National Vision Q3 Earnings Top Estimates, Revenues Lag, Stock Tumbles

Earnings Performance - Adjusted EPS for Q3 2024 was 12 cents, surpassing the Zacks Consensus Estimate of 5 cents and up from 11 cents in the year-ago period [1] - GAAP income from continuing operations was 3 cents per share, down from 23 cents in the prior-year quarter [1] - Shares of EYE dropped 3.1% following the earnings announcement, closing at $11.82 [2] Revenue Performance - Q3 2024 net revenues from continuing operations totaled$ 451.5 million, missing the Zacks Consensus Estimate by 0.03% [3] - Top line rose 2.9% year-over-year, driven by new store sales, Adjusted Comparable Store Sales Growth, and unearned revenues [4] - Comparable store sales growth was 1.4% year-over-year, with adjusted comparable store sales growth at 0.9% [4] - The company opened 18 new stores, ending the quarter with 1,231 stores, a 4.9% year-over-year increase in store count [4] Margin Performance - Gross profit in Q3 2024 rose 2.6% year-over-year to $261.6 million, with gross margin expanding 110 basis points despite a 3.3% rise in cost of revenues [5] - SG&A expenses fell 1.6% year-over-year to$ 224 million [5] - Adjusted operating margin expanded 207 basis points year-over-year to 8.3% [5] Financial Position - Cash and cash equivalents at the end of Q3 2024 were $81.2 million, down from$ 179.5 million at the end of Q2 2024 [6] - Cumulative net cash flow from operating activities was $103.4 million, compared to$ 153.3 million a year ago [6] 2024 Outlook - Full-year net revenues for 2024 are expected to be in the range of $1.820-$ 1.840 billion, unchanged from previous guidance [7] - Adjusted comparable store sales are expected to grow 0.5%-1.5%, unchanged from previous guidance [7] - Adjusted EPS for 2024 is estimated to be in the range of 45-50 cents, unchanged from previous guidance [7] Portfolio Review Update - The company identified less than 5% of its total store fleet as not meeting profitability thresholds, with plans to close 39 stores by the end of fiscal 2026 and convert four Eyeglass World stores to America's Best by the end of fiscal 2024 [8] - In fiscal 2025, new store openings will be temporarily moderated to 30-35 stores, with plans to return to a more recent store opening cadence thereafter [9] Business Performance and Strategy - America's Best continued to drive sales performance, supported by strength in the managed care business [10] - Customers responded well to the Wise Buys eyeglass promotion, enhancing value offerings and attracting new customers [11] - The company is leveraging remote capabilities to expand exam capacity and provide doctors with new ways to practice [11] - Progress in transformation initiatives includes the completion of the store fleet review, implementation of new traffic-driving initiatives, expansion of exam capacity, and improved remote exam efficiency [12] Industry Comparison - Haemonetics (HAE) reported Q2 fiscal 2025 adjusted earnings of $1.12 per share, surpassing the Zacks Consensus Estimate by 2.8%, with revenues of$ 345.5 million beating the consensus mark by 0.7% [14] - Intuitive Surgical (ISRG) posted Q3 2024 EPS of $1.84, beating the Zacks Consensus Estimate by 11.5%, with revenues of$ 2.04 billion surpassing the consensus estimate by 1.2% [15] - Boston Scientific Corporation (BSX) reported Q3 2024 adjusted earnings of 63 cents per share, surpassing the Zacks Consensus Estimate by 8.6%, with revenues of $4.21 billion beating the consensus estimate by 4.5% [16]