Warby Parker co-CEO: Contacts business seeing 'massive growth'

Warby Parker shares (WRBY) move higher into positive territory Thursday morning after the company raised its full-year guidance as its e-commerce sales grew. The eyeglass retailer posted mixed second quarter results of $188.2 million in revenue ($187.1 million expected) and an adjusted loss of $0.06 per share (a loss of $0.05 was expected).

Warby Parker Co-founder and co-CEO Dave Gilboa joins Wealth! to give insight into the company's performance and the state of the consumer.

"There's no question that many consumers are feeling pinched and are being more thoughtful around where they're spending dollars," Gilboa says, who notes "massive growth" in consumer spending around contact lenses.

"We know that around 40% of our glasses customers wear contacts, and it was the most requested item before we offered it, people wanted to buy a glasses and contacts at the same time, and now we offer that. And we're seeing really rapid growth, contacts growing around 40% year-over-year and are excited to continue to scale that business as more people are perhaps even trying to look or lean into their insurance," Gilboa highlights.

He comments on the growing acceptance of vision insurance from customers: "So we've been working on expanding our insurance coverage. We're in network with UnitedHealth (UNH), and we announced earlier this year that we're adding all Versant Health members will be able to use their in-network benefits at Warby Parker, and that integration is underway."

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This post was written by Nicholas Jacobino

Video Transcript

Warby Parker shares in the Green after the Eyeglass retailer raised its full year guidance as active consumers, those customers continue to spend online to discuss.

We've got with us Dave Gilboa, who is the co founder and co CEO of Warby Parker.

Dave.

Great to check in with you.

And thanks for taking the time here today on the back of this earnings report here, I mean, net revenue up 13% active customers up 4.5% take us into the consumer as you see them through the Warby Parker lens right now.

Yeah, thanks for having me on and, and we're proud of uh our Q two results and the progress that we've made so far.

Uh This year, we really um set out to accelerate um our active customer growth which we've now uh done for straight quarters.

Uh We've seen uh our ecommerce business return to growth um with Q two being the fastest quarterly growth since the beginning of 2021 um and are making progress against um our long term strategic initiatives.

Um There's no question that uh many consumers are, are feeling uh pinched and um and, and are being more thoughtful around where they're spending dollars.

Uh We feel fortunate that we serve uh mainly high income uh segment.

So our average uh household income is over $100,000.

Um and we sell products that, that people need to see.

Um And so we're seeing a more intentional consumer uh where a higher percentage of our customers are starting with an eye exam and then, and then buying glasses versus uh kind of casually shopping and, and coming in with bags from lots of other stores.

Uh But we're encouraged by the progress that we're seeing in our business and our ability to serve our patients and customers.

And when you think about the retention of that higher end consumer, I mean, how many engagements uh are you typically seeing with them over time?

Um Yeah.

So, uh we find that uh once someone uh shops with Warby Parker, they uh tend to love the experience and they tend to come back over time.

And so, uh we've seen very consistent uh retention metrics across cohorts.

Uh We tend to see that um if someone buys uh uh they, they tend to, to come back and, and um spend as much uh in that initial purchase uh with us over over the next few years.

Um Now buying a pair of glasses or getting an exam is not something that uh most people um uh undergo uh every every month or every quarter.

Uh But we do see, uh our customers coming back year after year, we, we've seen some considerable movements in, in vision insurance.

I wonder from Warby Parker, how you're seeing customers really lean into making sure that they have that vision insurance that is able to offset some of what their expenses would be out of pocket typically with Warby Parker and, and what that means for the company and its own financial performance.

Yes.

So, uh we've really focused on being able to deliver great value um whether uh our customers are paying out of pocket or using insurance benefits.

Um But uh we want our customers dollars to go as far as possible.

And so we've been working on expanding our insurance coverage.

Um We're in network uh with uh United Health and we announced earlier this year that we're adding um all uh ver um Verant Health, uh uh uh uh um members will be able to use their in-network benefits at Warby Parker and that integration is underway.

Um We've also been focused on um serving out of network customers, uh even even better.

And uh if you go to Warby parker.com backslash insurance, uh you can just enter your name, your birth date, um and uh your zip code and uh we'll tell you what your insurance benefits are and, and how to use them um at or B just lastly while we have you here, you of course, do the ever popular frames, but you also do a and of course tests, but you also do contact lenses as well here.

You know, what are you seeing in the performance of that business?

I mean, we know that it's been one of the elements to try and really diversify the strategy for Warby Parker over the years.

Yeah, so we've seen massive growth in our contacts business.

Um We know that around 40% of our glasses, customers wear contacts and uh it was the most requested item before we offered it.

Um people um wanted to uh buy glasses and contacts at, at the same time and now we offer that um and we're seeing really rapid growth um uh contacts uh growing around uh 40% year over year and uh are excited to continue to scale that business as as more people are perhaps even trying to look or lean into their insurance and see if they're covered by, you know, LASIK or any other eye surgeries.

You know, is that a, is that a headwind risk that you're seeing become elevated at Warby Parker?

This is a, a category that has a lot of durability.

Uh We sell products that that people need to see.

Um and if anything, the incidence of refractive error and the need for for glasses and contacts is only increasing.

Um And so, uh we remain highly in, in uh the the long term uh durability of of the category and, and the need for the products that, that we sell every day.

Certainly, Dave gobo.

Great to see you.

Good to check in with you.

Warby Parker, co founder and CEO.

Tell Dave, we say hello to.

Yeah, Dave, thanks so much.