A Warby Parker store in The Standard, Los Angeles, California.
Michael Buckner | Getty Images
Eyewear brand Warby Parker has lost or broken money for each of the past three fiscal years – and warned it could face headwinds trying to make a profit as a publicly traded company, according to documents filed with securities regulators on Tuesday .
Best known for selling affordable, fashionable prescription glasses, the retailer is preparing for its Wall Street debut. In January it was said to have applied in confidence to be listed on the US stock exchange
With its IPO, Warby Parker is expected to join a growing list of consumer-facing brands soon to be traded on Wall Street. Jessica Albas Honest Co. and medical scrub maker Figs recently went public. The Sweetgreen lettuce chain has signed up for an IPO in confidence, and the Allbirds shoe brand is reportedly preparing for one as well.
Over the past three years, Warby Parker’s sales have grown – but so have its losses. Warby Parker’s net sales for fiscal years ended December 31, 2018, 2019, and 2020 were $ 272.9 million, $ 370.5 million and $ 393.7 million, respectively, as reported by documents filings with the Securities and Exchange Commission.
The net loss was $ 22.9 million in 2018 and $ 55.9 million in 2020. In 2019, it was balanced.
Warby Parker said it has continued to lose money over the past few months. It lost $ 7.3 million in the six months ended June 30. At the time, the company had a cumulative deficit of $ 356.3 million.
“Because we have a short operating history at scale, it is difficult for us to predict our future operating results,” the company said in the filing. “We need to generate and maintain higher revenues and manage our costs to be profitable. Even if we do, we may not be able to maintain or increase our profitability.”
The direct-to-consumer brand, founded in 2010, originally sent customers glasses to try on at home. However, it has expanded beyond purely online operations by opening stores and offering customers the ability to collect purchases in person. The strategy could help the company cut e-commerce spend from shipping to returning.
According to the filing, it has grown to more than 145 stores.
Almost all of Warby Parker’s sales – 95% for the fiscal year ended December 31st – came from eyewear sales. Only 2% comes from selling contacts.
In the filing, the company said it had unique advantages over competitors. Among them, it is said that it has generated a fan base. On average, customers acquired between 2015 and 2019 had a retention rate of around 50% within the first two years after their first purchase and a retention rate of almost 100% over four years.
The start-up has won the trust of heavy hitters in Silicon Valley. In its most recent round of risk finance in 2020, it raised $ 120 million, which is worth $ 3 billion, according to PitchBook data.
Shareholders include some of these investors such as Tiger Global, T. Rowe Price, General Catalyst, D1 Capital Partners, and Durable Capital, according to the filing.
– CNBC’s Lauren Thomas contributed to this report.