National Vision Holdings, Inc. Reports Q2 Quarter Gains and Higher Comp Store Sales

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DULUTH, Ga.—National Vision Holdings, Inc. (NASDAQ: EYE) reported net revenue climbed 11.4 percent to $429.5 million for the second quarter ending June 29, compared to $385.5 million for the second quarter of 2018. Comparable store sales growth was 4.4 percent for the quarter, the 70th consecutive quarter of comp store gains, while adjusted comparable store sales growth was 3.8 percent. The company reported net income of $10.3 million for the second quarter, while adjusted net income rose 3.6 percent to $16.3 million.

The company opened 24 new stores, closed one store and ended the quarter with 1,128 stores. Reade Fahs, CEO, stated, “The National Vision team delivered its 70th consecutive quarter of positive comparable store sales growth. We are pleased that, after a softer start, sales steadily improved as the second quarter progressed. These results reflect the ongoing strength of our value proposition, business model, and operational teamwork. We opened 24 stores in the quarter, and are on track to achieve our 2019 store opening plans. We remain confident in and committed to our growth plans in U.S. value optical retail.”

For the first half of the fiscal year, net revenue increased 12.2 percent to $890.7 million from $793.5 million for the same period of 2018. Comparable store sales growth was 5.4 percent and adjusted comparable store sales growth was 5.3 percent. Net income was $27.7 million compared to net income of $36.9 million for the same period of 2018.

Adjusted EBITDA increased 5.5 percent to $113.1 million compared to $107.2 million for the same period of 2018. The adjusted EBITDA margin decreased to 12.7 percent from 13.5 percent for the same period of 2018, due to investment in advertising, increased net revenue from the AC Lens contact lens distribution business growth, and the net change in margin on unearned revenue.

NVI's cash balance was $82.8 million as of June 29, 2019. The company had no borrowings under its $100.0 million first lien revolving credit facility and exclusive of letters of credit of $5.5 million. Total debt was $587.6 million as of June 29, 2019, consisting of outstanding first lien term loans and finance lease obligations. Cash flows from operating activities for the first six months of 2019 were $119.3 million compared to $80.1 million for the same period of 2018. Capital expenditures for the first six months this year totaled $52.1 million compared to $48.7 million for the same period of 2018.

On July 18, the company amended its credit agreement to establish new first lien term loans in an aggregate principal amount of $420 million and a new revolving credit facility in the aggregate principal amount of up to $300 million, of which $148 million was drawn as of closing of the amendment. The company used the proceeds from the Term A Loans and the new revolving credit facility to repay all outstanding loans under the existing credit agreement.

The company reaffirmed its outlook for the fiscal year ending December 28, 2019, and Fahs told analysts the company was on track to open 75 stores by the end of the year. The company's projected revenues of between $1.675 billion and $1.705 billion for the year includes an estimated $20 million to $25 million in incremental net revenue from AC Lens contact lens distribution business growth.

National Vision operates five retail brands: America’s Best Contacts & Eyeglasses, Eyeglass World, Vision Centers inside select Walmart stores, Vista Opticals inside Fred Meyer stores and on select military bases, and several e-commerce websites, offering a variety of products and services.