Tariffs took centre stage during Warby Parker’s latest earnings call, with company leaders outlining the steps they’re taking to shield the business from rising costs tied to global trade tensions.
Co-founder and co-CEO Neil Blumenthal acknowledged the challenging environment, but noted the company is no stranger to volatility. “We’ve faced dynamic environments like this before,” he said.
Amid US tariffs of up to 145% on Chinese imports and a global baseline of 10%, Warby Parker has already begun restructuring its supply chain to reduce exposure.
The company is working to reduce the proportion of its cost of goods sold that stems from China, aiming to bring it down from around 20% to below 10% by the end of the year.
As part of that plan, Warby Parker is reallocating frame production from China to manufacturing partners in Europe and other parts of Asia. Lens production is also shifting, with a greater share now being sourced domestically within the US.
Customers are beginning to feel the effects. The company has rolled out selective price increases as another measure to offset the tariff impact.
Co-founder and co-CEO Dave Gilboa said that certain lenses and accessories saw price hikes in late April, translating into a low single-digit increase across the business overall.
Still, the eyewear firm is pressing forward with its marketing spend, capitalising on reduced competition as other brands scale back. At the same time, it is tightening its belt in other areas, including slowing down hiring activity.
Chief Financial Officer Steve Miller estimated that, without these changes, the current tariff structure could result in a $40 million to $50 million gross impact. But with mitigation strategies now underway, the company expects to significantly limit that exposure.
The tariff discussion follows an earlier announcement from February, when Warby Parker revealed plans to expand through a new retail channel by opening shop-in-shops with Target.
Five of these mini-locations are set to launch in the second half of the year, each staffed by Warby Parker employees and offering eye exam services.
“This strategy is really going to be a continuation of what we do every single day,” said Blumenthal. “We’re going to learn a lot in the first five stores, and that will help us grow going forward. We view this as complementary to our stand-alone store growth.”
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