Financial Data and Key Metrics Changes - In fiscal 2025, net revenue grew 9% to $1.99 billion, with adjusted comp store sales increasing by 6% [7] - Adjusted operating income rose 56% to $102.5 million, with an AOI margin expansion of 160 basis points to 5.2% [7] - For the fourth quarter, net revenue increased 15.1% to $503 million, with adjusted operating income at $17.6 million and an AOI margin of 3.5% [8][40] Business Line Data and Key Metrics Changes - The number of exams performed by the doctor network increased, contributing to healthy profit expansion [6] - Managed care comp sales grew in low double digits, with 42% of revenues attributable to managed care by the end of the year [10] - Average ticket growth was 6% for the year, driven by a shift towards more profitable customer cohorts [10][12] Market Data and Key Metrics Changes - Traffic declined 0.5% overall for the year, reflecting declines with self-pay customers, but strong traffic gains were seen with managed care and progressive customers [10] - The company experienced traffic growth in managed care, progressive, and outside RX customers combined during the fourth quarter [8][38] Company Strategy and Development Direction - The company is focused on four growth vectors: expanding with underdeveloped customers, evolving product offerings, enhancing customer experience, and new store growth [9] - A significant pivot was made to attract more profitable customer cohorts, particularly those using insurance [11] - The merchandising strategy is evolving to better meet the needs of higher-income demographics, with a goal to increase the mix of branded frames [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to continue expanding market share and improving profitability despite macroeconomic challenges [5][33] - The company anticipates continued momentum from transformation initiatives, with a fiscal 2026 outlook projecting net revenue between $2.03 billion and $2.09 billion [45] - Management noted that the cash pay consumer is expected to comp positively, with optimism regarding tax refunds and smart eyewear contributing to growth [56] Other Important Information - The company ended fiscal 2025 with a cash balance of $38.7 million and total liquidity of $332 million [42] - A new share repurchase authorization was approved for up to $50 million until December 28, 2030 [44] - The company plans to open approximately 30 to 35 new stores in fiscal 2026, with a net growth of about 20 to 25 stores after closures [46][47] Q&A Session Summary Question: Concerns about the trade-off between growth from insurance customers versus traditional customers - Management noted that while there was some slowing in cash pay customers, managed care consumers remain strong, and there is optimism for positive comps in 2025 [51][54] Question: How to assess the impact of tax refunds and smart glasses on guidance - Management indicated that cash in consumers' pockets is beneficial, and they expect smart eyewear to contribute positively to sales [57][59] Question: Insights on traffic dynamics between profitable target customers and traditional customers - Management acknowledged the multi-year strategy to shift customer cohorts, focusing on acquiring more profitable customers while managing the transition from cash pay consumers [66] Question: Impressive SG&A leverage and future cost management - Management highlighted that SG&A leverage was achieved through a mix of higher sales and cost-cutting measures, with ongoing efforts to optimize expenses [68][70] Question: Projections for a softer end market and its impact on business - Management expressed confidence in outperforming the market despite macro challenges, citing growth in eye exams and a strong brand strategy [75]