A maker of in-house designed eyeglasses and sunglasses, Warby Parker sells frames online and across its U.S. stores alongside eye exams, contacts, and telehealth vision care. Four Wharton students founded it in 2010 after co-founder Dave Gilboa lost his glasses backpacking and couldn't afford a replacement, sparking a plan to undercut a pricey eyewear industry. The quirky name comes from two characters—Warby Pepper and Zagg Parker—spotted in Jack Kerouac's journals at a library exhibit. Its Buy a Pair, Give a Pair program has handed out millions of glasses to people in need.
Gross margin rebounds to 57.9% as $11.8M in tariff refunds more than offset underlying cost pressures.
Warby Parker's snapped back to 57.9% after a year of compression. rose 9.8% to $235.5 million and the company posted of $4.6 million, but the swing was driven almost entirely by an $11.8 million refund of — without it, the underlying margin would have been roughly flat with last year's depressed 53.0%. The core business is growing steadily, but the path to sustained profitability still depends on absorbing persistent tariff and contact-lens mix headwinds.
Key takeaways
expanded 490 to 57.9%, but the improvement was overwhelmingly a one-time event: $11.8 million in IEEPA tariff refunds recorded in cost of goods sold added 500 basis points, and lapping the prior-year Home Try-On contributed another 110 basis points.
rose 9.8% to $235.5 million, driven by a 4.1% increase in Active Customers and higher Average Revenue per Customer from premium lens adoption and attached eye exams.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 9.8% to $235.5M and gross margin expanded 490 bps to 57.9%, aided by IEEPA tariff refunds.
⌄
Net grew 9.8% to $235.5M, driven by a 4.1% increase in Active Customers and higher Average Revenue per Customer from premium lens penetration and attached eye exams.
expanded 490 to 57.9%, primarily due to a 500 bps benefit from $11.8M in IEEPA tariff refunds recorded in cost of goods sold and a 110 bps benefit from lapping prior-year Home Try-On write-downs.
SG&A expenses grew 12.8% to $133.3 million, outpacing growth, as retail workforce expansion and technology costs were only partially offset by $4.4 million in reimbursements from Google for AI glasses development.
The company swung to of $4.6 million from a $1.8 million loss a year ago, while rose to $32.9 million with a 14.0% margin.
for the first six months was $54.1 million, and the company ended the quarter with $292.7 million in cash and no borrowings on its $120 million .
The retail footprint expanded by 15 net new stores in the quarter, reaching 352 locations, and a $100 million program was authorized but not yet used.
What changed
The collapse flagged in Q2 FY2025 — when it fell to 53.0% on Home Try-On write-downs and tariff costs — has been reversed, but only on paper: the 57.9% figure this quarter includes an $11.8 million IEEPA tariff refund that will not repeat, and stripping it out leaves the underlying margin near last year's level.
Active Customer growth decelerated further, to 4.1% from 4.8% in Q1 FY2026 and 9.0% in Q2 FY2025, confirming the slowdown noted last quarter is not a single-period blip.
The Google partnership, previously flagged for its financial and strategic impact, is now generating tangible cost offsets, with $4.4 million in reimbursements reducing SG&A during the quarter.
The $100 million authorization, noted as a new capital allocation priority in FY2025, remains unused, with the company continuing to prioritize liquidity and store expansion.
No update was provided on the remediation of material weaknesses in internal controls, which have drawn adverse auditor opinions for four consecutive annual filings.
What to watch
Whether can hold above 54% in Q3 FY2026 now that the one-time IEEPA tariff refund has passed, or if the underlying tariff costs and contact lens mix will push it back toward the low-50s range.
The trajectory of Active Customer growth after decelerating to 4.1%, to see if the slowdown stabilizes or continues toward low-single-digit rates as the store base matures.
The financial impact of the Google partnership beyond cost reimbursements, including any progress toward the potential $75 million equity investment or from AI-enabled smart glasses.
Whether the $100 million authorization is utilized in the second half of the year, signaling a shift in capital allocation priorities.
rose 12.8% to $133.3M (56.6% of ), driven by retail workforce growth and higher technology costs, partially offset by $4.4M in reimbursements from Google for AI glasses development.
The company swung to of $4.6M from a $1.8M loss last year, while increased to $32.9M with a 14.0% margin.
was $54.1M for the six-month period; liquidity remained strong with $292.7M in cash and an undrawn $120M .
The company opened 15 net new stores in Q2, reaching 352 total, and authorized a $100M program, though no shares were bought back during the quarter.
Quantitative and Qualitative Disclosures About Market Risk
The company sees limited material market risk from FX, interest rates, and inflation, holding $292.7M in cash and not using derivatives.
⌄
Foreign exchange exposure arises from Canadian operations and international purchases in yen and euros, but is not deemed material.
Cash and equivalents of $292.7M are held in money-market funds under a policy prioritizing liquidity and capital preservation.
The company does not use to hedge interest rate risk and considers fair-value sensitivity immaterial due to short durations.
Inflation has had a limited impact to date, though sustained cost pressure in raw materials, transportation, and labor could harm results if not offset by higher .
The information contained under the heading “Litigation” in Note 10 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q is incorporated by reference into this Item.
⌄
The information contained under the heading “Litigation” in Note 10 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q is incorporated by reference into this Item.
There have been no material changes to the risk factors affecting our business, financial condition, or future results from those set forth in Part I, Item 1A, Risk Factors, in the Annual Report. However, you should carefully consider the factors discussed in the Annual Report a…
⌄
There have been no material changes to the risk factors affecting our business, financial condition, or future results from those set forth in Part I, Item 1A, Risk Factors, in the Annual Report. However, you should carefully consider the factors discussed in the Annual Report and in this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.