VANCOUVER, BC, Aug. 12, 2021 /CNW/ - Kits Eyecare Ltd. (KITS) (TSX: KITS) (OTCQX: KTYCF), a digital eyecare platform inspired by the beauty of Kits beach, where the Pacific Ocean meets the rainforest and snow covered mountains of Vancouver, British Columbia has released its financial results for the second quarter of 2021.
Second Quarter 2021 Highlights
- First half 2021 revenue was $42,101,000, an increase of 21% compared to the same period last year. On a constant currency basis, first half 2021 revenue grew by 28% year-on-year
- Record 2Q 2021 revenue, reaching $21,669,000, an increase of 7% compared to 2Q 2020. On a constant currency basis, 2Q 2021 revenue grew by 16% over 2Q 2020
- Orders delivered grew by 27% vs. 2Q 2020 and 15% vs. 1Q 2021 demonstrating our ability to grow and retain customers in a post COVID environment
- Record 43,000 eyeglasses delivered in 2Q 2021, up 8x compared to 2Q 2020
- Delivered our first 100,000 pairs of prescription eyeglasses
- KITS generated over 45% more in revenue per Autoship customer compared to our average non-subscription contact lens customer in the last twelve months
- Gross margins in the quarter were 22% as we maximized all levers for acquisition in the first half
- First half 2021 net loss of $8.4 million, which includes IPO related costs of $1.5 million, share-based compensation expense of $0.7 million, and brand investment of $2.4 million from proceeds earmarked from our IPO
The second quarter was a key strategic investment period as we completed the build out of our new state-of-the-art optical lab, with the ability to produce both single vision and progressive lenses and glasses. Our strong second quarter revenue and exceptional order growth reflects our continued investment to acquire first time glasses patients and move our contact lens patients from transactional to recurring subscription revenue. We believe our best use of capital is to acquire new glasses and subscription customers now as consumers are changing their traditional buying behaviors. These are long-term investments to drive financial performance and growth.
Our strong order volume in the second quarter reflects the success of our investment strategy. We organically grew orders by 27% compared to 2Q 2020. We delivered a record 43,000 pairs of eyeglasses to patients in 2Q 2021 as compared to 5,000 eyeglasses in 2Q 2020, an 8-fold increase in a year, and we delivered our 100,000th pair of prescription glasses.
The transition to our 'giga' lab, within our new fulfillment center, occurred a month earlier than planned and pairs manufacturing with fulfillment enabling us to provide superior speed of service to our customers as we maintain one of the largest contact lens and glasses inventories in the optical industry. We expect to complete two additional new production lines in the second half of the year, which will expand production capability to meet growing demand.
In the second quarter, we delivered 136,000 contact lens orders, a 17% increase over the prior quarter. The strong growth in order and reorder volume was driven by our continued investment in expanding our inventory selection and improving speed to customers via logistics and fulfillment improvements. We are constantly refining our Autoship subscription introductory and program offers to both attract new subscribers and increase subscriber retention as we balance revenue and margin growth. Our new customer growth outstripped growth in our Autoship program which represented 20% of contact lens orders this quarter. In addition, overall revenue from repeat customers rose slightly to 66% in the first half of 2021 relative to 65% for the full year 2020.
In summary, 2Q 2021 was another record quarter in terms of adding predictable recurring revenue and new glasses customers, with a strong long-term margin profile. We believe the combination of building the largest subscription business in the category paired with the lowest cost of eyeglasses production is strategically critical as patients continue to move online in search for better and more cost-effective ways of buying eyewear. The balance of the year will be centered on continuing to improve our offering, service times, and satisfaction numbers.
https://www.newswire.ca/news-releases/kits-achieves-another-record-quarter-as-q2-patient-orders-rise-27-and-first-half-2021-revenues-rise-21-year-on-year-to-42-101-000-855151224.html