Warby Parker’s 2026 Guidance and AI Glasses Timeline Clash in Earnings Call Contradictions

Date of Call: Feb 26, 2026

Financials Results

• Revenue: Q4: $212M, up 11.2% YOY. Full year: $871.9M, up 13% YOY.
• Gross Margin: Q4 adjusted gross margin: 52.5%, 170 basis points below last year. Full year adjusted gross margin: 54.4%, down 110 basis points.
• Operating Margin: Q4 adjusted EBITDA margin: 7.2%, 10 basis points below last year. Full year adjusted EBITDA margin: 11.6% (calculated from $95M EBITDA on $871.9M revenue).

Guidance:

• Full year 2026 revenue guided to $959M to $976M, representing 10% to 12% YOY growth.
• Full year adjusted EBITDA guided to $117M to $119M, representing 12.2% margin and 130 basis points of expansion YOY.
• Q1 2026 revenue guided to $238M to $240M, representing 6.5% to 7.5% YOY growth.
• Q1 adjusted EBITDA guided to $27M to $28M, with a margin of approximately 11.5% at the midpoint.
• Guidance excludes any revenue from AI glasses but includes operating expenses for the launch.
• Marketing spend expected to remain in the low teens as a percent of revenue.

Business Commentary:

Revenue Growth and Market Share:

• Warby Parker Inc. reported 13% revenue growth for fiscal 2025, with double-digit revenue growth each quarter.
• The company achieved its first full year of net income profitability and reported $44 million in free cash flow.
• This growth was driven by 47 new store openings, high single-digit customer growth, and mid-single-digit average revenue per customer growth, reflecting continued market share gains.

Impact of Tariffs and Pricing Strategy:

• The company mitigated the impact of tariffs while maintaining its value proposition, keeping prices stable on the majority of offerings, including $95 prescription glasses.
• Tariffs led to a 170 basis points decrease in adjusted gross margin in Q4.
• The strategy of maintaining competitive pricing helped in gaining market share despite industry-wide price increases.

E-commerce and Omnichannel Challenges:

• E-commerce revenue grew only 1.6% year-over-year in Q4, facing a high single-digit headwind from sunsetting the Home Try-On program.
• Softer retail traffic and contact lens growth slowed, impacting e-commerce.
• The company plans to drive e-commerce growth through personalization and customer experience enhancements.

2026 Strategic Priorities and AI Glasses Launch:

• Warby Parker plans to open 50 new stores in 2026 and introduce AI glasses in partnership with Google and Samsung.
• The company aims to deliver low double-digit revenue growth and 130 basis points of adjusted EBITDA margin expansion in 2026.
• The strategic focus is on scaling omnichannel presence, increasing insurance penetration, and leveraging AI across operations to drive productivity and enhance customer experience.

Sentiment Analysis:

Overall Tone: Neutral

• Management expressed confidence in the long-term strategy and market position, noting '2026 is an important year for us, and we believe we remain uniquely positioned to continue delivering strong growth and market share gains.' However, the tone was cautious regarding near-term macro conditions and weather impacts, stating 'we are planning conservatively for the near term given recent trends' and acknowledging 'we are not immune to those impacts' from winter weather.

Q&A:

• Question from Brooke Roach (Goldman Sachs): Can you elaborate on the softness that you're seeing with your younger customer? Are you losing share with that age cohort or is that simply a function of the broader industry pressure? And what actions are you taking to shore up this part of the business in 2026?
  Response: Softness reflects broader category pressure, particularly on younger and lower-income consumers. Actions include adding media spend on digital channels and expanding efforts to help customers use vision insurance benefits, including rolling out a reimbursement pilot.

• Question from Brooke Roach (Goldman Sachs): Neil, you spoke in the prepared remarks about supply chain readiness for the upcoming launch of AI glasses. Can you speak to the unit capacity that you're preparing for in launch here? And how quickly you might be able to scale the supply chain should demand follow a similar cadence of growth as the broader industry?
  Response: Warby Parker's vertically integrated supply chain and existing optical lab capacity position it to respond to demand. The company is investing in labs and store readiness to ensure scalability, with a team experienced in serving high-volume stores.

• Question from Dana Telsey (Telsey Advisory Group): How are you thinking about growth rates going forward? And I noticed you're opening 50 stores this year, including the 5 Targets. How are those Target shop-in-shops doing? What is the learnings? And how are you thinking about tariffs, given the volatility that's currently going on? And what pricing looks like for 2026?
  Response: Growth is expected to accelerate after a soft Q1 impacted by weather. Target shop-in-shops are in a test phase, showing higher progressive penetration and new customer acquisition. Tariffs remain volatile; the company is not assuming any benefit in guidance and is preparing to navigate changes.

• Question from Mark Altschwager (Robert W. Baird): Following up on the revenue guidance and the acceleration after Q1, you were clear that you're not incorporating any revenue from the smart glasses. But curious if you're making any assumptions regarding how the launch may impact traffic and conversion for the core business.
  Response: No halo effect from AI glasses launch is factored into the guidance.

• Question from Mark Altschwager (Robert W. Baird): Can you help us reconcile the acceleration in store openings with the dip you're seeing in active customers and the average retail productivity? Specifically, what are the other components that are enabling you to sustain the target 4-wall profitability?
  Response: New store openings meet strict payback and margin criteria. Q4 gross margin pressure was due to specific timing impacts (e.g., doctor salaries). The company sees healthy retail growth in normal weather periods and confidence in continued unit and customer growth.

• Question from Oliver Chen (TD Cowen): A question about the LLM training and what might be proprietary to Gemini and Google versus how you're thinking about what's unique to Warby Parker? And also on the AI front here with glasses, what are your views on personalization and some unlock that will set you apart?
  Response: Warby Parker is not developing its own LLMs but will leverage Google's AI for glasses. The company's proprietary IP will focus on eyewear design and prescription lens technology, with customer feedback loops driving innovation.

• Question from Oliver Chen (TD Cowen): As we look at guidance going forward, what are your thoughts on units relative to traffic and other comp levers? What's incorporated in your guidance view?
  Response: Guidance is based on driving units through store expansion, balancing ASP via mix (e.g., new sports category), acquiring new customers, and leveraging omnichannel capabilities, all while outperforming the projected declining market.

• Question from Paul Lejuez (Citigroup): The active customer count grew at the slowest pace all year in the fourth quarter. Curious if you think that customers are putting off purchases because of higher prices in the assortment. And maybe frame how you're thinking about that revenue growth for next year, when we think about that increase in active customer counts versus revenue per customer.
  Response: Some customers are delaying purchases due to category volatility and financial caution, especially among younger consumers. Revenue growth for 2026 is underpinned by unit growth, ASP driven by mix, new customer acquisition via store expansion, and strategic category additions like sport glasses.

• Question from Paul Lejuez (Citigroup): Just second, I just want clarity on the -- what you're saying about the revenue assumed from the Google partnership. Are you assuming that there's no incremental revenue? That any revenue that you receive would not be incremental to the business this year? Or are you saying at this point, you're kind of pretending like those glasses don't even hit the assortment and so there will be 0 revenue from Google glasses?
  Response: Guidance excludes any incremental revenue from AI glasses sales but includes the related operating expenses. Any revenue from the launch is viewed as upside and not factored into the current outlook.

Contradiction Point 1

Growth Outlook and Guidance Specificity

Guidance for 2026 growth is presented with differing levels of specificity and confidence.

Can you comment on the company's Q4 earnings performance? - Dana Telsey (Telsey Advisory Group)

2025Q4: They are committed to low double-digit revenue growth for the full year. - Neil Blumenthal(CEO)

How are you thinking about growth rates going forward, including the performance of Target shop-in-shops, and what is the outlook for tariffs and pricing in 2026? - Mark Altschwager (Robert W. Baird & Co. Incorporated)

2025Q3: High growth for next year and beyond is anticipated despite near-term volatility. - Neil Blumenthal(CEO)

Contradiction Point 2

AI Glasses Launch Timeline and Details

The level of detail and certainty regarding the AI glasses launch timeline contrasts significantly.

Oliver Chen (TD Cowen) - Oliver Chen (TD Cowen)

2025Q4: No specific timing details can be shared at this moment. They are excited about product progress and are working with Google and Samsung, with more information expected later in 2026. - David Gilboa(CFO)

Can you provide an update on the timeline for the AI glasses launch? - Matt Koranda (ROTH Capital Partners, LLC)

2025Q3: Partnerships with Google and Samsung are advancing. More details will be shared in the coming months, but the company is excited about this new product category and its potential. - Neil Blumenthal(CEO)

Contradiction Point 3

Impact of Selective Price Increases on Customer Behavior

Contradictory statements on whether price increases negatively impacted younger customer cohorts.

Paul Lejuez (Citigroup) - Paul Lejuez (Citigroup)

2025Q4: Category data shows some customers are delaying purchases, which is impacting younger consumers more. - David Gilboa(CPO)

Are customers delaying purchases due to higher prices, and how does this impact your 2026 revenue growth guidance? - Dana Telsey (Telsey Advisory Group)

2025Q2: The first selective price increases in 15 years had minimal impact on conversion and mix, with some stronger uptake on higher-value lens upgrades. - Steve Miller(CFO)

Contradiction Point 4

Revenue Contribution Assumption from AI Glasses Partnership

Contradiction on whether AI glasses revenue is included in the company's formal financial guidance.

Paul Lejuez (Citigroup) - Paul Lejuez (Citigroup)

2025Q4: The 2026 guidance does not include any incremental revenue from AI glasses sales. - David Gilboa(CPO)

Are customers delaying purchases due to higher prices impacting your 2026 revenue growth guidance, and what is the revenue assumption from the Google partnership? - Dana Telsey (Telsey Advisory Group)

2025Q2: The Google partnership leverages Warby’s product design and eye care expertise with Google’s AI and software... seen as a massive new opportunity, - David Gilboa(CPO)

Contradiction Point 5

Insurance Partnership Utilization Timeline

Inconsistent projections for when the insurance partnership will significantly boost revenue.

What factors are driving revenue growth in the current quarter? - Brooke Roach (Goldman Sachs)

2025Q4: They are rolling out a nationwide reimbursement pilot for out-of-network benefits. - David Gilboa(CEO)

How would you characterize the softness in younger customer demand—is this due to lost market share or broader industry trends—and what specific actions are planned for 2026 to address this segment? - Janine Stichter (BTIG)

2025Q1: Progress is positive with the Versant integration, though utilization is still low among members. The partnership is viewed as a multiyear tailwind that will ramp over time. - Dave Gilboa(CEO)