Warby Parker Takes An Omicron Beating

As Omicron cases surged in December, consumers lost interest in new glasses, sapping an estimated $5 million out of Warby Parker’s fourth-quarter results.

The company says those depressed sales levels are extending into the current quarter, leading it to lower its forecasts for the remainder of the year.

Fourth-quarter sales climbed 17.8%, to $132.9 million, and when compared to the pre-pandemic period of 2019, they’re up 41.9%. Losses soared to $45.9 million, compared to $4.3 million in the comparable period of 2020, due to stock-based compensation expenses and related employer payroll taxes, plus increased marketing spending to build awareness during the holiday and flexible spending season.

For the year, losses mushroomed to $144.3 million, from $55.9 million in 2020.

The New York-based D2C company now says it expects $15 million in lost sales this year due to the Omicron variant. It anticipates revenue between $650 million to $660 million, a growth of between 20% to 22%.

Still, observers say the company’s longer-term prospects continue to be solid.

“We remain bullish on the long-term growth story,” writes Mark R. Altschwager, an analyst who follows the company for Baird. And with Warby Parker planning an additional 40 new units this year, brick-and-mortar sales continue to drive growth, as the company expands beyond its digital roots.  “We continue to expect strong customer acquisition as the company accelerates store openings,” Altschwager says.

Separately, Warby Parker announced its crossed a significant milestone and has now distributed more than 10 million pairs of free glasses as part of the one-for-one giving program it’s operated since the company was founded in 2010.

Warby Parker says its “buy a pair, give a pair” efforts have expanded to more than 50 countries.

The program features two different approaches. First, it helps build social entrepreneurship, teaching people to give basic eye exams and sell glasses at affordable prices. Working with the nonprofit VisionSpring, this model also creates jobs. Typically, 50% of the customers of these ventures have never had glasses before.

And its direct donation efforts work with local organizations to provide free screenings, eye exams and glasses to schoolchildren in the U.S.

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