NEW YORK—In an optimistic and upbeat two-hour webcast presentation, Warby Parker Inc. co-founders and top executives on Monday morning laid out their plans for strong growth, including expansion of the physical store base, their ongoing philanthropic efforts and the company’s planned evolution to a more “holistic” vision care company that drives a larger share of revenue from eye exams and contact lens sales. The investor presentation follow’s last month’s registration filing with the Securities and Exchange Commission for a direct listing of Warby Parker’s Class A shares, as VMAIL reported.

The executives, led by co-founders and co-CEOs Neil Blumenthal and Dave Gilboa, walked prospective investors through a range of performance metrics and company tactics that are designed to help it increase its estimated 1 percent to 2 percent share of the U.S. eyeglasses market. The executives noted that a third-party study estimated that Warby Parker could open up to 900 stores in the U.S. market as it continues to expand from 53 markets in the U.S. to more than 100 markets. (The presentation can be viewed on the Warby Parker website here.)

In its direct stock offering later this month (which means existing shareholders are selling their shares, and the company will not raise any money via the offering), about 77 million shares are expected to be part of the offering. The firm’s amended Form S-1 registration, filed late last week with the Securities and Exchange Commission, indicated that the company expects to begin trading on the NYSE on or about Wednesday, Sept. 29.

Warby Parker co-founders and co-CEOs Neil Blumenthal (l) and Dave Gilboa during the investor presentation webcast.
The amended filing also noted that during the first half of this year about 2.0 million shares were sold in private transactions at a price of $24.53. If the company listed its shares at that price, Warby Parker would command a fully diluted market value of $2.9 billion, according to a news report about the offering.
VMAIL reported on the initial SEC filing. That filing showed the company reporting 2020 sales of $393.7 million and a net loss of $55.9 million.
The company had 142 U.S. stores as of the end of its second quarter in June (and three in Canada), and it estimated there are about 41,000 optical outlets currently operating across the U.S. Warby Parker expects to open up to 35 new stores this year, the executives said.

Warby Parker's filing noted that it will become "a public benefit corporation," which means that it is “focused on positively impacting all stakeholders” as opposed to merely shareholders. And the company has various charitable intentions through a foundation and donation model of giving away eyewear when customers purchase their own set.
“This is a bigger stage for Warby Parker, and the larger the stage, the more people we impact,” co-CEO Blumenthal said in the webcast, responding in a prerecorded Q&A session with the company’s investor relations director. “That’s what motivates us every single day.”

"What's exciting is that as the business gets bigger, we continue to uncover bigger opportunities for us to have an impact and those opportunities span every aspect of our business, from scaling our customer base to the products and services we offer," Gilboa added. He noted, too, that he believes Warby Parker has more opportunity in improving the ways it engages with customers, "opening lots more retail stores, investing in pioneering technology," such as telemedicine or virtual try-on, and by improving its buy-a-pair, give-a-pair program. "It's really those opportunities that continue to motivate us and continue to ensure that we have as much excitement today as we did when we started this business over 11 years ago," he said.

“We are a half-billion dollar company today, growing at 33 percent,” added chief financial officer Steve Miller. “And yet we all feel like we are just getting started. …. I also think that going public will create a really interesting platform that we can use to amplify our do-good efforts…. We talked a lot about evolving into a holistic vision care company and doing that will really enable us to serve our customers in a more holistic way by providing exams and contacts, and not just eyeglasses.”
Miller noted that the U.S. optical industry is valued at roughly $35 billion, and Warby Parker represents just 1 percent of this market today. “We've proven we have the ability to address this entire market, given our product quality and value proposition,” he added.

“We've maintained a best-in-class [net promoter score] score of above 80, while the industry average hovers around 30.… and our unaided brand awareness remains low, at 13 percent. And, as of June 30, we operated just 145 optical stores, out of the 41,000 that exist in the U.S. today. Together, these metrics underscored tremendous room for future growth,” he said.

Miller said Warby Parker maintains a “healthy gross margin rate of approximately 60 percent,” and that on an adjusted EBITDA basis the company has been profitable in 2018, 2019 and 2020. He said the company has average sales of $2,900 per retail square foot and that new stores become profitable in about 20 months after opening.
Another growth area is the evolution to a holistic vision care company, Miller said, noting that 95 percent of Warby’s business today is eyeglasses.  “As we become a holistic vision care company, we see massive growth opportunities, particularly as it relates to contact lenses and eye exams. Contact lenses are a $5 billion plus market, and generally account for 15 percent to 20 percent of an optical retailer’s sales.” For Warby, contacts represent about 2 percent of sales, he added.
Eye exams also comprise a $5 billion-plus market and represent just 1 percent of Warby’s business today, he said. “We recognize eye exam revenue in the stores where we directly employ the eye doctor. And today that is just 37 of our retail locations. We know that roughly 70 percent  of eyeglasses were purchased at the same place individuals receive an eye exam.   … We see significant growth opportunities as customers who purchase eye exams, glasses, and contacts are significantly more valuable over time.”