Dive Brief:
- As the company works to mitigate exposure to increased tariffs, Warby Parker’s first-quarter net revenue increased nearly 12% year over year to $223.8 million, according to a company press release Thursday. Active customers jumped 8.7% to 2.57 million on a trailing 12-month basis.
- The direct-to-consumer company reported its first positive quarterly net income as a public company, with $3.5 million in income compared to a loss of about $2.7 million in Q1 2024. It also opened 11 net new stores, ending the quarter with 287 locations total.
- Warby Parker lowered its 2025 full-year guidance, now expecting net revenue from $869 million to $886 million. The company previously expected a range from $878 million to $893 million.
Dive Insight:
Tariffs were a hot topic for executives and analysts during Warby Parker’s earnings call Thursday.
Co-founder and co-CEO Neil Blumenthal stressed that the company has “faced dynamic environments like this before.”
With tariffs on many Chinese goods imported to the U.S. at 145% and a global baseline tariff of 10% in play, the executive said Warby Parker has started taking action to mitigate its exposure.
The company has already made adjustments to its supply chain in recent weeks. Warby Parker is looking to decrease the percentage of its costs of goods sold that originate from China further, from about 20% to less than 10% by year-end.
The eyewear company has worked to reallocate some frame production outside of China to other partners in Europe and Asia. Lens sourcing has also started shifting outside China, with more work being done in the U.S.
Warby Parker’s customers, however, are not immune to price changes.
Another prong in the company’s efforts to mitigate the impact of new tariff rates has been to increase pricing in a targeted manner. Co-founder and co-CEO Dave Gilboa said on the call that it made price increases to certain lens types and some accessories at the end of April. Overall, this is estimated to amount to a low single-digit price increase across the business.
The company is still investing in marketing as it sees an opportunity in the space, as other advertisers pull back. Meanwhile, it's tightening its expenses elsewhere, which includes slowing the pace of hiring.
Assuming the current tariff plan remains in place, Chief Financial Officer Steve Miller said the company expects to mitigate its potential exposure, which, without its intervention efforts, would create about a $40 million to $50 million gross impact.
The latest results follow news in February that Warby Parker would open shop-in-shops with Target. The eyewear brand plans to open five shops by the second half of this year, all staffed with Warby Parker employees and include eye exam services.
“This strategy is really going to be a continuation of what we do every single day,” Blumenthal said on the call. “We’re going to learn a lot in the first five stores, and that will help us grow going forward. We view this as complementary to our stand-alone store growth.”
