• Fourth Quarter Revenue: Increased 3.9% to $437.3 million.
• Adjusted Comparable Store Sales: Increased 1.5% in Q4.
• America's Best Comparable Store Sales: Growth of 2% in Q4.
• Eyeglass World Comparable Store Sales: Decline of 1.7% in Q4.
• Adjusted Operating Income: Increased to $3.2 million in Q4.
• Adjusted Diluted EPS: Loss of $0.04 in Q4.
• Fiscal Year 2024 Revenue: Increased 3.8% to $1.823 billion.
• Fiscal Year 2024 Adjusted Operating Income: Increased 21.5% to $65.5 million.
• Fiscal Year 2024 Adjusted Diluted EPS: $0.52.
• Store Locations: Ended Q4 with 1,240 stores.
• Cash Balance: Approximately $74 million at year-end.
• Total Liquidity: $368 million including revolving credit facility.
• Net Debt to Adjusted EBITDA: 1.8 times at year-end.
• Operating Cash Flow: $134 million in 2024.
• Capital Expenditures: $96 million in 2024.

• Warning! GuruFocus has detected 3 Warning Signs with EYE.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• National Vision Holdings Inc (NASDAQ:EYE) reported a 3.9% increase in sales for the fourth quarter, reaching $437.3 million.
• The company achieved its eighth consecutive quarter of positive adjusted comparable store sales, with a 1.5% increase.
• Managed care sales grew to approximately 40% of revenues, showing high single-digit growth throughout the year.
• The company successfully recruited at least 10% of the 2024 graduating class from optometry schools in the US for the third consecutive year.
• Investments in technology, such as a new finance ERP and Adobe CRM platform, are expected to enhance operational efficiency and customer experience.

Negative Points

• Eyeglass World's comparable store sales declined by 1.7%, partly due to the impact of Hurricane Helene in Florida.
• Adjusted diluted earnings per share for the quarter was a loss of $0.04.
• The company experienced negative traffic trends starting in the second week of February, attributed to colder weather and uncertain consumer sentiment.
• A decision was made to eliminate over 10% of existing corporate support positions to align talent with strategic priorities and reduce expenses.
• The company faces challenges with cash pay sales, which continue to show relative softness compared to managed care sales.

Q & A Highlights

Q: Can you give us a sense for how you have factored in any resources and risks from what seems like a significant pivot not away from your core, more needs-based customer to this more moderate middle-income type consumer? A: Reade Fahs, CEO: The pivot is towards a significant part of our current customer base, including managed care and progressive customers. These customers already appreciate our value, and we aim to enhance their experience through improved training, product offerings, and customer journeys.

Q: Can you elaborate on the drivers of comps in 2025 and what is implied in the top and bottom of the guide? A: Alex Wilkes, President: We expect equal parts traffic and average ticket growth to drive comps in 2025. Initiatives from Q4 have shown positive results, and we are optimistic about achieving growth through both ticket and customer comp.

Q: How do you think about immigration policy potential impacts, and how is that reflected in your guide? A: Reade Fahs, CEO: Immigration is one of many factors affecting consumer sentiment. It is part of the broader assessment of consumer direction, but not a primary focus in our guidance.

Q: Can you break out how you're thinking of managed care in 2025 in terms of top-line guidance versus your cash-paying customer? A: Reade Fahs, CEO: Managed care is 40% of our business, growing at high single digits, and is more insulated from economic challenges. We aim to increase this to 50% but remain committed to our core cash-pay customers.

Q: Can you talk about the gross margin drivers and store rationalization plans? A: Melissa Rasmussen, CFO: Gross margin improvements in 2024 were influenced by the Walmart exit and AC Lens wind-down. For 2025, margins are expected to remain consistent. Store closures will focus on optimizing operations, with specific details in our November press release.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.