Good morning, and welcome to this next session of our t he 32nd annual Global Retailing Conference. I'm very pleased to introduce our next session with Warby Parker. Here with me today, I have Neil Blumenthal and Dave Gilboa, both Co-founders and Co-CEOs. Welcome, Neil and Dave. Thanks for having us. Thank you. Neil, can you start us off with some updated thoughts on your outlook for the U.S. vision care market? Sure. So one of the things that we've seen is sort of consistent behavior from our customers. Now, we tend to have slightly higher income customers than the overall market. We certainly saw some challenges in April, given the tariff announcements, as a lot of people have seen. But we've come out of that, and from May onwards have had sort of strong and steady growth. We see consistent repeat purchase behavior. You know, I think like many companies, need to figure out how to navigate the tariff situation, and we're surprised by the significant impact it had on consumer sentiment in April, but are feeling confident right now. That's great to hear. One of the questions that we're asking all companies at our conference today is their outlook for the second half and the health of the consumer. What's your outlook for the second half of 2025 relative to recent results? Do you expect things to be same, better, or worse? We expect them to be consistent, and we're delivering, you know, higher growth. Again, very consistent from May onwards. We'll be comping sort of a period in Q4 of last year, where we saw an acceleration of growth, and sort of our consistent growth that we've guided towards incorporates that more challenging comp for us. So yeah, in general, we're feeling confident. We're seeing strong traffic in our stores and our web, our apps and website, and seeing consistent product mix and conversion. That's great. As a follow-up, is there any differences in how you would think about that same question going into 2026? You know, we've always kind of positioned ourselves, especially since COVID, as like, "Hey, it doesn't matter what's going on externally, we need to deliver. We need to deliver on growth, we need to continue to expand EBITDA," which we've done consistently at 100- 200 basis points. So if that means we need to come up with more creative marketing strategies, we go ahead and do that. But right now, we feel that the wind is at our backs and are feeling good going into 2026. That's really great to hear. Another question that we're talking to nearly every company about is the competitive landscape. How would you characterize the competitive landscape today? What are your expectations for share consolidation going forward? Do you expect that to speed up, slow down, or stay the same? Yeah, so if you look at our category, it's certainly a competitive marketplace, but it's one that the competitive landscape hasn't materially changed really since we launched in 2010. There really haven't been many new entrants that have taken meaningful share. The market is made up roughly 50/50 of large retail chains, and the other 50% is independent optometry practices, where eye doctors operate their own businesses and sell their own glasses and contacts. And we expect that, you know, over time, there will be more consolidation, where those independent doctors will be making up a smaller percentage of the overall market. But it's not a drastic change, and really haven't seen significant shift, share shift within the existing players. I'd say, you know, we continue to outperform the market and continue to take share, both in good times and bad, and expect that to continue. Very clear. Let's shift to some of the strategic initiatives that are driving that share gain, and I think first and most importantly, is your store strategy. Can you elaborate on how your densification strategy in certain suburban or urban markets fits into your longer-term goal of having more than 900 standalone stores in North America? Which markets or areas do you see the most opportunity? Yeah. So, we have around 300 stores now out of roughly 45,000 stores in the U.S., and so, still a massive opportunity for us to scale our footprint. And, this year, we'll open around 45 stores, including some new Target locations that we're excited about. And still see a path to open several hundred stores over the next few years, both in new markets and in additional markets. Right now we operate in around 220 markets, but only 30 of those have more than one store. So we have lots of opportunity to add incremental stores into areas where we already have a presence. And what we see in some of our densest markets, where we have the most established store footprint, like New York, Chicago, Boston, Dallas. These are areas that continue to see high growth within those geos, both from our store sales, but also e-com. So when we have more of a presence in a market, there's more awareness. Our marketing is more effective, and we tend to see the benefit of that over time. And so, we're excited and see lots of opportunity to continue to open stores, both in existing markets and some of the new markets that we don't have a presence in yet. The new aspect of this strategy, and you mentioned it just a moment ago, is the Target shop-in-shops, and you've opened a couple of those this year, five planned for the year. I know it's very early, but is there anything that you can share regarding the performance of those stores and what you see as the opportunity ahead? Yeah, we've been really excited about this partnership. You know, for one thing, we have great partners in Target, and we've been able to build, right, the equivalent of a Warby Parker store. So you walk in, it feels exactly the same as a Warby store. The shelving systems, the assortment is the same. It's staffed by Warby Parker employees. The revenue is recognized by Warby Parker, and they use the technology of our point of sale, or what we call Point of Everything, that we've developed in-house. And we're getting great results from the initial five locations, and most importantly, just gotten great feedback from our customers. That's great to hear. One question that we get very regularly about your stores is what the underlying comps are of those stores. Is there anything that you can help us regarding, like, the typical underlying comp of a new store as it starts to go through the maturity curve, both in its early days and as it gets quite older? And then how are you thinking about getting customers into the store when you open a new store? What proportion of those sales are driven by new customer acquisition versus stronger sales from existing customers? So what you'll continue to see is us continue to invest in marketing to raise brand awareness. You know, often when we hear potential customers why haven't they purchased from us, it's because there isn't a store nearby them. So you'll continue to see us open more stores. As Dave mentioned, there's almost 45,000 optical shops in the U.S., and convenience is certainly important, and all the large optical players have well over 1,000 locations. You know, when we open in a market, we tend to get welcomed by that local community. We often commission artwork from a local artist, we get featured in local press and celebrated. We continue to see similar ramps as we've seen, you know, over the last 15 years as we open up stores. As Dave mentioned, we're increasing our densification, particularly in suburban markets, because when we started opening up stores, you know, we had the benefit of our large e-commerce business, and we started to focus really on sort of these urban, sort of cool street locations, whether it was Greene Street in Soho or Abbot Kinney in L.A. or Hayes Valley in San Francisco. We've now been able to sort of move out more into the suburbs, where we're in lifestyle centers or even grocery-anchored centers, which is nice because they tend to be lower rent. You know, we continue to have a lot of drivers of retail productivity. One is just the mix of products. From a progressive standpoint, these are the lenses that help you see in the distance and up close, and we tend to see higher progressives mix in our suburban locations, and these products are more expensive and higher margin. We are still in the early days of our eye care business, so all of our new stores have eye exam suites, and we now have hundreds of optometrists that work for us and across the industry, 75% of people buy glasses where they got their eye exam. So, we are just at the beginning of being known for having a great eye exam experience, and some of our technology heritage also contributes to that, in that we have top-of-the-line equipment, we have software that we've developed in-house to make our optometrists very efficient and also makes them want to come and work for us, so that way they can focus on clinical care and spend less time on the administrative tasks of being an eye doctor. We're also still at the early days of our insurance business and becoming more in-network with more and more networks. So all of these things are contributing to retail productivity and driving comps both today and in the years ahead. Let's dig a little bit deeper into a couple of those drivers. You mentioned eye exams and what you're doing to engage your customer, but also make sure that you have great employees in each of those stores. What's the largest unlock for incremental eye exam growth from here? I think the main thing is just awareness, so we find that many of our customers who have been loyal customers for years aren't aware of many of the new store locations that we've opened. Some of them aren't aware that we offer eye exams at all or in their city, and so there's a big effort underway just from a marketing and awareness standpoint just to let people know that, you know, while last time you bought glasses from Warby Parker, we told you you had to go to a non-Warby Parker doctor and bring us your prescription, now we can serve those needs concurrently, and we can do so very conveniently. And if you have contact lenses and if you're looking for certain kinds of lenses that we maybe didn't offer previously, we now offer those. And so the biggest thing is just creating more awareness in the market. The second is continuing to open more stores, and every one of our new stores we're building out with eye exam suites, sometimes multiple eye-exam rooms. The third is increasing penetration and awareness around our insurance offerings, where many customers and patients start their exam journey by going to their insurance portal and seeing which doctor is in-network. And now we're able to meet the demand of many of those types of customers and patients. And the last piece is continuing to hire some of the best doctors in the country, in the world, and we're becoming known as a great employer for optometrists. Our stores are located in places where eye doctors want to live. We're using state-of-the-art equipment in all of our exam rooms, including leading retinal imaging and enabling doctors to leverage this technology to serve patients better. And then a lot of our software capabilities and the customer experience that we've enabled in our stores enables doctors to really focus on patient care. And they can rely on our software platforms and our store teams to serve customer needs and handle a lot of the tasks that often eat up time that takes them away from patient care other places, and so I think all those factors are leading to, you know, us increasing the number of locations and kind of the supply side of eye care, and then are pairing that with lots of marketing and awareness and demand-generating activities. Those things are working, and our eye exam business is growing really quickly. We're still massively underpenetrated relative to the rest of the category, and so still lots of opportunity ahead for us. You've recently expanded your insurance partnerships. What proportion of customers that are in your potential network today are coming to Warby Parker? And what do you think the opportunity is over the course of the next couple of years, and specifically, insurance is about 7% of your business in 2024. What do you think that can be over the course of the next one to three years? Sure. Most optical retailers, right, so bulk of their business, you know, will remain pretty underpenetrated, and we still provide exceptional value because the average sort of out-of-pocket sort of for our customers that are shopping elsewhere using their vision insurances is over $200. So, again, what we always want to be doing is providing exceptional value. So we're able to do that, even though on a relative basis, you know, we're have a smaller sort of insurance-based business. But, you'll continue to see us be in more plans, and then it will continue to take time for those members to learn that we're in network, and then, of course, for their sort of purchase cycle to hit. But we think that we're still in the very early innings of our vision insurance business. Very clear. You mentioned the importance of providing exceptional value to your customer, both for the insurance customer and for your pay out-of-pocket customer. Pricing has been top of mind for a lot of the industry, and you took a few pricing actions earlier in April. Are you seeing any pushback or elasticity to those pricing actions? And how should we be thinking about your pricing plans for the rest of the year and into 2026? Is there more on the horizon? Yeah, ever since we've launched, we've made a commitment to our customers that we're going to deliver exceptional value, and that was inherent in the price of the prescription glasses that we introduced back in 2010. Like the ones that I'm wearing cost $95, including prescription lenses and all the coatings that you would need, free shipping, free returns. We still offer these glasses for $95 today, 15 years later, in a category that has liberally taken price almost every year, very consistently, and there's been a lot of inflation in the category that has led to our value differentiation being much stronger today than it was even when we launched in 2010. We expect that commitment to continue. There certainly, w e've had lots of opportunities over the years, including you know, when inflation was going up a few years ago, to take price, and we chose not to do so. When the tariffs were announced on Liberation Day, some of our cost inputs changed, and that did cause us to take a fresh look at the pricing of all of our products. We looked at a small number of SKUs where we thought we could adjust our prices, raise prices slightly, but still offer exceptional value relative to the rest of the category. So we made those pricing changes while we left the majority of our pricing where it has always been. We really didn't see a change in elasticity from our customers, or... really didn't see kind of any pushback or questions, and I think that's because we were still able to commit to our messaging around offering a better value than other options. And that enabled us to mitigate yeah a significant portion of the tariff increases and enabled us to you know continue to offer great value to our customers. And currently, we're not planning to make any additional pricing changes at the moment. Very clear. You mentioned tariffs, so let's go there for a moment. How should we be thinking about the annualized headwind from tariffs on a fuller basis once it's fully in? And at what point do you expect to fully mitigate the currently enacted rates? We feel that we've now fully mitigated them, and that's been incorporated into our guidance. You know, I think when they first came out in April, we jumped into action. Unfortunately, we had a bunch of muscle memory from COVID, but we took three actions. One was, as Dave was describing, sort of select and strategic price increases. We also realigned parts of our supply chain, which is sort of more nimble, thanks to the learnings from COVID. We also have two optical labs here in the U.S., where we cut our lenses, insert them into our frames, ensure that Warby Parker hands are doing the final quality inspection that go to customers. We were able to manage from a supply chain standpoint, and then sort of made some OpEx reductions. Now we feel like we've been able to fully mitigate the impact of tariffs, and we'll continue to be on a path to expand EBITDA. Our plans over the last few years has been, how do we expand EBITDA 100- 200 basis points? We think long term, we're at 20% EBITDA business, and are on a path to get there. You do believe that one to two points of annual expansion is still achievable, even in the current environment? Yeah, absolutely. That 20% is still achievable? Yep. Very clear. Thank you. How should we be thinking about the key levers of driving that? Is that incremental SG&A leverage on top of what you've already delivered this year, or do you expect gross margins to begin to grow? Yeah, the primary leverage on SG&A. You know, we have stability in gross margin around in the mid-50s%. And as a reminder, our gross margins are fully loaded with retail occupancy with the sort of salaries that we pay our optometrists, for example. Very clear. Let's go to one of the more exciting partnerships in the business today, which is your partnership with Google, as you look to develop some smart glasses. What are the most differentiated aspects about your smart glasses initiative relative to what is also in the marketplace from potential competitors? And how are you thinking about that competitive differentiation that you're going to serve to customers? How are you going to message that, and what should we be expecting? Yeah, so we're excited to share a lot more about our product roadmap in the coming months. But these are gonna be really incredible products that look and feel like Warby Parker glasses, designed for all-day wear, designed to be used with prescriptions or non-prescription lenses. And the biggest kind of difference from a use case standpoint is the AI is gonna be incredible, and the user experience is gonna provide so much utility for wearers on an all-day basis. And I think some of the you know existing products on the market today show that there is demand for you know glasses that have additional technology in them. Our understanding is that the primary use cases are really to replace AirPods, or take hands-free photos, and our products will do that exceptionally well. But the reason that we were really excited to partner with Google is because of their AI capabilities, you know, throughout their organization, with Gemini and DeepMind, and they've really invented the technology that all LLMs are based on, and they continue to innovate in really meaningful ways. And they also have such massive capabilities across hardware and software. With their Android platform, they power billions of devices. Users will be able to tap into products that they use every day, from Gmail to Google Maps, Search. And so whether you're kind of, you know, if you wake up and you're used to kind of, you know, picking up your phone or logging into your computer to check your email and texts, you can imagine a world where you don't have to do that anymore, that you can just, you know, put on your glasses and walk down the street, and the software will surface the relevant messages. You can respond to them on the go. If you, you know, see a sign about something, or a building, or you're curious what kind of tree you're looking at or what kind of bird you hear chirping, you can get intelligence and context around the real world about you. You can be speaking to someone in a different language and have real-time translation. If you're looking at a form that you're filling out and you don't remember your Marriott Bonvoy number, it'll have integration with your Gmail and be able to pull that number out for you. So, we're really excited for these products. We think that they're gonna be really transformative in terms of how people engage with technology and will enable them to stop being tethered to kind of pulling a screen out of their pocket or engage more with the real world. Very exciting. I'm excited to try them on when they finally launch, of course. You've mentioned AI as part of the reason why you're excited about the smart glasses, but how are you integrating AI into your business, and what are the near-term and longer-term opportunities that you see? You know, we sort of have been leveraging AI across the business for many years now, whether it was developing the first sort of true-to-scale virtual try-on for eyeglasses, right? It was a major technological challenge to fit a pair of glasses on somebody's face virtually, like, very different than applying makeup, because you had a third-party object that needed to sort of fit and understand your pupillary distance, where your nose bridge sits, where your ears are. So we have a strong history of leveraging AI, but now we sort of leverage it across the organization, where we have what we call AI visionaries embedded in every single team across our corporate organization, that are vibe coding and are finding ways to be more efficient and productive, whether it's using AI in eyewear design or creating an AI agent that speaks in the Warby voice. So our copywriters can be more focused on interesting marketing activations versus writing product descriptions, for example. Literally, every aspect of our company is being rethought and reimagined, you know, leveraging this incredibly powerful technology. Let's go back to your core for a moment. You started with a single vision lens, a couple of decades ago now, and you're wearing them. How should we be thinking of what is the core growth rate that you're seeing in single vision glasses today, and what's your expectation on a medium-term basis? Yeah, we continue to see strong growth in our glasses business and single vision business. If you look back at Q2, you know, April was soft for the reasons that we spoke about related to consumer sentiment and behavior post-Liberation Day, but after that, the trends that we were seeing across the business, including in glasses and single vision, were quite strong and enabled us to deliver double-digit growth for glasses in Q2, and so if you kind of ring-fence April, stronger growth than that, and we're expecting that to continue. We see lots of opportunities to continue to expand our customer growth from a new customer standpoint. We still have less than 2% market share in a really big category. Our customers that do make a purchase from us tend to be really happy and tend to repeat on a very consistent timeframe. And so, we still see lots of future growth for our single vision business. Very clear. You talked a little bit about some of the near-term trends that you've seen in April through the end of the second quarter. Your guidance in the back half calls for sustained 17% momentum, and that's in an environment where a lot of other companies are calling for a lot more conservatism and caution into the back half. What gives you so much confidence in achieving that back half guidance range? And are there any comments that you can provide on back to school, knowing that your back to school business is not necessarily a large driver? If you look back, you know, really over the last four quarters, you know, going back to the back half of last year and the first half of this year, we've really seen kind of strong and consistent demand trends other than a couple air pockets, including Liberation Day and when there was some extreme weather. But outside of those macro effects, which were relatively short-lived, we've seen consistency and strength from a demand standpoint, and that's given us confidence to lean in from a marketing standpoint. And our marketing is working, and we have the advantage of being a direct consumer, so we get such rapid signals around what's working and what's not, and how to optimize. We're increasingly using AI to make those marketing capital allocation decisions and really shift dollars where we're seeing the most efficiency. So, just based on, you know, the trends that we've seen, not just kind of post-April, but really going back over the last 12 months, just gives us the confidence that demand will continue to be there in the category. That has historically been a category that has very consistent demand outside of the pandemic period and the hangover. And we believe that we're kind of back to that steady state where we continue to lean in grow faster than the category because of all the initiatives that we have around opening stores generating awareness through marketing insurance continuing our penetration around exams contacts glasses progressives single vision. We just have lots of growth drivers that we have confidence will work and continue to enable us to grow and in the high teens. Very clear. You've mentioned marketing several times now, and marketing has been a big opportunity from an awareness perspective, especially in terms of a store driver for some time. What's changed in your marketing, whether that's, you know, out-of-home, in-home, digital, non-digital, and do you think that low teens as a percentage of revenue is the right level longer term? Yeah, I think you'll see consistency as marketing as a percentage of revenue, but obviously, the absolute dollars will continue to increase. One of the big things that we announced is that we're sunsetting our home try-on program, and you know, it sat within our marketing line item. We'll continue to spend those dollars, but they'll be more focused on customer acquisition. You know, it's bittersweet to be sunsetting the home try-on program, but we no longer need it, given the strength of our virtual try-on, given our 300 locations. Speaking of which, our 300th is right here at Brookfield Place. So if you have a chance to check it out, please, please do. And when we launched in 2010, GQ called us the Netflix of eyewear, and that was when Netflix was sending DVDs to people's homes because we had this home try-on, right? We shipped people five pairs of glasses to try on at home. And just as Netflix has sort of made the move to streaming, you know, we no longer see a need for our home try-on program. But in general, we continue to see, you know, great performance across our channels, whether that's linear and streaming or even direct mail or paid social. One of the things that we were excited to launch this past week was our partnership with Arch Manning. And that's in a long line of very authentic collaborations that we've done. Arch is a longtime glasses wearer. He's a longtime Warby Parker customer. So our ads include images of him as a child wearing glasses, sometimes even within the football helmet, and just how we were part of the sort of conversation, you know, during sort of the opening weekend for college football. But you know, you'll continue to see us, you know, invest in the brand, and continue to be part of the cultural zeitgeist. Great. And final question for you, CapEx and capital allocation priorities. Your CapEx spend has hovered in $50 million-$65 million the last couple of years, but has been creeping up a little bit. What's the right level for CapEx as a function of the needs of the business that you see today, and how should we be thinking about capital allocation? Yeah, so we don't think there'll be any, you know, material deviations from the trend that you've seen. We'll continue to open stores, which require capital, but, you know, our stores are quite capital efficient. We continue to target paybacks in under 20 months. We also see opportunities to invest in technology and software and AI, and we've always been a technology-driven brand, and that will continue. And the new area of spend is around AI glasses. This is a massive new TAM and massive new opportunity. We feel fortunate to be partnering with Google, and as part of our partnership, that they'll be covering some of our expenses to stand up these new products. And that goes to both product development, but also the experience that we'll be able to sell these glasses in our stores, the new fixtures, the demo experience. We believe that our stores are the ideal environment for customers to come in and try on and demo this new category of products, and so that will require some spend, but a lot of that will be supported from Google. Great. Well, with that, we're out of time. Thank you, Neil. Thank you, Dave, and thanks for all the audience for tuning in. Thank you. Thanks for having us.