National Vision Holdings, Inc. EYE delivered an adjusted EPS (earnings per share) of 30 cents in the first quarter of 2024 compared with 31 cents in the year-ago quarter. However, the figure topped the Zacks Consensus Estimate by 7.1%.
GAAP earnings from continuing operations in the quarter was 16 cents per share compared with 20 cents in the prior year’s quarter.
Revenues in Detail
On Feb 23, 2024, National Vision completed the termination of the Walmart Management and Services Agreement and discontinued the former Legacy reportable segment. As of Mar 30, 2024, the company’s operations consisted of one reportable segment, Owned & Host.
Net revenues from continuing operations in the first quarter totaled $542.5 million, which missed the Zacks Consensus Estimate by 2.7%.
The top line rose 4.2% from the year-ago quarter’s number, primarily driven by growth from new store sales, higher revenues from the company’s AC Lens business and the effect of unearned revenues compared with the prior-year period.
National Vision Holdings, Inc. Price, Consensus and EPS Surprise
National Vision Holdings, Inc. price-consensus-eps-surprise-chart | National Vision Holdings, Inc. Quote
In the first quarter, comparable store sales growth was 1.4% year over year. Adjusted comparable store sales growth was 0.4%. National Vision opened 14 new stores, converted 20 Eyeglass World stores into America’s Best stores and ended the period with 1,201 stores. Overall, the store count rose 6.5% year over year.
Margins
On a consolidated basis, the gross profit in the first quarter rose 3% from the prior-year quarter’s level to $293.9 million. Yet, a gross margin of 54.2% contracted 63 basis points (bps).
SG&A expenses rose 5.2% year over year to $245.4 million. The adjusted operating margin was 8.9%, which contracted 106 bps year over year.
Financial Position
National Vision exited the first quarter with cash and cash equivalents of $150.1 million compared with $149.9 million at the end of 2023.
The cumulative net cash flow from operating activities at the end of the quarter was $23.9 million compared with $74.1 million a year ago.
2024 Outlook
National Vision reaffirmed its outlook for the 52 weeks ending Dec 28, 2024.
Full-year net revenues are expected in the range of $1.965-$2.005 billion (same as earlier). The Zacks Consensus Estimate for fiscal 2024 revenues currently stands at $1.99 billion.
Adjusted comparable store sales are expected to grow 2%-4% (unchanged). Adjusted EPS is estimated in the band of 50-65 cents (unchanged). The Zacks Consensus Estimate for the same is currently pegged at 57 cents.
Our Take
National Vision ended the first quarter of 2024 with earnings beating and revenues missing estimates. The contraction of both margins during the quarter is discouraging. The company’s total sales were adversely affected by the weather and a slower start to the tax refund season at the beginning of the quarter.
On a positive note, the adjusted comparable store sales improvement was mainly driven by the ongoing strength of the managed care business and growth within America’s Best. During the quarter, National Vision continued to progress on its initiatives, including expanding exam capacity by addressing both dark and dim stores. Its ongoing focus on disciplined expense management is encouraging.
Zacks Rank and Key Picks
National Vision currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Inspire Medical Systems INSP, Hims & Hers Health HIMS and Encompass Health Corporation EHC.
Inspire Medical Systems, sporting a Zacks Rank #1 (Strong Buy), reported a first-quarter 2024 loss of 34 cents per share, narrower than the Zacks Consensus Estimate by 46.0%. Revenues of $164 million topped the Zacks Consensus Estimate by 1.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
INSP has an estimated 2024 earnings growth rate of 51.4% compared with the industry’s 20.2%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 358.9%.
Hims & Hers Health, sporting a Zacks Rank #1, reported first-quarter 2024 earnings of 5 cents per share, which topped the Zacks Consensus Estimate by a staggering 150%. Revenues of $278.2 million surpassed the Zacks Consensus Estimate by 2.8%.
HIMS has an estimated 2024 earnings growth rate of 218.2% compared with the industry’s 20.2%. In the trailing four quarters, the company delivered an average earnings surprise of 79.2%.
Encompass Health, carrying a Zacks Rank #2 (Buy), reported a first-quarter 2024 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 20.4%. Net operating revenues of $1.3 billion topped the Zacks Consensus Estimate by 3.6%.
EHC has an estimated long-term earnings growth rate of 15.6% compared with the industry’s 11.7% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 18.7%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
