The eyewear maker’s results were consistent with its financial performance in recent quarters. Sales rose 12 percent year over year in the first quarter on the strength of its growing store fleet. It also decreased its losses by $23 million to $11 million and increased its adjusted earnings before interest and taxes by $17 million.
Warby Parker achieved a healthier bottom line partially because it decreased its marketing spend by 35 percent year-over-year during the quarter. Though that marketing pullback led to its online sales drop of 8 percent, it was offset by an in-store sales increase, up 28 percent during the quarter. The brand opened six stores in the first quarter of the year, bringing its total brick-and-mortar fleet to 204.
Fellow digitally-native brand Allbirds delivered better-than-expected results. The sneaker seller saw its sales drop 13 percent to $54 million in the first quarter, but that dip was lower than its anticipated decline of up to 28 percent. Investors were receptive. Allbirds’ stock increased nearly three percent in after-hours trading.
But the brand moved further from profitability. Despite reducing its digital marketing spend by 16 percent during the quarter and halting its retail expansion, costs related to previous store openings and current restructuring efforts went up. Allbirds’ net loss widened by $13 million during the quarter, and its adjusted EBITDA loss deepened to $22 million.
Allbirds is focussed on regenerating demand from its core customers, while remaining steadfast in its eco-conscious mission. In March, the company announced it will release a zero-carbon shoe this year. It will double down on these product development efforts as co-founder Tim Brown announced on Tuesday that he will transition from co-CEO to chief innovation officer.
Are DTC Brands Pulling Off Brick-and-Mortar?
As online advertising remains expensive and crowded, digital brands continue to invest in physical stores to drive customer growth. Warby Parker and Allbirds provide disparate case studies for how to navigate physical retail.