10xing Warby Parker -> $10B

🧠 The Takeaways

Warby Parker is approaching its all time lows again. Let’s scoop this biz up before a competitor does and go long on affordable eyewear.

1. The Warby model is working. Let’s do more of it.

2. It’s time for Warby to shape their customer’s culture.

3. We’re going to launch a brand war with Luxottica.

+ Stop watching the stock market.

LBAB! Community - Heads Down. Rev Up. That’s the way we like to…

The single best thing you can do for your mental health is not look at the stock market for the next quarter.

The default will be chaos. 

There isn’t enough accurate information for you to make tactical or strategic decisions based on it. All it’s doing is distracting you from building the more valuable pieces of your business.

Things will continue to change on a dime. Your job is to adapt once something real forms. If consumer confidence is at an all-time low, how do you position your products to make it irresistible for customers to continue to buy?

If you’re expecting lower sales than your original forecasts, what do you need to do to weather the storm and stay afloat? Survival is what matters in times of uncertainty.

My dad has this great line: If you need cash in the next 90 days, you shouldn’t be invested in the stock market. 

Here’s what I’m doing: 

Keeping enough cash in the accounts to weather a storm if one comes. 

But other than that, I’m focusing on building for the long-term and not my net worth swing like a yo-yo.

And always remember…

Let’s Examine This Biz

Note: As always, none of what follows is legal, tax, investing, financial, or any other sort of advice. And I was never here.

Warby Parker (the DTC archetype of cutting out the middleman to provide you with more affordable eyewear) can’t catch a break in the public markets.

• Share Price: $14.80

• Market Cap: $1.8B

• L5 Performance: -72%

• P/E Ratio: N/A

Wrapped in Tariff concerns, this stock is watching all of its “almost profitable” Q4 momentum get wiped out. It’s the perfect time for us to scoop them up and build a multi-generational brand.

Financial Summary

TLDR Analysis: Trending in the right direction

• Rev is accelerating again. And faster than COGS. 👍

• Opex is still too high for my taste. 👎

• Net Income is trending to be Positive in the next year. 🤞

This is the trajectory you want to see for a deeply unprofitable brand. Grow topline. Get COGS under control. Net Income is approaching break even/positive.

Let’s Fix This Biz

Here are my 3 moves to flip this challenger into a household name before Luxottica can bully buy them.

1) Keep on Trucking

This is one where I have to admit I was wrong. 

For years, I haven’t liked Warby’s over-investment in Retail and OPEX. They still spend 59% of Rev on OPEX at a 55% Gross Margin.

But they are at the investment tipping point where, with more scale, the’ll flip to printing cash. (Hims was at a similar point in 2023 + broke through last year to become a cash machine).

Warby Parker has actually accelerated growth over the last 3 years:

• 2022 Rev: +11% YoY

• 2023 Rev: +12% YoY

• 2024 Rev: +15% YoY

That might not seem like Headline-grabbing numbers, but over 3 years coming out of COVID, that’s a CAGR of 9% (vs. overall industry @ 8% CAGR).

In that time, they’ve cut their annual loss consistently by $40m/yr. If they maintain that, they’ll print their first profit in 2025 of $20m. 

It’s small, but if they keep that performance consistent over a decade they’ll be printing $200m+/yr in Profits.

Takeaway: If the plan is working… Trust the process. Work the plan.

2) Create the Movie Line

Warby should create a line of glasses that mimics the most popular styles of the year from the most popular content. 

They could have a rotating style of the most popular glasses of all time that shoppers could browse. And promote styles from cultural moments as they come up (like everyone’s obsession with Parker Posey from White Lotus). 

This happens all the time (here, and here).

Create an affordable version of those glasses and ride the wave while people are searching for aspirational eyewear.

Warby Parker has the scale + resources to partner with production studios for product placement + create cultural moments around their products.

The real way brands win is shaping the culture. 

When customers see aspirational content, they immediately want your product. (It’s no accident that every White Lotus Episode is shot at a Four Seasons—they sponsor the show).

Warby should be pushing market demand instead of just trying to capture it.

Takeaway: Capture lighting in a bottle when cultural moments present themselves.

3) Get into a full-scale Brand war with Luxxottica

Warby Parker is at the point in their brand evolution where they need to paint someone as the villain + create a brand around what they stand for. 

I’m talking early 2000’s Apple vs. Microsoft style advertising.

The easiest villain for Warby Parker to paint as the opposite of their brand ethos is Luxottica (Owner of Ray-Ban, Oakley).

1. Warby has always stood for affordable DTC.

2. Luxottica stands for Luxury, dominance through monopoly, and old-school retail experience. 

Warby can stand up as the “People’s eyewear brand.” Where you buy your glasses with cash from your hard-earned paycheck. Positioning Luxottica as the 1% brand. 

Here’s the real beauty. 

That narrative reinforces both brands’ positioning more and helps both sell more glasses. 

What no one talks about from those old Apple vs. Microsoft ads:

1. They propelled Apple to become the largest consumer electronics brand in the world.

2. But Microsoft also became a multi-trillion-$ biz during the same period.

Warby has a once-in-50-year opportunity to establish and create a narrative around what they want the brand to be before someone else can define it for them. 

And everyone loves a good hero’s journey.

Takeaway: Painting a common villain is the easiest way to build a tribe.

Final Thought

When will Warby Parker need to enter wholesale?

Whether they like it or not, it’s a natural evolution their brand will need to make when expanding their own retail stores no longer makes financial sense.

Is it at 300 stores? 500? 1000?

It’s not a question of if, but when.

And will their model work for someone else to sell their glasses?

They’re rolling out a store-within-a-store concept at Targets across the US, which is a big first step. But will their brand be able to maintain “selling out” and going down the Retail path? They have:

1. 55% gross margins, so they can sustain the budget impact.

2. Enough brand awareness to drive traffic to other stores.

3. High OPEX on owned stores.

But what happens when a DTC brand that has obsessively controlled their UX across all channels and parts of the User Journey gives up control?

I’ve always seen Warby as the trailblazer and the brand that creates the path for “DTC brands.” 

No one else will really be able to figure this out for them. 

But they will have to navigate it if they want to become a $10B+ brand.