Warby Parker reaches profitability milestone while navigating quarterly earnings miss

The US-based eyewear brand Warby Parker has reported its financial results for the fourth quarter and full fiscal year ended December 31, 2025, achieving its first full year of positive net income. Total annual revenue reached 871.90 million dollars, representing a 13 percent increase compared to the previous year.

However, the fourth quarter presented challenges as earnings per diluted share (EPS) of -0.05 dollars fell significantly below the forecasted 0.05 dollars. Quarterly revenue of 212 million dollars also missed expectations, coming in 0.53 percent lower than anticipated.

Brand strategy and the shift to artificial intelligence

During the earnings call, analysts raised concerns regarding the company’s strategy to address softness in younger consumer segments. Executives outlined plans to enhance marketing efforts and leverage their growing retail footprint to counter this trend. A major strategic pivot for 2026 involves moving into a "next act" defined by groundbreaking innovation.

Co-founder and co-CEO Dave Gilboa announced plans to introduce the company's first artificial intelligence (AI) glasses in partnership with Google and Samsung. Gilboa noted that these devices, designed for all-day wear, are expected to unlock a significant new total addressable market (TAM) by taking advantage of the "biggest technology shift in our lifetime."

Strategic priorities and retail expansion

Co-founder and co-CEO Neil Blumenthal detailed three strategic priorities for the upcoming year focused on scaling the company’s omnichannel model. These include expanding the retail footprint, increasing revenue within the existing fleet through eye exams and product mix, and enhancing the online experience.

The company ended 2025 with 323 stores, having opened 47 net new locations during the year. Blumenthal highlighted that this current fleet is just a fraction of the approximately 45,000 optical shops in the US.

Management believes there is long-term potential for at least 900 stores, citing consumer surveys that identify the lack of a nearby physical location as a primary barrier to purchase.

Financial health and 2026 outlook

Despite the quarterly miss, annual adjusted EBITDA grew by 30.2 percent to 95.20 million dollars, and the adjusted EBITDA margin rose 140 basis points to 10.9 percent. The company reported its third consecutive year of positive operating cash flow and free cash flow, ending the year with 286.40 million dollars in cash. Consequently, the board of directors authorized a 100 million dollar share repurchase program in February 2026.

For the full year 2026, Warby Parker provides guidance of 959 million to 976 million dollars in net revenue, representing 10 percent to 12 percent growth, alongside the opening of an additional 50 new stores.