Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you discuss how customer acquisition initiatives, including marketing, new stores, and the Target partnership, will impact revenue growth moving forward? A: David Gilboa, Co-CEO, explained that Warby Parker has invested in customer acquisition through various activities such as store openings, insurance integrations, and media investments. This has resulted in six consecutive quarters of accelerating active customer growth. The company expects significant growth from customer acquisition in 2025, with a balanced approach between customer growth and average revenue per customer.
Q: How is the Versant Health insurance partnership affecting customer acquisition in 2025? A: David Gilboa noted that prior integrations have shown increased contribution per member over time. Early trends with Versant are positive, tracking in line or ahead of previous integrations. The partnership is expected to drive performance in 2025 and is seen as a long-term opportunity for customer acquisition and revenue growth.
Q: What are your thoughts on traffic and the contribution of new stores to total revenue growth? A: Steve Miller, CFO, stated that the company is modeling moderate improvement in store productivity and low single-digit growth in e-commerce. The Target partnership is expected to add a moderate amount of top-line growth, with more significant contributions anticipated in the following year. The new stores are expected to maintain consistent productivity levels with a target of 35% four-wall margins and payback within 20 months.
Q: Can you elaborate on the drivers of non-marketing SG&A expense leverage contributing to adjusted EBITDA margin expansion? A: Steve Miller explained that the company expects sustainable margin expansion of 100 to 200 basis points annually. Leverage will come from efficiencies in staffing at retail stores, customer experience teams, and corporate expenses. The company plans to benefit from these efficiencies to achieve a 150-basis point target for adjusted EBITDA margin in 2025.
Q: What is Warby Parker's strategy regarding AI, personalization investments, and smart glasses? A: David Gilboa mentioned that Warby Parker is closely monitoring developments in wearables and smart glasses. The company believes it has complementary capabilities and assets to enter the space if desired, leveraging its brand strength, design capabilities, and omnichannel distribution. The company is excited about the potential role it could play as the market develops.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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