Warby Parker Shares Surge Despite Cutting Full-Year Outlook

© Reuters Warby Parker (WRBY) Shares Surge Despite Cutting Full-Year Outlook

By Sam Boughedda

Warby Parker Inc (NYSE:WRBY) shares jumped more than 29% to levels not seen since June in early Thursday trading after the company reported second-quarter earnings topping analyst expectations.

The online eyewear retailer reported a second-quarter loss of $0.01 per share, $0.01 better than the analyst estimate for a loss of $0.02. Revenue for the quarter came in at $149.6 million versus the consensus estimate of $149.5 million. Revenue increased 13.7% during the quarter.

Furthermore, active customers increased 8.7% to 2.26 million, with the average revenue per customer increasing 8.2% year over year to $254.

"Q2 was another quarter where Warby Parker made strong progress against our core strategic growth initiatives, gained market share, and delighted customers despite shifts in consumer spending," said Co-Founder and Co-CEO Neil Blumenthal.

Looking ahead, the company slashed its outlook for the year. It sees full-year 2022 revenue between $584 million and $595 million, below the consensus of $640.8 million.

Following the report, a Goldman Sachs analyst told investors in a research note: "On balance, while we are encouraged by the 2Q revenue delivery in line with expectations, we view today's updated guidance outlook as disappointing. Our conversations with investors ahead of the print suggested that a full year guidance cut for both sales and EBITDA was expected, though we believe the magnitude of the reduction to full year revenue embedded in today's guide (which implies 2H revenue growth of only ~6% despite a significantly larger store base and initiatives to improve productivity) is below buyside expectations."

In addition, a Telsey analyst, who has an Outperform rating and a $30 price target on the stock, said: "The moderation in the annual outlook was not unexpected, in our view, given the macro and inflationary headwinds impacting both the company and its consumer, and we believe the company's more cautious outlook is prudent as management rationalizes the expense structure to help navigate this challenging operating environment."

The analyst added that she sees the company benefitting from "sustainable profit growth" given strong customer trends and its vertically integrated model.