Warby Parker Inc. (NYSE:WRBY) Q3 2023 Earnings Call Transcript

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Mark Altschwager: Thank you. And Steve, that actually dovetails nicely into my follow-up. I guess I’m wondering if there’s any initial views you can share on sales growth plans for 2024. And I guess typically, as you called out, you do see your biggest quarter-over-quarter revenue gain from Q4 to Q1. Any reason we shouldn’t expect that same typical seasonality as we look at the next few months here?

Steve Miller: Yes, great question, Mark. It’s safe to assume that we should assume the step-up from Q4 to Q1 will follow a similar trend line to what we’ve seen in previous years. That’s just the pattern that our business has exhibited for many, many years, and we expect the same step-up from Q4 to Q1 looking ahead to next year.

Operator: The next question today comes from the line of Paul Lejuez from Citigroup. Please go ahead. Your line is now open.

Brandon Cheatham: Hey, everyone, this is Brandon Cheatham on for Paul. I was wondering; now that we’ve lapped the reduction in marketing spend. Can we assume active customer growth to accelerate over the next couple of quarters? And then, I was also wondering, could you quantify just how much of a drag on active customer growth is the change to multiple people ordering from one household account, and how should we think about that going forward? Thanks

Dave Gilboa: Yes. Thanks, Brandon. To start, yes, we do expect that active customer growth will continue to accelerate. As mentioned, this is a trailing 12-month metric. And so we’re currently comping against a period where three of the quarters we were spending materially less on marketing and then one quarter where we’ve seen marketing spend return to year-over-year growth. And we have seen that metric move positively as we’ve reintroduced some marketing investment and expect that to continue in the coming quarters. And right now we aren’t provide any additional color on kind of the multi-person accounts, but it is a factor that is moderately impacting that metric and one that we may be able to provide some additional visibility into — in the coming quarters.

Brandon Cheatham: Got you. And if I can just a quick follow-up. The direct business return to growth, I’m just wondering, can you help frame that with ex-contacts, my understanding is that’s almost entirely online and your penetration has increased there. So I guess what is the core direct business and what is your outlook for that? Thanks.

Dave Gilboa: Haven’t broken out the split online of contacts versus glasses, and we’ll continue to report on e-comm really as a blended channel. Suffice it to say that we’re excited with the progress we’re making selling contacts online and seeing that account for a greater portion of our business. We’re also excited at how customers are using our e-commerce channel both to purchase new glasses and to more importantly, return to purchase a second or third pair of glasses.

Operator: The final question today comes from the line of Alex Straton from Morgan Stanley. Please go ahead. Your line is now open. Please do ensure that you are unmuted locally. It appears we may have lost Alex.

Operator: This concludes today’s question-and-answer session and this concludes today’s call. Thank you all for your participation. You may now disconnect your lines.

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