Warby Parker Inc.

What they do

Warby Parker designs eyewear in-house at its New York City headquarters and sells directly to customers through its website, mobile app, and retail stores. The company generates revenue from selling glasses, contact lenses, and other eye care products, as well as from providing eye exams and vision tests. It operates an integrated omnichannel platform, and as of June 30, 2026, it had 352 retail stores.

Revenue drivers

• Eyewear (glasses) — Core product line, with unified pricing starting at $95 including prescription lenses; drives the majority of revenue through both direct-to-consumer online sales and retail stores.
• Contact lenses — A growing category within the vision care offering, sold directly to customers as part of the one-stop shop for eye care needs.
• Eye exams and vision tests — Provides comprehensive eye care services, including in-store eye exams and the Virtual Vision Test telehealth app, which generates revenue from exams and supports customer retention and higher average revenue per customer.

Recent performance

For Q2 2026, net revenue was $235.5 million, up 9.8% year over year, and net income was $4.6 million versus a net loss of $1.8 million in Q2 2025. Gross margin expanded to 57.9% from 53.0%, partly due to an $11.8 million tariff refund benefit and a 110 basis point benefit from one-time inventory write-downs in Q2 2025. Active customers grew 4.1% to 2.71 million, and average revenue per customer rose 6.6% to $336. For the six months ended June 30, 2026, revenue was $478.0 million, net income was $7.8 million, and operating cash flow was $29.6 million in Q2, ending the quarter with $292.7 million in cash.

Strategy

Management is preparing for the launch of Intelligent Eyewear, AI-enabled glasses developed in partnership with Google and Samsung, incorporating Google Gemini. The company plans to use the full-year tariff refund benefit of $14.4 million to offset strategic investments in Q2 and the rest of the year for this launch. It continues to invest in retail expansion, opening 15 net new stores in Q2 and targeting 50 new store openings for 2026. Operating priorities include driving customer retention (with over 100% retention over 48 months), leveraging proprietary technology like Virtual Try-On and Virtual Vision Test, and maintaining a data-driven, vertically integrated supply chain.

Risks

• Limited experience at current scale — Rapid growth could strain resources, hiring, training, and company culture, potentially harming brand and financial performance.
• Supply chain disruptions — The vertically integrated business exposes the company to disruptions at many critical points, which could materially affect operations and results.
• Tariff exposure and refund volatility — Q2 2026 results included a significant $11.8 million tariff refund benefit; future tariffs or changes in refunds could materially impact margins and profitability.
• Intelligent Eyewear launch execution — The company is making targeted investments for the launch, and any failure to successfully execute or meet customer demand could adversely affect results.

Outlook

Management reaffirmed full-year 2026 guidance of net revenue of $959 million to $976 million, representing approximately 10% to 12% growth, and Adjusted EBITDA of $117 million to $119 million, with 130 basis points of margin expansion. Guidance includes the $14.4 million tariff refund benefit, which will offset investments related to the Intelligent Eyewear launch, and does not include any revenue contribution from that launch. The company plans to open 50 new stores in 2026.