Company: WRBY
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001504776-25-000010
Chunk: 10

Company: Warby Parker Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 10
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 opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

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Excess and Obsolete InventoryDescription of the MatterAs discussed in Note 2 of the consolidated financial statements, net inventory totaling $52.3 million as of December 31, 2024 is stated at the lower of its cost or net realizable value. The Company records adjustments when the cost of inventory is not expected to be fully recoverable.Auditing management's estimates of the net realizable value of its inventory, specifically its adjustments for excess and obsolete inventory, involved a higher degree of auditor judgment as the estimate is dependent on expectations about current and expected market trends and economic conditions, forecasts of future demand, and estimated timing of product retirements.How We Addressed the Matter in Our AuditOur audit procedures included, among others, evaluating management’s expectations about future sales, testing the accuracy and completeness of the underlying data used in management's calculation of the net realizable value of inventory, and