National Vision Holdings Reports Double-Digit Sales Growth in Fourth Quarter and Fiscal 2017


DULUTH, Ga.—National Vision Holdings Inc. (NASDAQ:EYE), which completed a successful public stock offering in October, on Thursday reported that its sales rose by a double-digit percentage in both the fourth quarter and fiscal year as the company closed out 2017 with a strong fourth-quarter performance. Among the highlights of the fourth quarter, which ended Dec. 30, National Vision said its net revenue increased 16.1 percent to $321.8 million from $277.1 million, due in part to adjusted comparable-store sales growth of 10.4 percent. The comparable-store sales increase marked the 64th consecutive quarter of positive comparable-store sales growth, according to the earnings announcement.

On the bottom line, net income totaled $28.7 million in the quarter, which includes a one-time deferred tax benefit of $43 million. The adjusted EBITDA totaled $25 million, an increase of 19.4 percent, according to the announcement. All five retail brands posted positive adjusted comparable-store sales growth, National Vision noted. VMAIL reported on the company’s over-subscribed initial public offering in October.

For fiscal 2017, National Vision reported that revenue increased 15 percent to $1.38 billion, with adjusted same-store sales growth of 7.5 percent. Net income totaled $45.8 million. Adjusted EBITDA increased 15.9 percent to $159.7 million.

“The fourth quarter represented a strong finish to another record year of revenues and profitability for National Vision,” Reade Fahs, chief executive officer, said in the earnings announcement. “The team delivered its 64th consecutive quarter of positive comparable-store sales growth, once again driven by increases in customer transactions, with same store sales gains in all of our brands.” The same-store sales growth was driven by the performance of the America's Best and Eyeglass World banners, but all of the company’s store brands “were positive for the fourth quarter,” according to National Vision.

National Vision also noted that fourth-quarter results benefited from the recovery in net revenue at 203 stores that were temporarily closed in the third quarter due to Hurricanes Harvey and Irma. In the fourth quarter, National Vision opened 17 stores “and continues to see a long runway for store growth,” Fahs said during a conference call with securities analysts. “We continue to believe that, as long as we provide great prices and great service to our patients and customers, we should be well-positioned in 2018 and beyond,” he said.

On the conference call with analysts, Fahs said new-store openings in 2018 would be primarily in California and the Northeast region of the U.S., and that most of the new stores National Vision opens would be “skewed toward new markets.”

“2017 was a great year for National Vision [in terms of] record revenues, record profits and record customer counts,” he added. Fahs also noted that National Vision expects to open a new lab, the sixth in its network, in the first quarter of 2019. Overall in fiscal 2017, National Vision opened 76 stores, closed six stores and ended the period with 1,013 stores. The company focused store growth on the America's Best banner (68 stores in 2017) and Eyeglass World (seven stores in 2017). Store count grew 7.4 percent from Jan. 1, 2017, to Dec. 30, 2017, according to the announcement.

Looking ahead to fiscal 2018, National Vision said it is forecasting same-store sales growth in the 3 percent to 5 percent growth range, with capital expenditures in the current year estimated at $100 million to $105 million.

Asked about the planned combination of Essilor and Luxottica, a deal that is expected to be finalized in 2018’s first half, as VMAIL reported, Fahs told analysts he doesn’t believe the merged company will bring any major changes to National Vision’s operations. “We have had strong long-term relationships with both Essilor and Luxottica,” he said. “We believe we are one of their larger and faster-growing customers. We don’t see the relationship changing.”