National Vision (EYE) Q2 2024 earnings summary

Executive summary

• Q2 2024 net revenue rose 4.6% year-over-year to $452 million, driven by new store sales, comparable store sales growth, and increased customer traffic.

• Adjusted comparable store sales grew 2.4%, with America's Best up 2.9% and Eyeglass World down 0.5% but improving sequentially.

• Net loss for Q2 2024 was $3.1 million, impacted by discontinued operations and higher asset impairment charges; adjusted diluted EPS was $0.15.

• Transformation initiatives include leadership changes, a comprehensive store fleet review, and expansion of remote exam capabilities to nearly 600 stores.

• Walmart and AC Lens businesses exited and now reported as discontinued operations, with related wind-down expenses and net losses.

Financial highlights

• Adjusted operating income for Q2 2024 was $14.1 million, up 13.8% year-over-year; adjusted operating margin improved to 3.1%.

• Adjusted diluted EPS for Q2 was $0.15, up from $0.12 last year; adjusted EBITDA margin was 8.1%.

• Gross margin declined by 110 basis points due to a mix shift from eyeglasses to exams and fewer add-on purchases.

• Adjusted SG&A as a percentage of revenue decreased by 120 basis points, aided by lower incentive compensation and advertising costs.

• Year-to-date net revenue was $934.5 million, up 4.2% year-over-year; operating cash flow was $75.4 million.

Outlook and guidance

• FY2024 revenue guidance revised to $1.82–$1.865 billion, with adjusted comparable store sales growth of 0.5%–1.5%.

• Adjusted operating income expected at $57–$75 million and adjusted diluted EPS at $0.45–$0.50.

• Operating margin for the back half expected to be flat to up 50 basis points; Q3 expected to be stronger than Q4.

• Capital expenditures projected at $110–$115 million for 2024.

• FY2025 operating margin now expected to be similar to 2024, with a return to mid-single digit margins taking longer than planned.