National Vision (EYE) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 rose 2.9% to $451.5–$452 million, driven by new store sales, managed care strength, and higher average ticket size, partially offset by softness in cash pay and e-commerce revenue.

• Adjusted comparable store sales grew 0.9%, with America's Best at 1.2% and Eyeglass World at -0.9%, while overall comparable store sales were up 1.4%.

• Net loss from continuing operations was $8.4 million, impacted by $13.7 million in asset impairment charges, while adjusted operating income reached $14.3 million and adjusted diluted EPS was $0.12.

• Store optimization initiatives include closure of 39 underperforming stores and conversion of 4 Eyeglass World stores to America's Best by 2026, targeting $4 million in adjusted EBITDA improvement.

• Transformation efforts focus on new product launches, expanded remote exam capacity, leadership changes, and operational improvements.

Financial highlights

• Q3 2024 net revenue: $451.5–$452 million (+2.9% YoY); YTD net revenue: $1.39 billion (+3.8% YoY).

• Adjusted operating income Q3: $14.3 million (+22.2% YoY); YTD: $62.3 million (+9.9% YoY); adjusted diluted EPS Q3: $0.12 (vs. $0.11 prior year).

• Gross margin decreased by 20 basis points to 42.1% due to higher optometrist costs, nearly offset by higher exam revenue.

• Adjusted SG&A as a percentage of revenue decreased 60 basis points to 49.8%, mainly from lower incentive compensation.

• Store count increased to 1,231, with 18 openings and 3 closures in Q3.

Outlook and guidance

• Fiscal 2024 guidance reaffirmed: net revenue $1.82–$1.84 billion, adjusted operating income $57–$62 million, adjusted diluted EPS $0.45–$0.50, and adjusted comparable store sales growth of 0.5%–1.5%.

• Capital expenditures outlook revised to $100–$105 million, with future moderation expected as capital is reallocated.

• Plans to open 65–70 new stores in 2024 and 30–35 in 2025, focusing on remote-enabled states and operational improvements.

• No material impact from store closures or conversions expected in 2024; majority of EBITDA benefit and revenue headwind in 2025.