DULUTH, Ga.—National Vision Holdings, Inc. (NASDAQ: EYE), one of the largest optical retail companies in the U.S., reported its financial results for the fourth quarter and fiscal year ending Dec. 30, 2023, and provided its outlook for fiscal 2024. Net revenue increased 8.0 percent to $506.4 million compared with the fourth quarter of 2022, primarily due to an increase in adjusted comparable store sales growth and growth from new stores sales, partially offset by closed stores. Net revenue increased 6.0 percent to $2,126.5 million compared with fiscal year 2022, and was primarily driven by growth from new store sales, an increase in adjusted comparable store sales growth, higher revenue from the company’s AC Lens business, partially offset by closed stores and the effects of unearned and deferred revenue in fiscal year 2023 compared with fiscal year 2022.

“We are very pleased with our stronger than expected fourth quarter and full year 2023 performance and our team’s accomplishments throughout 2023,” said Reade Fahs, chief executive officer. “Our results reflect crisp operational execution including disciplined expense management, continued strength in our managed care business, and effective marketing campaigns that drove increased traffic and highlighted our value offering. Throughout the fiscal year, our teams focused on adapting our business for the realities of today’s marketplace, and I believe our strong end to the year is a testament to our progress.”

Fahs said, “Looking ahead, our outlook includes scenarios that factor in a slower than expected start to the year. With our transition out of the Walmart Vision Center stores now complete, we are executing initiatives to improve profitability and streamline the business and are committed to positioning our core business for long-term profitable growth.

"We’ve taken specific cost and pricing actions that are expected to benefit our financial performance in 2024. We believe these profitability efforts and our ongoing progress in expanding exam capacity, will create value for shareholders and move us forward in our mission to make quality eyecare and eyewear more affordable and accessible for all,” Fahs said.

The company opened 17 new stores in fourth quarter 2023 (16 America’s Best stores and one Eyeglass World store), closed two stores and transitioned four stores to Walmart as part of the partnership termination, and ended the quarter with 1,413 stores. Overall, store count grew 4.4 percent from Dec. 31, 2022 to Dec. 30, 2023. For fiscal year 2023, the company opened 70 new stores, closed seven stores and transitioned four stores to Walmart as part of the pending partnership termination, and ended the period with 1,413 stores.

Net income decreased to $16.0 million compared to $9.3 million in the fourth quarter of 2022. Net income margin decreased to 3.2 percent compared to 2.0 percent in the fourth quarter of 2022. Net income decreased to $65.9 million, inclusive of non-cash impairment charges of $79.7 million and $7.0 million in expenses related to the termination of the Walmart partnership, compared to $42.1 million in fiscal year 2022. Net income margin decreased to 3.1 percent compared to 2.1 percent in fiscal year 2022.

National Vision’s cash balance was $149.9 million as of Dec. 30, 2023. Total debt was $461.3 million as of Dec. 30, 2023, consisting of outstanding first lien term loans, the 2025 Notes and finance lease obligations, net of unamortized discounts.

As previously announced on July 26, 2023, the company’s partnership with Walmart Inc. will be ending in 2024. This includes supplying and operating Vision Centers in 229 Walmart stores, providing contact lens distribution and related services to Walmart and its affiliate, Sam’s Club, and arranging for the provision of optometric services at certain Walmart locations in California. In addition, given these changes, the company previously announced its decision to wind down its AC Lens operations which primarily supported the contact lens distribution and related services to Walmart and its affiliate, Sam’s Club.

For fiscal 2023, the combined Walmart Vision Center and AC Lens operations generated approximately $403 million in revenue and earnings before income tax of approximately $17 million. Effective as of Feb. 23, 2024, the company has completed the transition of 229 Walmart Vision Center stores and remains on-track with its plans to wind down its AC Lens operations by June 30, 2024.

For fiscal 2024, the company expects the combined Walmart Vision Center and AC Lens operations to generate approximately $145 million in revenue and earnings before income tax of approximately $2.5 million.

For the 52 weeks ending Dec. 28, 2024, the company expects net revenue to be between $1.965 billion and $2.005 billion. The company also expects to open 65 to 70 new stores in fiscal 2024, most in the America’s Best brand, according to Fahs.

The company also announced on a conference call that it will convert its 20 Eyeglass World stores in California over to the America’s Best brand. There are currently 76 America’s Best stores in the state.

National Vision Holdings, Inc. is one of the largest optical retail companies in the U.S. with more than 1,100 stores in 38 states and Puerto Rico.