A customer tries on glasses at a Warby Parker store in Los Angeles.
Michael Buckner | Getty Images
Shares of Warby Parker sank in pre-market trading Thursday after the eyewear retailer reported continuing losses and said its sales were hit during the holiday quarter due to the omicron variant of Covid-19, which kept people out of stores.
The company also released a weaker-than-expected forecast for 2022 sales. Warby Parker sees annual revenue in the range of $650 to $660 million. According to Refinitiv data, analysts were looking for $687.7 million.
Management said omicron’s effects led to a loss of nearly $5 million in sales in the fourth quarter, and lost more than $15 million in the first quarter, as fewer customers came in for eye exams and to try new glasses early. January.
The stock recently fell about 15%. It fell even more once the company started a phone call with analysts, following its quarterly financial report. As of the market close on Wednesday, Warby Parker’s shares are down more than 42% this year.
Warby Parker booked a net loss for the three months ended Dec. 31 of $45.9 million, or 41 cents a share, compared to a loss of $4.3 million, or 8 cents a share, a year earlier. She attributed the broader losses to a $31.6 million increase in stock-based compensation expense and other related employer payroll taxes.
Revenue grew to $132.9 million from $112.8 million a year earlier.
Warby Parker blamed the prevalence of the omicron variant for hurting sales in the final weeks of December, which coincided with typical peak demand in the optics industry as consumers use flexible final spending dollars ahead of the New Year.
Analysts had expected Warby Parker to report $133 million in sales in the fourth quarter versus a loss of 9 cents a share, according to Refinitiv data.
One bright spot though, was that people who visited Warby Parker were spending more money overall. The company said average revenue per customer increased 13% year-over-year to $246.
Co-founder and co-CEO Dave Gilboa described Warby Parker’s recent challenges as a “temporary setback.” In recent weeks, the company has experienced a recovery curve, he told analysts on a conference call.
“We remain as confident as ever in our long-term growth plan in re-accelerating our growth in the coming months,” he said.
Warby Parker said it expects its brick-and-mortar sites to return to 100% productivity before the end of the year. Last year, it opened 35 stores, ending in 2021, with 161 locations. In 2022, it expects to open another 40 locations.
The company also has a virtual trial option available on its website for customers to see what the different glasses might look like on their faces. Warby said this was a competitive advantage when store sales slumped.
In 2021, Warby Parker’s e-commerce sales represented 46% of total revenue, down slightly from 50% in 2020, but up from 35% in 2019.
Find the full earnings press release from Warby Parker here.