NEW YORK—Warby Parker Inc. (NYSE: WRBY) issued its first quarterly results since going public via a direct listing on the NYSE earlier this year for the three-month and nine-month period ended Sept. 30. The company reported its net revenue increased 32 percent to $137.4 million for the period and that its active customers increased 23 percent for the quarter to 2.15 million. It noted that net revenue for the third quarter of 2021 increased 45 percent compared to the third quarter of 2019.

The company also said higher selling, general and administrative (SG&A) expenses increased $66.3 million to $171.6 million, primarily driven by $65.0 million in stock-based compensation expense, $23.9 million in direct listing expenses, and $7.8 million in expense from a stock donation to the Warby Parker Impact Foundation. As a result, Warby  Parker's net losses for the third quarter increased to $91.1 million. Adjusted EBITDA for the quarter rose 106 percent to $11.2 million.  Nine new stores opened during the quarter, bringing year-to-date openings to 28, and the company ended the quarter with 154 stores. 

Co-founder and co-CEO Dave Gilboa said, "Every day, we strive to design high-quality products, deliver remarkable customer experiences, and develop innovative technologies that help the world see. Our strong third quarter results reflect our commitment to achieving these goals while delivering ambitious, long-term sustainable growth.” 

“We’re incredibly proud of the milestones we achieved in Q3, from opening our second optical lab to going public via a direct listing—and being the first public benefit corporation to do so,” added co-founder and Co-CEO Neil Blumenthal. “As we look ahead, we remain laser focused on executing against our growth strategies by increasing our active customer base, expanding our retail footprint, and delivering innovative products and services that further our mission to inspire and impact the world with vision, purpose and style.”

CFO Steve Miller said, “Our financial model remains grounded in steady active customer growth, consistent customer retention, and compelling customer economics, which we believe provides the framework for sustainable growth with increasing profitability for years to come.”

On a call with financial analysts, Gilboa said, "We have seen progressives make up a larger percentage of our overall unit mix each quarter since we reopened stores in 2020. Progressives make up nearly half of the optical market but less than 20 percent of our optical business. As we tackle this white space in front of us, we expect we will continue to see gross margin leverage since progressives are a higher margin product category."

Gilboa also said that to support the expansion of Warby's eyeglasses business, the company has opened its second optical lab in the U.S, during the quarter, a new 69,000 square foot facility in Las Vegas. The company  opened its first optical lab in Sloatsburg, New York in 2017, which has expanded to a 52,000 square foot facility with a team of more than 120. 

Gilboa said, "We believe this new facility will give us the power to increase our production and shipping capabilities, scale our in-house manufacturing processes, and more efficiently serve our West Coast customers. The deliberate investments we've made in our supply chain and in house optical labs enable us to maintain the highest quality standards, exceed customer delivery expectations while also more effectively navigating challenging and dynamic environments like the one we're seeing today.

"Orders produced and shipped from our own labs have faster turnaround times, lower return rates, higher margins, and result in higher NPS scores. We are working to offer a holistic and seamless vision care experience for all of our customers and patients."

Gilboa noted that Warby Parker saw "strong customer response to our contact lens offering throughout the quarter, even though contacts make up only 5 percent of our business. As we look to the future, we see a significant opportunity to scale this part of our business to attract new customers to Warby Parker, and to sell contacts or existing glasses customers.

"We also see significant opportunities in scaling our eye exam and vision testing offerings. We now have 99 stores with doctors where customers can get a comprehensive eye exam, up from 49 stores with doctors as of Q3 2019. And we expect this number to grow significantly in the coming quarters and years."

Executives also pointed to increased investment in telehealth and its potential and increased access to vision tests across the company's customer base. "We plan to introduce new features to continue to enhance the customer experience in the coming months. And now on to our fourth growth strategy driving brand awareness," Gilboa said. 

"We leverage a number of approaches to increase brand awareness and attract new customers from unique collaborations and partnerships to creative TV campaigns to ensuring every one of our customers has a remarkable customer experience. Our customers remain our best marketing channel. To this day more than half of our customers learn about us via word of mouth."

Warby Parker ended the third quarter 2021 with $266.2 million in cash and cash equivalents.

For the fiscal year 2021, Warby Parker now expects net revenue of $539.5 million to $542.0 million, representing growth of 37 percent to 38 percent versus fiscal year 2020 and growth of 46 percent versus fiscal year 2019. It expects adjusted EBITDA margin of approximately 4 percent to 5 percent and, with an additional 35 new store openings planned, its store count will be 161 by year-end.