Warby Parker reports a loss from the holiday quarter and provides a weak outlook.

• In the last weeks of December, the optical industry typically experiences peak demand, but Warby Parker reported sales were negatively impacted during that time.
• Nearly $5 million of lost sales in the fourth quarter and over $15 million projected to be lost in the first quarter due to the effects of omicron, as fewer customers visited for eye exams and to try on new eyeglasses in early January, was announced by management.
• Warby Parker anticipates that its brick-and-mortar stores will achieve full productivity by the end of the year.

The eyewear retailer reported continued losses on Thursday, stating that its sales were negatively impacted during the holiday quarter due to the omicron variant of Covid-19, which kept customers away from its stores.

Warby Parker expects annual revenue to be between $650 and $660 million, which is lower than the anticipated $687.7 million forecast by analysts.

Nearly $5 million of lost sales in the fourth quarter and over $15 million projected to be lost in the first quarter due to the effects of omicron, as fewer customers visited for eye exams and to try on new eyeglasses in early January, was announced by management.

On Thursday, the stock reversed course and closed up 3.3% at $27.70, after falling more than 20% in premarket trading. Despite this, shares remain below the 52-week high of $60.30, reached last November, and the direct listing price of $54.05. The stock is down about 40% year to date.

In the three months ended December 31, Warby Parker recorded a net loss of $45.9 million, or 41 cents per share, compared to a loss of $4.3 million, or 8 cents per share, in the same period the previous year. The company attributed the wider losses to a $31.6 million increase in stock-based compensation expense and related employer payroll taxes.

Revenue grew to $132.9 million from $112.8 million a year ago.

The decline in sales at Warby Parker during the last weeks of December was attributed to the rise of the omicron variant, which coincided with the peak demand in the optical industry as consumers spent their remaining flexible spending dollars before the New Year.

According to Refinitiv data, analysts predicted that Warby Parker would report a loss of 9 cents per share in its fourth quarter, despite expecting sales of $133 million.

Despite the challenges, there was a positive aspect: customers at Warby Parker spent more money on average. The average revenue per customer increased by 13% annually to $246, the company stated.

Dave Gilboa, co-founder and co-CEO of Warby Parker, characterized the company's recent difficulties as a "temporary setback." However, he informed analysts on a conference call that the company has experienced a recovery curve in recent weeks.

He stated that he is still as confident as ever in the success of their long-term growth plan, and that they expect to see a reacceleration of their growth in the near future.

Warby Parker expects its brick-and-mortar stores to reach full productivity by the end of the year. The company opened 35 stores in 2021, ending the year with 161 locations. In 2022, Warby Parker plans to open another 40 locations.

The company's virtual try-on option on its website allows customers to see how different eyeglasses might look on their faces, which has been a competitive advantage during times when store sales have slowed down.

In 2021, Warby Parker's e-commerce sales accounted for 46% of its total revenue, a slight decrease from 50% in 2020, but an increase from 35% in 2019.

Find the full earnings press release from Warby Parker here.