.

We've seen the strongest volumes in Q1.

And in this period.

Where we anticipated that we would be able to drive.

A significant portion of those <unk> customers to our stores that had been impacted by weather.

[Company Representative 3] (Warby Parker): We're seeing, you know, some speed bumps to that plan, but remain confident that we'll be able to serve those customers effectively. If, kind of you isolate, the performance of our retail stores, we continue to see very healthy dynamics in terms of customer generation, you know, overall growth and profitability, as we would expect, and that gives us the confidence to continue to invest and accelerate our store rollout plans.

We're seeing.

Some some speed bumps.

To that plan, but remain confident that.

We will be able to serve those customers effectively and it kind of isolate the performance of our.

[Company Representative] (Warby Parker): If, kind of you isolate, the performance of our retail stores, we continue to see very healthy dynamics in terms of customer generation, you know, overall growth and profitability, as we would expect, and that gives us the confidence to continue to invest and accelerate our store rollout plans.

Our retail stores, we continue to see very healthy dynamic in terms of customer generation.

Overall growth and profitability as we would expect and that gives us confidence to continue to.

Invest in accelerating our store rollout plans.

Neil: Very helpful color. Thank you.

Mark Altschwager: Very helpful color. Thank you.

It's very helpful color. Thank you.

Operator: The next question today will be from the line of Oliver Chen with TD Cowen. Please go ahead. Your line is open.

The next question today will be from the line of Oliver Chen with Cowen. Please go ahead. Your line is open.

Oliver Chen: Hi, thanks a lot. Hi, Neil, David, and Adrian. Neil and David, as you know, from our Wharton days on the AI models, a lot of the large language models rely on unsupervised and supervised training models. A question about the LLM training and what might be proprietary to Gemini and Google versus how you're thinking about, what's unique to Warby Parker, and also on the AI frontier with glasses, what are your views on personalization and some unlock that will set you apart? Adrian, as we look at guidance going forward, what are your thoughts on units relative to traffic and other comp levers? What's incorporated in your guidance view? Thanks, gentlemen.

Alright, Thanks, a lot hi, Neil David and Adrian Neil and David as you know.

Our working days on the AI models, a lot of the large language models rely on unsupervised in supervised training models.

<unk> about the L O M training and what might be proprietary to Gemini and Google versus how you're thinking about what's unique to worthy of Parker.

And also on the AI frontier with classes what are your views on personalization and some unlocks that will set you apart.

Adrian as we look at guidance going forward, but what are your thoughts on units relative to traffic and other comp levers whats incorporated in your guidance here. Thanks gentlemen.

Neil: Thanks, Oliver. We're very excited about the transformation that will be happening within the optical industry over the next decades, particularly as we transition right from traditional eyewear to intelligent eyewear. We believe that Google is the best partner for us for a variety of reasons, including their AI leadership overall, and basically writing the research papers that all LLMs are based off of, but how they continue to innovate and, you know, lead with a product like Gemini. It's not just their work in AI that makes them a great partner for us, it's their suite of products that billions of people use every day, from Google Maps to Calendar to Chrome, to Gmail, to YouTube, and more. We don't plan to develop any of our own models.

[Company Representative 3] (Warby Parker): Thanks, Oliver. We're very excited about the transformation that will be happening within the optical industry over the next decades, particularly as we transition right from traditional eyewear to intelligent eyewear. We believe that Google is the best partner for us for a variety of reasons, including their AI leadership overall, and basically writing the research papers that all LLMs are based off of, but how they continue to innovate and, you know, lead with a product like Gemini. It's not just their work in AI that makes them a great partner for us, it's their suite of products that billions of people use every day, from Google Maps to Calendar to Chrome, to Gmail, to YouTube, and more. We don't plan to develop any of our own models.

Thanks Oliver.

We're very excited about the transformation that will be happening within the optical industry over the next decade, particularly as we transition away from traditional eyewear to intelligent eyewear and we believe that Google is the best partner for us for a very.

They have reasons, including their AI leadership overall and.

Yes.

Basically writing the research papers on that all L O and <unk> are based off of but how they continue to innovate and.

Lead with a product like Gemini, but it's not just their work in AI that makes them a great partner for us. It's their suite of products that billions of people use every day from Google maps to calendar to chrome to Gmail to Youtube and more so.

We don't plan to develop.

And we have our own models.

Neil: Where we'll continue to develop IP is around the eyewear itself, around fixing prescription lenses and fulfilling those. We'll ensure that, you know, the market and customer feedback that we get from being a vertically integrated brand, we're able to act on faster than everybody else. That's been a key part to our success, you know, over the last 16 years is to always be customer first, because we're engaging directly with our customers and patients every single day, and have the shortest feedback loop to our product development team, our design team, our supply chain teams, and more.

[Company Representative 3] (Warby Parker): Where we'll continue to develop IP is around the eyewear itself, around fixing prescription lenses and fulfilling those. We'll ensure that, you know, the market and customer feedback that we get from being a vertically integrated brand, we're able to act on faster than everybody else. That's been a key part to our success, you know, over the last 16 years is to always be customer first, because we're engaging directly with our customers and patients every single day, and have the shortest feedback loop to our product development team, our design team, our supply chain teams, and more.

Where we'll continue to develop IP is around the eyewear itself.

Around.

Fixing prescription lenses and fulfilling those.

And we'll ensure that.

The market and customer feedback that we get from being a vertically integrated brands, we're able to act on faster than everybody else and that's been a key part too.

Our success over the last 16 years is to always be customer first because we're engaging directly with the with our customers and patients every single day and have the shortest feedback loop.

Our product development team, our design team our supply chain teams and more.

[Company Representative] (Warby Parker): Good morning, Oliver. It's great to be with you. I would say that, as we look at the outlook for 2026, it starts with an important premise, that we have a very healthy brand proposition that will allow us to continue to outperform the market. The market this year is projected to be down low single digits, but again, we're committing ourselves to being up low double digits. Just to put in a little bit of perspective, we do expect to continue to see healthy levels of traffic, as well as conversion, both in stores and online. When I look at this business and we talk about driving success in 2026, 1 is clearly the number of points of distribution.

[Company Representative 1] (Warby Parker): Good morning, Oliver. It's great to be with you. I would say that, as we look at the outlook for 2026, it starts with an important premise, that we have a very healthy brand proposition that will allow us to continue to outperform the market. The market this year is projected to be down low single digits, but again, we're committing ourselves to being up low double digits. Just to put in a little bit of perspective, we do expect to continue to see healthy levels of traffic, as well as conversion, both in stores and online. When I look at this business and we talk about driving success in 2026, 1 is clearly the number of points of distribution.

Good morning, Oliver it's great to be with you I would say that as we look at the outlook for 2026. It starts with an important premise that we have a very healthy brand proposition that will allow us to continue to outperform the market. The market. This year is projected to be down low single digits, but again, we are committing ourselves to.

Being up.

Low double digits just to put in a little bit of perspective, we do expect to continue to see healthy levels of traffic as well as conversion both in stores and online, but when I can look at this business and we talk about driving success. In 2026, one is clearly the number of points of distribution. We believe that we have at least nine.

[Company Representative] (Warby Parker): You know, we believe that we have at least 900 stores on the horizon in a industry with over 45,000, we're opening 50 stores this year to reach more markets, more customers, and more communities. The second thing is when you look at the composition of our business in terms of spend in exams, contacts, and glasses relative to the industry, there are opportunities for us to more mirror the industry penetration, which actually provides real growth for us. We continue to see very healthy growth in exams. We continue to see healthy growth in progressives. When you think about how the industry spends, we think there's a lot of opportunity to begin to mirror those penetration levels. The innovation of this company is actually quite compelling. You think about new categories and new collections, we have a very healthy cadence of that innovation.

[Company Representative 1] (Warby Parker): You know, we believe that we have at least 900 stores on the horizon in a industry with over 45,000, we're opening 50 stores this year to reach more markets, more customers, and more communities. The second thing is when you look at the composition of our business in terms of spend in exams, contacts, and glasses relative to the industry, there are opportunities for us to more mirror the industry penetration, which actually provides real growth for us.

100 stores on the horizon in a industry with over 45000, but we're opening 50 stores this year to reach more markets more customers and more communities. The second thing is when you look at the composition of our business in terms of spend and exams contacts in glass is relative to the industry there are opportunities for us.

More mirror the industry penetration was actually provides real growth for us. We've continued to see very healthy growth in exams. We've continued to see healthy growth in progresses and so when you think about how the industry spends we think theres a lot of opportunity to begin to mirror those penetration levels. The innovation of this company is actually quite compelling you think.

[Company Representative 1] (Warby Parker): We continue to see very healthy growth in exams. We continue to see healthy growth in progressives. When you think about how the industry spends, we think there's a lot of opportunity to begin to mirror those penetration levels. The innovation of this company is actually quite compelling. You think about new categories and new collections, we have a very healthy cadence of that innovation.

New categories and new collections, we have a very healthy cadence of that innovation and as we spoke about a bit earlier sport and athletic is a new category for us or a new collection fourth that's in demand for customers that we've already spoken to and then obviously AIG classes has had a very healthy level of adoption and then the last thing I'll.

[Company Representative] (Warby Parker): As you know, we spoke about a bit earlier, sports and athletic is a new category for us or a new collection for us that's in demand for customers that we've already spoken to, obviously, AI glasses has had a very healthy level of adoption. The last thing I would say is really around price. We just have a healthy mix of balancing units, ASP, and growing our customer base, which is unlike what we see in the industry, which has really been driven by compounding price increases on a like-for-like basis.

[Company Representative 1] (Warby Parker): As you know, we spoke about a bit earlier, sports and athletic is a new category for us or a new collection for us that's in demand for customers that we've already spoken to, obviously, AI glasses has had a very healthy level of adoption. The last thing I would say is really around price. We just have a healthy mix of balancing units, ASP, and growing our customer base, which is unlike what we see in the industry, which has really been driven by compounding price increases on a like-for-like basis.When you think about the way that we drive price, we're very encouraged by what that can do for us as well as we think about the outlook for this year and beyond.

I'd say its really around price, we just had a healthy mix of balancing units ESP and growing our customer base, which is unlike what we've seen in the industry, which has really been driven by compounding price increases on a like for like basis. So when you think about the way that we drive price. We're very encouraged by what that can do for us is wireless.

Neil: When you think about the way that we drive price, we're very encouraged by what that can do for us as well as we think about the outlook for this year and beyond.

As we think about the outlook for this year and beyond.

Oliver Chen: Thank you. So helpful. There's one follow-up. We're getting questions from clients around parameters on timing. It's probably very dynamic regarding the AI glasses launch, and any thoughts you have on what you're testing in relation to a framework for timing. Thanks a lot. Best regards.

Thank you. So helpful. Just one follow up we're getting questions from clients around parameters on timing, it's probably very dynamic regarding the AI eyeglasses launch and any thoughts you have on.

What you're testing in relation to a framework for timing. Thanks, a lot best regards.

Dave: Yes, we can't share specifics at this moment, we are very excited by the progress that we're making on the product. We were out in the Bay Area earlier this week, meeting with some of the senior leaders at Google and Samsung and are just, yeah, really excited about the progress that we're making together and look forward to sharing more later this year. Yeah, for now, all we can say is that we're excited to introduce these to customers later in 2026.

[Company Representative 3] (Warby Parker): Yes, we can't share specifics at this moment, we are very excited by the progress that we're making on the product. We were out in the Bay Area earlier this week, meeting with some of the senior leaders at Google and Samsung and are just, yeah, really excited about the progress that we're making together and look forward to sharing more later this year. Yeah, for now, all we can say is that we're excited to introduce these to customers later in 2026.

Yes, we can't share specifics.

At this moment, but we are very excited by the progress that we're making on the product we were out and.

The area earlier this week meeting.

With some of the senior leaders.

At Google and Samsung and.

Just really excited.

About the progress that we're making together.

Forward to sharing more later this year, but yes.

For now all we can and we can say is that.

We're excited to introduce these to customers.

Later in 2026.

Oliver Chen: Thank you very much.

Thank you very much.

Operator: The last question we have time for today is from the line of Paul U.S. with Citi. Please go ahead. Your line is now open.

The last question, we have time for today is from the line of full U S. With Citi. Please go ahead. Your line is now open.

Paul Lejuez: Hey, thanks, guys. Welcome, Adrian. The active customer count grew at the slowest pace all year in the Q4. Curious if you think that, you know, customers are putting off purchases because of higher prices in the assortment? You think it's just more of a higher price issue across the retail environment, you know, maybe specific to the categories you called out, the weaker industry trends. I guess along those lines, maybe frame for us how you're thinking about that revenue growth for next year, for 2026. When we think about that increase in active customer accounts versus revenue per customer, if you could frame that for us, sort of what underpins your revenue guidance? Just second, I just want to clarity on what you're saying about the revenue assumed from the Google partnership.

Hey, Thanks, guys won't majoring.

The active customer count grew the slowest pace all year in the fourth quarter I'm.

Curious if you think that customers are putting off purchases because of higher prices in the assortment do you think it's more of a higher price issue across the retail environment, maybe it's specific to the categories you called out some weaker industry trends, but I guess, along those lines maybe frame for us how you're thinking about that revs.

<unk> growth.

For next year for 2006.

Paul Lejuez: When we think about that increase in active customer accounts versus revenue per customer, if you could frame that for us, sort of what underpins your revenue guidance? Just second, I just want to clarity on what you're saying about the revenue assumed from the Google partnership. Are you assuming that there's no incremental revenue, that any revenue that you receive would not be incremental to the business this year? Or are you saying at this point, you're kind of pretending like those glasses don't even hit the a ssortment, and so there will be zero revenue from Google Glass?

Think about that increase in active customer accounts versus revenue per customer. If you can frame that for us sort of what underpins your revenue guidance.

And then just secondly, I just wanted to clarity on what you're thinking about the revenue assumed from <unk>.

Google partnership or are you assuming that there is no incremental revenue.

Paul Lejuez: Are you assuming that there's no incremental revenue, that any revenue that you receive would not be incremental to the business this year? Or are you saying at this point, you're kind of pretending like those glasses don't even hit the assortment, and so there will be zero revenue from Google Glass?

Any revenue that you received would not be incremental.

To the business this year or are you, saying at this point kind of pretending like those glasses don't even hit the assortment and so there will be zero revenue from from Google glasses.

Neil: Thanks for your question. To answer your last question first, just to clarify, we have not included any incremental revenue through the sale of AI glasses in our guidance. We have included the expenses that we'll incur to prepare and launch this new category for us. We plan to share more around timing and projections later in the year. We do anticipate, right, with the launch, that there would be incremental revenue, but we're not baking it into our guidance.

[Company Representative 3] (Warby Parker): Thanks for your question. To answer your last question first, just to clarify, we have not included any incremental revenue through the sale of AI glasses in our guidance. We have included the expenses that we'll incur to prepare and launch this new category for us. We plan to share more around timing and projections later in the year. We do anticipate, right, with the launch, that there would be incremental revenue, but we're not baking it into our guidance.

Thanks for your question to answer your last question first.

Just to clarify we have not included any incremental revenue through the sale of a eyeglasses and in our guidance.

We have included.

The expenses that we'll incur to.

To prepare and launch this new category for us.

So.

We plan to share more around timing and projections or later later in the year.

But we.

We do.

We anticipate with the launch.

There would be incremental revenue, but when we're not baking it in to our guidance.

Dave: We're also not, you know, including any halo effect or, you know, anticipation of additional traffic, and, you know, sales drivers for the existing products in our business. We view that all as upsides, you know, once we do launch that product and believe that, you know, these will generate quite a bit of excitement, and drive people to our stores and our digital properties that will, you know, generate additional benefits. Again, right now we're just projecting the core business as it stands today.

[Company Representative 3] (Warby Parker): We're also not, you know, including any halo effect or, you know, anticipation of additional traffic, and, you know, sales drivers for the existing products in our business. We view that all as upsides, you know, once we do launch that product and believe that, you know, these will generate quite a bit of excitement, and drive people to our stores and our digital properties that will, you know, generate additional benefits. Again, right now we're just projecting the core business as it stands today.

We're also not including any halo effect or.

Station of additional traffic.

And sales drivers for the existing products and our business. So we view that as upside.

You know once we once we do launch that product in and believe that.

These these will generate quite a bit of excitement.

And drive people to our stores.

And our digital properties that will well.

<unk>.

Generate additional benefits, but again right.

Right now, we're just projecting that.

Corp business as it as it stands today.

Neil: To tackle your first question, I'll start and then kick it over to Adrian. We are seeing based on the category data, that some customers are putting off their purchases. Now, we are outperforming the market and gaining share, and that's both from a customer perspective, from a unit perspective, from a revenue perspective as well. One of our strengths has always been our pricing model and our $95 opening price point, including anti-reflective prescription lenses, is more competitive than ever because it's been that price now for 16 years as we've seen our competitors continue to take price.

[Company Representative 3] (Warby Parker): To tackle your first question, I'll start and then kick it over to Adrian. We are seeing based on the category data, that some customers are putting off their purchases. Now, we are outperforming the market and gaining share, and that's both from a customer perspective, from a unit perspective, from a revenue perspective as well. One of our strengths has always been our pricing model and our $95 opening price point, including anti-reflective prescription lenses, is more competitive than ever because it's been that price now for 16 years as we've seen our competitors continue to take price.

And then to tackle your first question I'll start and then kick it over to Adrian but.

Yeah.

We are seeing based on the category data.

That some customers are putting off their purchases now.

Now.

We are outperforming the market and gaining share.

And that's both from a customer perspective from a unit perspective.

Revenue perspective, as well one of our strengths has always been our pricing model and our 95 dollar opening price point, including anti reflective prescription lenses is more competitive than ever because it's been that price now for 16 years as well.

We've seen our competitors continue to take price and we think that this is one of the reasons why.

Neil: We think that this is one of the reasons why, you know, in this category that historically has been resilient, that is experiencing some volatility, that we continue to outperform our competitors in acquiring customers and driving units. We'll continue to be competitive there. We are seeing, as well as we're hearing from other folks within our category, but also people across the consumer and retail landscape, that the younger consumer in their twenties is behaving more cautiously and is under financial stress. So we're not surprised that, you know, the category is seeing this particular customer sort of pull back a bit.

[Company Representative 3] (Warby Parker): We think that this is one of the reasons why, you know, in this category that historically has been resilient, that is experiencing some volatility, that we continue to outperform our competitors in acquiring customers and driving units. We'll continue to be competitive there. We are seeing, as well as we're hearing from other folks within our category, but also people across the consumer and retail landscape, that the younger consumer in their twenties is behaving more cautiously and is under financial stress.

In.

This category that historically has been resilient that is experiencing some volatility that we continue to outperform our competitors.

In acquiring customers and driving units. So we will continue to be competitive there.

Seeing as.

As well as we're hearing from other folks within our category, but also people across the consumer and retail landscape that the younger consumer.

Their twenties.

Is.

Is behaving more cautiously.

Is under financial stress.

[Company Representative 3] (Warby Parker): So we're not surprised that, you know, the category is seeing this particular customer sort of pull back a bit. We again think we're best positioned, and we're going to continue to acquire customers, whether they're younger or whether they're older. One of the things that we see with our older customers is that drives progressive penetration, which helps drives ASP, gross margin, and contribution margin overall.

So.

Where.

I'm not surprised.

Yeah.

The category is seeing this this.

Particular customer sort of pull back a bit.

Neil: We again think we're best positioned, and we're going to continue to acquire customers, whether they're younger or whether they're older. One of the things that we see with our older customers is that drives progressive penetration, which helps drives ASP, gross margin, and contribution margin overall.

We again think we're that we're best positioned and where it's going to continue to acquire customers.

They're younger or whether they're older and one I think that we see our older customers without that drives.

Progressive penetration, which helps drive ASP and gross margin and contribution margin overall.

[Company Representative] (Warby Parker): Hi, Paul. I think Dave and Neil actually captured it quite well. Just to amplify the point, the way we think about it is units, ASP, and new customers. When you think about the expansion of 50 points of distribution, that's clearly a way to really reach out to more customers, where we know from our data that one of the biggest drivers of opportunity is to actually have a physical location nearby. What I love about this brand is the healthy view on ASP, which is heavily driven by mix. When you think about the sport and athletic introductions that we plan to have later this spring, what's really excited about that is it's at a healthier price point, but in terms of its price point, it's at great value. Those dimensions on mix really help us quite a bit.

[Company Representative 1] (Warby Parker): Hi, Paul. I think Dave and Neil actually captured it quite well. Just to amplify the point, the way we think about it is units, ASP, and new customers. When you think about the expansion of 50 points of distribution, that's clearly a way to really reach out to more customers, where we know from our data that one of the biggest drivers of opportunity is to actually have a physical location nearby. What I love about this brand is the healthy view on ASP, which is heavily driven by mix. When you think about the sport and athletic introductions that we plan to have later this spring, what's really excited about that is it's at a healthier price point, but in terms of its price point, it's at great value. Those dimensions on mix really help us quite a bit.

Hi, Paul I think David Neil actually captured it quite well just to amplify the point the way, we think about it as units Asps and new customers. When you think about the expansion of 50 points of distribution, that's clearly a way to really reach out to more customers, where we know from our data that one of the biggest drivers of opportunities.

We have a physical location nearby what I love about this brand is a healthy view on E. S. P, which is heavily driven by mix. So when you think about the sport and athletic introductions that we plan to have later this spring, which really excited about that is it's at a healthier price point, but in terms of its price point, it's at great value. So those.

The dimensions on mix really help us quite a bit and as we think about units, we're thinking about our existing comp stores that exist within the business and getting more and more customers from the neighborhood into those stores, but also in terms of units getting units through the new stores that we're opening as well as it progresses through its maturity curve. So just to kind of amplify what David Neal spoke about.

[Company Representative] (Warby Parker): As we think about units, we're thinking about our existing comp stores that exist within the business and getting more and more customers from the neighborhood into those stores, but also in terms of units, getting units through the new stores that we're opening, as well as it actually progresses through its maturity curve. Just to kind of amplify what Dave and Neil spoke about, we're focused on a number of initiatives for units. We have a healthy way to think about ASP, and we also have avenues for us in our omni-channel platform to get new customers, particularly with physical openings and points of distribution.

[Company Representative 1] (Warby Parker): As we think about units, we're thinking about our existing comp stores that exist within the business and getting more and more customers from the neighborhood into those stores, but also in terms of units, getting units through the new stores that we're opening, as well as it actually progresses through its maturity curve. Just to kind of amplify what Dave and Neil spoke about, we're focused on a number of initiatives for units. We have a healthy way to think about ASP, and we also have avenues for us in our omni-channel platform to get new customers, particularly with physical openings and points of distribution.

We're focused on a number of initiatives for units, we have a healthy way to think about ESP and we also have avenues for us in our omnichannel platform to get new customers, particularly with physical openings and points of distribution.

Yeah.

Neil: Thank you, guys. Good luck.

Paul Lejuez: Thank you, guys. Good luck.

Thank you guys. Good luck.

[Company Representative] (Warby Parker): Thank you. With that, we will conclude the Warby Parker Incorporated for Q 25 earnings conference call. Thank you to everyone who was able to join us on the call today. You may now disconnect your lines.

Operator: Thank you. With that, we will conclude the Warby Parker Incorporated for Q 25 earnings conference call. Thank you to everyone who was able to join us on the call today. You may now disconnect your lines.

Thank you with that we will conclude the will be Parker incorporated full $2 25 earnings conference call.

Thank you to everyone, who is able to join us on the call. Today you may now disconnect your lines.

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