Fannie Mae, Freddie Mac shares tumble after conservatorship comments
Tuesday, Warby Parker Inc. (NYSE:WRBY), currently trading at $18.86, experienced a revision in its financial outlook as UBS analyst Mark Carden adjusted the price target down to $20.00 from the previous $23.00, while the stock maintained a Neutral rating. According to InvestingPro data, six analysts have recently revised their earnings expectations downward, though the stock has shown remarkable strength with a 16% gain in the past week. The revision follows Warby Parker’s first-quarter results, which presented a mixed financial picture, and takes into account the potential impact of current tariff policies on the company’s profitability.
Carden’s analysis suggests that the tariffs, which were at 145% on imports from China and 10% for the rest of the world (ROW) at the time of Warby Parker’s earnings report, could have a significant "gross impact on the business" estimated between $45 million to $50 million. This impact, according to Carden, could result in approximately a 500 basis point gross margin impact if no mitigating actions were taken. Currently, the company maintains a healthy gross profit margin of 55.26%, though InvestingPro analysis indicates the stock is trading above its Fair Value, with notably high EBITDA multiples.
The report also notes a temporary easing of tensions, with China tariffs having been reduced to 30% for a 90-day period, which Carden views as a positive move towards de-escalation. Despite this temporary relief, the analyst anticipates that Warby Parker will still proceed with many of its planned mitigation strategies due to the unpredictable nature of tariff policies. The company has demonstrated strong business momentum with nearly 14% revenue growth in the last twelve months.
In light of these factors, UBS has revised its adjusted earnings per share (EPS) forecasts for Warby Parker. The firm now expects an adjusted EPS of $0.29 for fiscal year 2025, down from the previous estimate of $0.32. For fiscal year 2026, the EPS forecast has been reduced to $0.43 from $0.49, and for fiscal year 2027, the projection is now $0.57, down from the earlier $0.69 estimate.
The updated UBS report underscores the ongoing challenges Warby Parker faces in navigating the complex trade environment and its direct and indirect effects on the company’s financial performance and cost management strategies.
In other recent news, Warby Parker Inc. reported its Q1 2025 financial results, revealing an 11.9% increase in revenue to $223.8 million year-over-year, though this fell slightly short of the anticipated $225.46 million. The company’s earnings per share (EPS) were $0.03, which did not meet the forecasted $0.11. Despite these mixed results, Warby Parker’s adjusted EBITDA of $29.2 million exceeded analyst expectations, reflecting a 13.1% margin. Analysts from Telsey Advisory Group and Evercore ISI have both adjusted Warby Parker’s stock price target to $22, citing the company’s Q1 performance and broader economic conditions. Telsey maintained an Outperform rating, while Evercore ISI kept an In Line rating, highlighting the company’s market share growth and challenges such as tariffs and consumer sentiment. Additionally, Warby Parker continues to expand its retail presence, opening 11 new stores in Q1, the most for any first quarter. The company is also working on diversifying its supply chain to mitigate tariff impacts, which are expected to affect gross margins by 200-300 basis points in FY25.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.