The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Warby Parker reported another quarter of growing sales and profit. The eyewear maker’s revenue grew 11 percent to $166 million in the second quarter of the year, and it generated $14 million in adjusted earnings before interest, taxes, depreciation and amortisation, up from $6 million a year earlier.
Warby Parker continued to reduce online marketing spend, this time by 30 percent year over year. It also opened 13 new stores, an approach that has become a dependable lower cost customer acquisition tactic than Facebook and Instagram ads.
The brand is a rarity among publicly-traded e-commerce brands who are seeing diminishing profits and declining sales amid lower discretionary spending and return to in-store shopping.
The performance in the second quarter prompted Warby Parker to increase its revenue projections for the year. The company now expects sales to grow as much as 11 percent year over year in 2023, from a previously projected increase of 10 percent. Its stock jumped more than 7 percent in pre-market trading.
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Warby Parker said it will increase its marketing spend in the the third and fourth quarters of this year, which could spark higher sales growth, but will test its ability to simultaneously increase profits.
Learn more:
For Many Digital Retailers, Profits and Growth Appear to Be Mutually Exclusive
DTC brands and e-commerce platforms delivered some rare good news this week in the form of shrinking losses, but investors were largely unimpressed.
The DTC bust of the past two years has casted a cloud on the sector, but emerging fashion brands with a better handle on supply, demand and customer retention are seeing profitable growth.
In London, where independent labels have been hit hard by the implosion of key stockist Matches, brands like Clio Peppiatt, Marfa Stance and Completedworks have grown direct-to-consumer businesses that peers can learn from.
Apparel start-ups founded on the promise of offering men the perfect T-shirt are proving resilient in an otherwise dreary DTC sector rampant with fire sales, bankruptcies and steep revenue declines.
Apparel brands Knot Standard and Billy Reid are teaming up in a move investors say we may see more of as fashion start-ups seek alternative funding routes to grow their businesses.