Warby Parker’s stock drops after surprise quarterly as gross margin keep falling

Shares of Warby Parker Inc.
dropped 3.6% in premarket trading Wednesday, after the eyewear retailer reported a surprise fourth-quarter loss as gross margins continued to fall. Net losses narrowed to $19.05 million, or 16 cents a share, from $20.25 million, or 18 cents a share, in the same period a year ago. Excluding nonrecurring items, the adjusted net loss was $1.11 million, while the FactSet consensus called for earnings per share of 1 cent. Revenue grew 10.5% to $161.9 million, to beat the FactSet consensus of $160.9 million. Gross margin declined to 53.8% from 55.1%, due primarily to increased sales of contract lenses which are sold at a lower margin than glasses. The company has reported year-over-year declines in gross margin for every quarter since going public in September 2021. For 2024, the company expects revenue of $748 million to $758 million, which surrounds the current FactSet consensus of $751.2 million. The stock has rallied 39% over the past three months through Tuesday, while the S&P 500
has gained 11.5%.

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