Warby Parker’s HTO Headwind Timeline and AI Glasses Revenue Guidance Don’t Match in 2026 Earnings Calls

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $235.5 million, up 9.8% YOY
• Gross Margin: Adjusted gross margin of 50.0%, up 8.1 percentage points YOY, driven by a 380 basis point benefit from tariff refunds
• Operating Margin: Adjusted EBITDA margin of 14.0%, up 230 basis points YOY

Guidance:

• Full-year revenue guidance reaffirmed at $959 to $976 million, representing approximately 10% to 12% YOY growth.
• Full-year adjusted EBITDA guidance reaffirmed at $117 to $119 million, representing year-over-year expansion.
• Q3 revenue guidance of $243 to $246 million.
• Q3 adjusted EBITDA guidance of $26 to $28 million, representing approximately 10% growth and an adjusted EBITDA margin of approximately 11% at the midpoint.
• Expects home try-on headwind to fully abate by 2027 and improved e-commerce trends thereafter.

Business Commentary:

Revenue and Earnings Performance:

• Warby Parker reported $236 million in revenue for Q2 2026, representing approximately 10% year-over-year growth.
• Adjusted EBITDA was approximately $33 million, with a 14% margin.
• The revenue growth was driven by progress in eye exams, insurance, and e-commerce, as well as investments in preparing for the launch of Intelligent Eyewear.

E-commerce and Store Traffic:

• E-commerce revenue was $58.7 million, down year-over-year due to the sunset of the home try-on program, but excluding this impact, e-commerce sales order volume grew low double digits.
• In-store traffic was noted as softer than desired, with the company focusing on increasing awareness through marketing campaigns and leveraging store openings to demonstrate the utility of AI glasses.

Eye Exams and Insurance Growth:

• Eye exams represented 7% of revenue, with exams growing over 30% year-over-year.
• Insurance penetration reached approximately 8%, with in-network business growing over 20% year-over-year.
• Growth in these areas was driven by increased marketing and awareness campaigns, as well as the integration of insurance benefits into the customer experience.

Strategic Investments and Tariff Refunds:

• The company utilized $14 million in tariff refunds to offset strategic investments in the business, including technology, optical labs, and retail operations.
• These investments were aimed at enhancing operational capabilities and customer experience in preparation for the Intelligent Eyewear launch.

Intelligent Eyewear Launch Preparation:

• Warby Parker is set to launch its Intelligent Eyewear collection this fall, with customer deliveries expected during the holiday season.
• Preparation included significant investments in technology infrastructure, optical labs, and retail operations to ensure a seamless customer experience and successful product integration.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed confidence in strategic initiatives and outlook, citing: 'We're entering an exciting new chapter for Warby Parker'; 'We've built the capabilities, partnerships, and infrastructure to prepare for this launch'; 'We're encouraged by the early response' to eye exams campaign; 'We're seeing encouraging momentum' in e-commerce, eye exams, and insurance; 'We're very excited to introduce our own product' (Intelligent Eyewear).

Q&A:

• Question from Brooke Roach (Goldman Sachs): Could you dive deeper into what's driving traffic trends in your retail business and how you're preparing for increased traffic with the Intelligent Eyewear launch?
  Response: Soft industry traffic and units are acknowledged, but Warby Parker gained market share with strong conversion and high average order values. Marketing will focus on eye exams, brand awareness, and insurance to drive traffic, with a rebound in active customer growth expected in the fourth quarter.

• Question from Oliver Chen (TD Cowan): What are you seeing that improves in-period active customer growth, and how are you managing inventory and pricing for Intelligent Eyewear?
  Response: Positive signals include strong e-commerce growth excluding home try-on headwind, momentum in eye exams (~30% YOY), and insurance growth. Intelligent Eyewear will be sold primarily on a pre-order/custom basis with minimal in-store inventory; its margin will be lower as a percentage but higher in absolute dollar terms due to higher unit cost.

• Question from Dana Telsey (Telsey Advisory Group): Any update on Target shop-in-shops, including AI glasses, and how does AI glasses launch affect store openings and insurance progress?
  Response: Five new Target stores rolling out this fall will feature Intelligent Eyewear for sale/demo. Store opening pace is expected to remain at ~50 per year. Insurance progress is strong with 35 million in-network lives and out-of-network submission tool penetration exceeding in-network, driving higher average order values.

• Question from Mark Cardin (UBS): What are the assumptions on fuel costs and tariff refunds for the back half guidance?
  Response: Fuel costs are volatile but operational improvements with new shipping carriers are expected to benefit margins. The full $14.4 million tariff refund benefit is recognized in 2026, with $6 million used in Q2 and $8.4 million planned for Q3, fully funding Intelligent Eyewear integration investments.

• Question from Mark Altswager (Baird): Can you discuss the Q3 revenue guide relative to trends and confidence in the full-year outlook?
  Response: Confidence in full-year guidance is high, supported by solid two-year trends, strong average order value and conversion, and momentum in insurance and exams. Q3 faces tough comparisons and traffic headwinds, but expects rebound; the full-year outlook excludes any Intelligent Eyewear revenue benefit.

• Question from Peter McGoldrick (Stiefel): How should we think about the makeup of the active customer base and the supply chain readiness for Intelligent Eyewear launch?
  Response: Customer retention remains strong, but focus is on attracting new customers via exams and insurance. The supply chain and optical labs are prepared for launch, with pre-orders planned to help manage demand; deliveries are on track for the holiday season.

Contradiction Point 1

Home Try-On (HTO) Headwind Timeline and Impact

Conflicting statements on when the HTO headwind fully dissipates, affecting quarterly growth comparisons.

Mark Altswager (Baird) - Mark Altswager (Baird)

2026Q2: In Q4, improvement is expected as the home try-on headwind fully abates (~0.5 percentage point)... - Dave Gilboa(CEO) and Adrian Mitchell(CFO)

Can you discuss confidence in full-year guidance, the Q3 outlook relative to softer trends, the expected Q4 revenue step-up, and the factors driving the traffic halo effect? - Brooke Roach (Goldman Sachs)

2026Q1: The Home Try-On headwind is now fully abated, and healthy growth is being seen without it. - Neil Blumenthal(CEO)

Contradiction Point 2

Financial Impact and Readiness of AI Glasses Launch

Contradiction on whether AI glasses revenue is excluded or included in guidance.

Mark Altswager (Baird) - Mark Altswager (Baird)

2026Q2: The guidance excludes any revenue benefit from Intelligent Eyewear or a halo effect. - Dave Gilboa(CEO) and Adrian Mitchell(CFO)

Can you discuss the confidence in full-year guidance, the Q3 outlook relative to softer trends, the expected Q4 revenue step-up, and the factors driving the traffic halo effect? - Paul Lejuez (Citigroup Inc.)

2025Q4: No incremental revenue from AI glasses sales is included in the 2026 guidance. - David Gilboa(CEO) and Neil Blumenthal(CEO)

Contradiction Point 3

Timeline and Specificity of AI Glasses Launch Details

Contradiction on the level of detail and specificity regarding the launch timing.

Peter McGoldrick (Stiefel) - Peter McGoldrick (Stiefel)

2026Q2: The company is ready for the Intelligent Eyewear launch this fall. Pre-orders will be available... The supply chain and optical labs are prepared to support a holiday season launch. - Neil Blumenthal(CEO) and Dave Gilboa(CEO)

What is the makeup of the active customer base in terms of new versus existing customers and the characteristics of the stickier cohort, and what is the supply chain readiness for the Intelligent Eyewear launch? - Oliver Chen (TD Cowen)

2025Q4: Specific timing details cannot be shared, but progress on the AI glasses product is exciting... The goal is to launch later in 2026; more details will be shared later. - David Gilboa(CEO)

Contradiction Point 4

Marketing Spend and Growth Algorithm

Guidance on marketing investment and growth rate appears inconsistent.

Brooke Roach (Goldman Sachs) - Brooke Roach (Goldman Sachs)

2026Q2: Increased marketing investment in H2 will be shared with partners. - Neil Blumenthal and Dave Gilboa(Co-Founders)

Can you provide insight into retail traffic trends, preparations for increased second-half traffic from the Intelligent Eyewear launch, and the store business's contribution to the business? - Mark Altschwager (Robert W. Baird & Co. Incorporated)

2025Q3: Marketing as a percent of revenue is expected to stay consistent. - Neil Blumenthal(CEO)

Contradiction Point 5

Nature of Customer Traffic and Conversion

Characterization of in-store traffic and conversion drivers shows a shift.

Brooke Roach (Goldman Sachs) - Brooke Roach (Goldman Sachs)

2026Q2: The industry is seeing continued softness in traffic and units. Warby Parker is gaining market share with strong in-store conversion, high average order values, and high customer satisfaction. - Neil Blumenthal and Dave Gilboa(Co-Founders)

Can you discuss the impact of the Intelligent Eyewear launch on retail traffic trends and store business contribution in the back half? - Brandon Cheatham (Citigroup Inc.)

2025Q3: The primary shift is in basket size among younger demographics. - David Gilboa(CFO)