Warby Parker 2025 Q1 Earnings Strong Performance as Net Income Surges 229.6%

Warby Parker (WRBY) reported its fiscal 2025 Q1 earnings on May 08th, 2025. The company returned to profitability, with net income reaching a record high for fiscal Q1 in the last five years. Warby Parker delivered adjusted EBITDA margin expansion, marking a nearly 200 basis points improvement. For 2025, the company revised its guidance with expectations of 13% to 15% net revenue growth and adjusted EBITDA of $91 million to $97 million. This reflects a more cautious outlook amid macroeconomic uncertainties.

Revenue

Warby Parker's total revenue for Q1 2025 grew by 11.9% to $223.78 million, compared to $200 million in Q1 2024. The eyewear segment contributed significantly, generating $210.84 million, while the vision care segment added $12.94 million, collectively driving overall revenue growth.

Earnings/Net Income

Warby Parker achieved positive earnings per share (EPS) of $0.03 in 2025 Q1, a substantial recovery from the $0.02 loss per share in Q1 2024. This marks a favorable shift in EPS performance.

Price Action

The stock price of Warby Parker has climbed 4.40% during the latest trading day, has edged up 0.85% during the most recent full trading week, and has climbed 7.30% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Warby Parker shares following a revenue increase and holding for 30 days has resulted in considerable losses. The backtest demonstrates a negative return of -65.02%, significantly underperforming the benchmark return of 27.81%. This approach experienced a sharp decline and faced a maximum drawdown of -82.31%. The Sharpe ratio stood at -0.41, indicating poor risk-adjusted returns, while volatility was notably high at 62.46%. The compound annual growth rate (CAGR) was -25.36%, further highlighting the strategy's lackluster performance over a five-year period.

CEO Commentary

"Our team delivered a strong start to 2025," said Neil Blumenthal, Co-Founder and Co-CEO of Warby Parker. The company opened 11 net new stores and exceeded profitability expectations while achieving the highest e-commerce growth since 2021. Blumenthal highlighted that they have experienced their seventh consecutive quarter of active customer growth, attributing this success to their brand strength and innovation. Dave Gilboa, Co-Founder and Co-CEO, emphasized leveraging their diversified supply chain and experienced team to continue capturing market share moving forward.

Guidance

For the full year 2025, Warby Parker revised its guidance, expecting net revenue between $869 million and $886 million, representing growth of approximately 13% to 15%. The adjusted EBITDA is anticipated to be between $91 million and $97 million, with an adjusted EBITDA margin of approximately 10.5% to 11.0%. The company remains on track to open 45 new stores, including five shop-in-shops at select Target locations in the second half of the year.

Additional News

Warby Parker has been actively expanding its retail footprint, with plans to open additional stores throughout 2025. This includes a notable partnership with Target, aiming to establish shop-in-shops at select locations. The collaboration is set to enhance Warby Parker's market presence and reach a broader customer base. Additionally, the company is focusing on digital innovation, leveraging artificial intelligence to improve customer experience and drive e-commerce growth. Warby Parker is committed to maintaining its competitive edge in a dynamic retail environment, capitalizing on its diversified supply chain and brand strength to sustain growth momentum.