Warby Parker Inc. reported total sales revenue increased 12.2% to $172.0 million year over year during the fiscal first quarter ended March 31, 2023.

Ecommerce continues to decline

The eyewear retailer’s ecommerce revenue decreased 8% in Q1 2023 compared with a year earlier, according to a Seeking Alpha transcript of the earnings call on May 9. The decline in ecommerce revenue was in line with the retailer’s expectations, said Steve Miller, senior vice president and chief financial officer, during the call.

Miller said the decline was driven by “an intentional reduction in marketing spend by 35% year over year, as we bring marketing spend as a percent of revenue back to pre-pandemic levels in the low teens.”

The retailer expects ecommerce revenue to increase further into 2023, Miller said.

Warby Parker is No. 340 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

Warby Parker expands network of stores

The retailer finished Q1 2023 with an additional 35 stores. That brings its total to 204, “which compares favorably to retail revenue of about 28% year over year,” Miller said during the call. “Retail productivity in Q1 was 103% versus the same period last year.”

Warby Parker finished the quarter with 2.29 million active customers. That’s a 2.5% increase compared with the same period a year ago. Its average revenue per customer increased 8.4% year over year to $270.

Warby Parker attributes sales boost to in-store shopping, less due to ecommerce

“It’s worth noting that our revenue growth follows a similar pattern to our growth in active customers,” Miller said, “where active customers are increasing in retail driven by new store openings and decreasing our ecommerce channel as we rebalance marketing spend.”

Co-founder, co-CEO and co-chair Dave Gilboa told investors the retailer plans to see increased in-store sales as well as a “pickup in ecommerce traffic in the second half of this year.” In Q1, Warby Parker launched five new eyewear collections, including a celebrity collaboration with Jimmy Fallon.

Digital marketing strategy

Warby Parker also plans to advertise on linear TV and invest in digital programs like search engine optimization (SEO) and search engine marketing (SEM).

“With our channel mix between stores and [ecommerce] now rebalanced to pre-pandemic levels, we expect marketing spend as a percent of revenue to remain in line with pre-pandemic levels in the low double digits,” Gilboa said.

For the fiscal first quarter ended March 31, 2023, Warby Parker reported:

• Revenue of $171.96 million, an $18.8 million increase over the revenue of $153.21 million in 2022.
• A net loss of $10.8 million. That is a $23.3 million decrease from the reported loss of $34.13 million in Q1 2022.
• Gross profit increased 5.7% to $94.8 million.
• Active customers increased 2.5% to 2.29 million.
• Average revenue per customer increased 8.4% year over year to $270.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

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