Warby Parker, Launched as an Online Disrupter, Now Bets Big on Bricks and Mortar

“We expect most of our 2022 growth to be driven by our retail channel, as traffic and sales productivity rebound,” Mr. Blumenthal said.

Warby Parker projected net revenue would rise between 20% and 22% this year, compared with 37% growth in 2021. The company’s revenue forecast of $650 million to $660 million also came in below the $688.5 million expected from analysts polled by FactSet.

The outlook included the effect of about $15 million in lost sales related to the disruption caused by Omicron at the start of the year, the company said.

The eyewear seller is among several direct-to-consumer companies, many of which began as digitally focused businesses, placing the same bet on stores. Allbirds Inc., which reported that sales at physical retail locations more than doubled in 2021, opened 13 stores last year, bringing its total to 35. Everlane, whose founder Michael Preysman, once swore the company would go out of business before it got into bricks-and-mortar, now has nine stores.

The eyewear brand has aggressively pursued physical retail since opening its first store in New York City in 2013, adding 35 stores last year. The company has poured more attention into bricks-and-mortar selling because it is more profitable than its online business, and online penetration for the eyewear market remains low, said Anthony Chukumba, managing director at Loop Capital Markets.

“The original business model was that they were gonna become the Amazon of optical retailing,” Mr. Chukumba said. “What they very quickly found out was that just doesn’t work.”

Warby Parker’s approach has yet to translate into profits, as losses since its inception totaled more than $447 million as of Sept. 30. For the latest quarter, the company reported its net loss ballooned to $45.9 million from $4.3 million a year earlier, as it recorded an increase in stock-based compensation expenses and related payroll taxes. An uptick in marketing expenses also weighed on the company’s bottom line.

Other direct-to-consumer businesses also reported widening losses in the most recent quarter. Allbirds told investors last month that higher costs, including expenses associated with opening and operating its stores, were a drag on its finances. Wayfair Inc. reported its second consecutive quarterly loss, as the furniture seller dealt with the impact of inflation on shoppers and the shift of spending toward physical stores.

Warby Parker wants to benefit from the shift as well. The company’s stores are in high-traffic locations, and churn out tons of sales per square foot, Mr. Chukumba said. The company projects that expanding services, such as offering eye exams at new and existing locations, would add value to each site.

“Last year, we commissioned a third-party study that concluded our retail footprint has room to expand to over 900 retail locations in the U.S.,” Mr. Blumenthal said. “This is still a fraction of the 41,000 optical shops that exist today.”

Shares in the eyewear retailer opened Thursday trading down about 11%, but closed up more than 3% above $27. The company went public in September via a direct listing and the stock closed at $54.49 on its first day of trading.

In the fourth quarter, Warby Parker reported revenue increased about 18% to $132.9 million, shy of the FactSet consensus of $133.4 million. Fourth-quarter revenue was negatively affected by the Omicron variant, with disruption heightened in the last weeks of December, the company said. That coincided with peak demand in the optical industry as customers seek to use flexible spending dollars ahead of Dec. 31 expirations.

—Michael Dabaie contributed to this article.

Write to Charity L. Scott at [email protected]