National Vision (EYE) FY 2025 Conference September 03, 2025 01:50 PM ET Speaker0Good afternoon, everyone. It's my pleasure to introduce National Vision to this afternoon session. Today, we have with us Alex Wilkes, Chief Executive Officer newly minted Chief Executive Officer. It's so nice for you to be here.Speaker1Thank you.Speaker0And Chris Layden, Chief Financial Officer. And we'll kick it off with maybe just a lay of the land with the health of the consumer. I mean you guys have a lot going on with your ...

Core Message - National Vision Holdings, Inc. is launching a rebranding campaign for America's Best, emphasizing the commitment to affordable and high-quality eye care for all Americans under the slogan "Every Eye Deserves Better" [2][4]. Group 1: Brand Reintroduction - The rebranding is described as a complete reinvention of America's Best, featuring a new logo and visual identity that reflects both sophistication and approachability [2]. - The new visual design incorporates elements of American heritage, including a fashionable reinterpretation of American stripes and colors, along with a nod to the brand's owl mascot [2]. Group 2: Marketing Strategy - The launch includes a film that showcases the importance of clear vision in everyday life, aiming to connect emotionally with both existing and potential customers [3][4]. - The media strategy for the campaign involves placements across major cable and streaming platforms such as Disney, Tubi, YouTube, and Google [4]. Group 3: Company Overview - National Vision Holdings, Inc. operates over 1,200 stores across 38 states and Puerto Rico, focusing on making quality eye care and eyewear more accessible [5]. - The company manages multiple retail brands, including America's Best and Eyeglass World, and offers an e-commerce platform for eye care products [5].

Financial Performance - National Vision reported revenue of $486.42 million for the quarter ended June 2025, reflecting a year-over-year increase of 7.7% [1] - The earnings per share (EPS) for the quarter was $0.18, up from $0.15 in the same quarter last year, indicating a positive trend in profitability [1] - The reported revenue exceeded the Zacks Consensus Estimate of $468.11 million by 3.91%, showcasing a strong performance against market expectations [1] Key Metrics - Adjusted comparable store sales growth was 5.9%, significantly higher than the two-analyst average estimate of 2.8% [4] - Net revenue from the Owned & Host segment, Eyeglass World, was $49.11 million, surpassing the average estimate of $47.15 million, although it represented a slight year-over-year decline of 0.8% [4] - Net revenue from the Owned & Host segment, America's Best, reached $416.78 million, exceeding the average estimate of $405.28 million, with a year-over-year growth of 9.2% [4] Stock Performance - Over the past month, shares of National Vision have returned -5.4%, contrasting with the Zacks S&P 500 composite's increase of 1.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Second Quarter 2025 Financial Results August 6, 2025 NASDAQ: EYE Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements contained under "Fiscal 2025 Outlook," as well as other statements related to our current beliefs and expectations regarding the performanc ...

Accessibility StatementSkip Navigation Experience the full interactive Multichannel News Release here: https://www.multivu.com/national-vision- holdings/9348251-en-national-vision-brand-refresh-strategic-transformation "As we continue to evolve to meet the needs of today's consumers and patients, it's important that our corporate brand reflects who we are and where we're headed," said Alex Wilkes, CEO at National Vision. "This new identity is more than a visual evolution—it's a powerful expression of our pu ...

Core Insights - National Vision Holdings, Inc.'s America's Best brand is driving revenue growth, supported by the strength of managed care and favorable optical retail industry trends [1][3][7] - The company has experienced a significant stock price increase of 75.6% year-to-date, outperforming the industry and the S&P 500 [2] - National Vision's strategic transformation focuses on addressing optometrist shortages and enhancing customer experience through segmentation and digitization [5][7] Financial Performance - National Vision has a market capitalization of $1.81 billion and has consistently beaten earnings expectations, with an average surprise of 81.81% over the last four quarters [2] - The Zacks Consensus Estimate for 2025 earnings per share is 62 cents, with projected revenues of $1.94 billion, indicating a 2.9% year-over-year improvement [9] Growth Drivers - The America's Best brand is enhancing its value offerings through promotions and exclusive partnerships, contributing to revenue growth [3][7] - The company has implemented remote examining capabilities, allowing for increased examination capacity and a 3.1% growth in comparable store sales in Q1 2025 [4][5] Challenges - National Vision faces a weak solvency position, with cash and cash equivalents of $80 million against short-term debt of $101.5 million, raising concerns amid macroeconomic pressures [6][8] - Rising expenses, particularly a 6.4% year-over-year increase in SG&A expenditures, are impacting profitability in a challenging economic environment [8]

National Vision (EYE) FY Conference Summary Company Overview - National Vision operates in the optical retail industry, offering three main products: eye exams, eyeglasses, and contact lenses [3][4] - The company is positioned as a low-cost provider in a fragmented market, which generated $70 billion in sales last year across 45,000 retail outlets [4][5] - National Vision has over 1,200 stores and reported $1.8 billion in sales last year [5][6] Key Points and Arguments Business Model and Market Position - National Vision emphasizes its value pricing strategy, catering to a demographic that is increasingly reliant on insurance for eye care [5][6] - The company has the largest collection of employed optometrists in the nation, which is expected to play a larger role in healthcare as demand for eye care services increases [5][6] Post-COVID Transformation - The company faced challenges post-COVID due to a reduction in the availability of medical professionals, impacting the ability to conduct eye exams [7][8] - National Vision implemented a remote medicine approach, allowing optometrists to conduct eye exams from home, which has improved efficiency [9][10] Strategic Initiatives - A new management team was brought in to lead a transformation focused on expanding target demographics, revising pricing strategies, enhancing customer experience, and optimizing cost structures [10][12] - The company aims to increase its addressable market by targeting managed care consumers, progressive lens users, and outside prescription consumers [17][18] Financial Performance - In Q1, National Vision reported a 5.7% increase in net revenue and a 21.8% increase in adjusted operating income [30][31] - The company raised its guidance for 2025, projecting a same-store sales growth of 1.5% to 3.5% and adjusted operating income between $81 million and $92 million [31][33] Marketing and Customer Engagement - National Vision is modernizing its marketing approach to better target its evolving consumer base, moving away from a one-size-fits-all strategy to a more personalized experience [26][27] - The company is enhancing its in-store experience and training staff to better engage with consumers who have insurance benefits [21][22] Product Assortment and Pricing - The company plans to increase the percentage of its frame assortment priced above $99 from 20% to 40% by the end of 2025, aligning with the purchasing power of its target demographic [23][24] - New premium brands are being introduced to attract higher-income consumers [24][25] Additional Important Insights - National Vision conducts over 7 million eye exams annually, with a significant portion of consumers engaging through their online platform [36] - The management team expresses confidence in the company's transformation and growth potential, highlighting a strong organizational culture and commitment to innovation [28][29][35]

Core Viewpoint - The "individual to enterprise" reform in Lianyungang's Ganyu District has effectively addressed the challenges faced by individual business owners in transitioning to corporate entities, resulting in 21 businesses achieving seamless upgrades this year [1][4]. Group 1: Service Improvements - Ganyu District has established a dedicated service window for "individual to enterprise" transitions, providing comprehensive guidance and assistance to address information asymmetry and procedural clarity [3]. - The district has implemented a "one-time completion" model for the transition process, allowing individual business owners to retain their original business names and social credit codes, ensuring a smooth administrative license change [3][4]. Group 2: Feedback and Continuous Improvement - The district's data bureau conducts follow-up calls to gather feedback from businesses that have undergone the transition, aiming to optimize the licensing connection mechanism and enhance service efficiency [4]. - The integration of various licenses, such as food and drug operating permits, into a single application process has been emphasized, promoting a streamlined service experience for individual business owners [4]. Group 3: Future Plans - Ganyu District plans to continue enhancing its "individual to enterprise" services by simplifying processes and improving service quality, with the goal of fostering market vitality and supporting high-quality regional economic development [4].

Financial Data and Key Metrics Changes - Net revenue increased by 5.7% to $510 million, driven by adjusted comparable store sales growth of 5.5% [30][12] - Adjusted operating income rose by 21.8% to $41.3 million, with adjusted diluted earnings per share increasing to $0.34 from $0.29 [14][35] - Gross margin improved due to higher average ticket growth, with cost applicable to revenue decreasing by 30 basis points to 40.2% [32][33] Business Line Data and Key Metrics Changes - America's Best comparable store sales grew by 5.9%, while Eyeglass World saw a 3.1% increase, marking its best quarter since 2021 [13][12] - All three target customer segments delivered double-digit comparable store sales growth, indicating strong performance across the board [12][11] Market Data and Key Metrics Changes - The company experienced a shift towards higher-income customers, with managed care customers showing resilience amid economic challenges [58][11] - Customer transactions increased by 0.7%, recovering from previous declines, indicating a positive trend in customer engagement [31] Company Strategy and Development Direction - The company is focused on segmentation, personalization, and digitization to enhance customer experience and drive sales [20][10] - A new strategy targeting underdeveloped customer segments aims to expand the addressable market and improve profitability [11][10] - The leadership transition is positioned to maintain momentum in the ongoing transformation strategy [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformation strategy, noting strong initial results from new initiatives [15][20] - The company is cautious about predicting consumer demand due to macroeconomic uncertainties but remains optimistic about its strategic direction [15][39] - Management highlighted the importance of cost efficiency measures in response to potential tariff impacts [38][40] Other Important Information - The company plans to open approximately 30 to 35 new stores while closing seven America's Best stores as part of its real estate management strategy [39][31] - Investments in remote exam technology and a new ERP system are expected to enhance operational efficiency [36][28] Q&A Session Summary Question: What is the expected run rate for ticket growth in the coming quarters? - Management indicated that ticket expansion has been positive, with no degradation in conversion rates, suggesting further growth potential [48][50] Question: How is revenue growth split between managed care and customer pay? - Management noted that both segments are contributing to growth, with premium products appealing to managed care customers [51][52] Question: Can you provide insights on the traffic increase during the quarter? - The increase in traffic was attributed to better engagement with target customer segments, particularly managed care and progressive customers [97][98] Question: What is the impact of tariffs on product costs? - Management confirmed that tariffs could result in $10 million to $15 million in incremental costs, but they believe these can be mitigated through pricing actions [72][38] Question: How is the company addressing recruitment and retention of optometrists? - Management reported healthy retention rates and effective recruitment strategies, particularly among new graduates [82][81]

Financial Performance - Net revenues for Q1 2025 increased by 5.7% to $5103 million, compared to $483 million in Q1 2024[12, 16] - Adjusted comparable store sales growth was 55% in Q1 2025, driven by higher ticket prices and a slight increase in traffic[12, 18] - Adjusted operating income increased to $413 million in Q1 2025, compared to $339 million in Q1 2024[12, 23] - Adjusted diluted earnings per share increased to $034 in Q1 2025, compared to $029 in Q1 2024[12, 27] Store Network - The company's store count grew by 30%, ending the period with 1237 stores[20] - Nine new America's Best stores were opened, while nine Fred Meyer stores and three America's Best stores were closed[20] Brand Performance - America's Best saw adjusted comparable store sales growth of 59% in Q1 2025, compared to 12% in Q1 2024[21] - Eyeglass World experienced adjusted comparable store sales growth of 31% in Q1 2025, compared to -50% in Q1 2024[21] Financial Outlook for Fiscal Year 2025 - The company estimates net revenue between $1919 billion and $1955 billion for fiscal year 2025, including an estimated $35 million contribution from the 53rd week[44, 38] - Adjusted comparable store sales growth is projected to be between 15% and 35% for the 52 weeks ending December 27, 2025[44] - Adjusted operating income is expected to be between $81 million and $92 million, including an estimated $3 million contribution from the 53rd week[44, 43] - Adjusted diluted EPS is projected to be between $059 and $067, assuming approximately 79 million shares[44]