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National Vision (EYE) Q3 Earnings Top Estimates, Margins Fall
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National Vision Holdings, Inc. (EYE - Free Report) delivered adjusted earnings per share (EPS) of 15 cents for the third quarter of 2023, flat year over year. The figure topped the Zacks Consensus Estimate by 150%.
The adjustment excludes the impact of certain non-recurring charges like stock compensation expenses, asset impairment and the amortization of acquisition intangibles, among others.
GAAP loss in the quarter was 94 cents per share, marking a significant decline from the prior-year figure of 15 cents.
Revenues in Detail
Revenues in the third quarter totaled $532.4 million, surpassing the Zacks Consensus Estimate by 1.1%. The top line rose 6.6% from the year-ago quarter’s number, led by an increase in adjusted comparable store sales growth, new store sales growth and higher revenues from the company's AC Lens business. This was partially offset by the impact of unearned revenues in the third quarter of 2023 compared with the prior-year quarter.
In the third quarter, comparable store sales growth was 3.8%. Adjusted comparable store sales growth was 4.3%. National Vision opened 21 new stores to reach a store count of 1,402 at the end of the quarter. Overall, the store count rose 5.3% year over year.
Segment Analysis
Till the end of 2023, National Vision will continue to provide its principal products and services through two reportable segments — Owned & Host and Legacy. However, the termination of the longstanding Walmart contract (announced in July) will lead to a full dilution of the company’s Legacy business, effective 2024.
National Vision Holdings, Inc. Price, Consensus and EPS Surprise
The gross profit in the reported quarter was $280.3 million, up 5.2% from the prior-year quarter’s levels. The gross margin of 52.7% contracted 71 basis points (bps).
SG&A expenses rose 10.9% to $249.7 million. The adjusted operating margin was 5.8%, contracting 254 bps year over year.
Financial Position
National Vision exited the third quarter of 2023 with cash and cash equivalents of $265.8 million compared with $254.6 million at the end of the second quarter.
The cumulative net cash flow from operating activities at the end of the quarter was $153.3 million compared with $121.3 million a year ago.
2023 Outlook
National Vision updated its full-year 2023 guidance.
For 2023, net revenues are expected in the range of $2.115-$2.125 billion (the previous outlook was $2.075-$2.135 billion). The Zacks Consensus Estimate for the metric is currently pegged at $2.12 billion.
Adjusted EPS is estimated in the band of 53-58 cents (42-60 cents). The Zacks Consensus Estimate for the same is currently pegged at 54 cents.
Adjusted comparable store sales are expected at around 2% (0%-3%).
Our Take
National Vision reported third-quarter 2023 results with better-than-expected earnings and revenues. The performance reflected strength in the managed care business supported by the continued progress with expanding eye exam capacity, particularly within America's Best. Adjusted comparable store sales growth was driven by an increase in average ticket and customer transactions.
In July, National Vision announced the termination of the Walmart partnership in 2024, positioning the company to focus on core strategic initiatives to grow its freestanding brands — America’s Best and Eyeglass World. Planned new store openings of around 65-70 this year remain well on track.
Meanwhile, the contraction of both margins is worrisome. Higher SG&A expenses in the quarter reflected increases in performance-based incentives and stock-based compensation.
Zacks Rank and Key Picks
National Vision currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are DexCom (DXCM - Free Report) , Medpace (MEDP - Free Report) and The Ensign Group (ENSG - Free Report) .
DexCom, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2023 adjusted EPS of 50 cents, beating the Zacks Consensus Estimate by 47.1%. Revenues of $975 million outpaced the consensus mark by 4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DexCom has a long-term estimated growth rate of 33.6%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%.
Medpace reported third-quarter 2023 adjusted EPS of $2.22, beating the Zacks Consensus Estimate by 8.8%. Revenues of $492.5 million surpassed the Zacks Consensus Estimate by 3.4%. It currently carries a Zacks Rank #2.
Medpace has an estimated earnings growth rate of 16.2% for the next year. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 14.6%.
The Ensign Group reported third-quarter 2023 adjusted EPS of $1.20, beating the Zacks Consensus Estimate by 1.7%. Revenues of $940.8 million surpassed the Zacks Consensus Estimate by 0.2%. It currently carries a Zacks Rank #2.
The Ensign Group has a long-term estimated growth rate of 15%. ENSG’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 1.5%.
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National Vision (EYE) Q3 Earnings Top Estimates, Margins Fall
National Vision Holdings, Inc. (EYE - Free Report) delivered adjusted earnings per share (EPS) of 15 cents for the third quarter of 2023, flat year over year. The figure topped the Zacks Consensus Estimate by 150%.
The adjustment excludes the impact of certain non-recurring charges like stock compensation expenses, asset impairment and the amortization of acquisition intangibles, among others.
GAAP loss in the quarter was 94 cents per share, marking a significant decline from the prior-year figure of 15 cents.
Revenues in Detail
Revenues in the third quarter totaled $532.4 million, surpassing the Zacks Consensus Estimate by 1.1%. The top line rose 6.6% from the year-ago quarter’s number, led by an increase in adjusted comparable store sales growth, new store sales growth and higher revenues from the company's AC Lens business. This was partially offset by the impact of unearned revenues in the third quarter of 2023 compared with the prior-year quarter.
In the third quarter, comparable store sales growth was 3.8%. Adjusted comparable store sales growth was 4.3%. National Vision opened 21 new stores to reach a store count of 1,402 at the end of the quarter. Overall, the store count rose 5.3% year over year.
Segment Analysis
Till the end of 2023, National Vision will continue to provide its principal products and services through two reportable segments — Owned & Host and Legacy. However, the termination of the longstanding Walmart contract (announced in July) will lead to a full dilution of the company’s Legacy business, effective 2024.
National Vision Holdings, Inc. Price, Consensus and EPS Surprise
National Vision Holdings, Inc. price-consensus-eps-surprise-chart | National Vision Holdings, Inc. Quote
Margins
The gross profit in the reported quarter was $280.3 million, up 5.2% from the prior-year quarter’s levels. The gross margin of 52.7% contracted 71 basis points (bps).
SG&A expenses rose 10.9% to $249.7 million. The adjusted operating margin was 5.8%, contracting 254 bps year over year.
Financial Position
National Vision exited the third quarter of 2023 with cash and cash equivalents of $265.8 million compared with $254.6 million at the end of the second quarter.
The cumulative net cash flow from operating activities at the end of the quarter was $153.3 million compared with $121.3 million a year ago.
2023 Outlook
National Vision updated its full-year 2023 guidance.
For 2023, net revenues are expected in the range of $2.115-$2.125 billion (the previous outlook was $2.075-$2.135 billion). The Zacks Consensus Estimate for the metric is currently pegged at $2.12 billion.
Adjusted EPS is estimated in the band of 53-58 cents (42-60 cents). The Zacks Consensus Estimate for the same is currently pegged at 54 cents.
Adjusted comparable store sales are expected at around 2% (0%-3%).
Our Take
National Vision reported third-quarter 2023 results with better-than-expected earnings and revenues. The performance reflected strength in the managed care business supported by the continued progress with expanding eye exam capacity, particularly within America's Best. Adjusted comparable store sales growth was driven by an increase in average ticket and customer transactions.
In July, National Vision announced the termination of the Walmart partnership in 2024, positioning the company to focus on core strategic initiatives to grow its freestanding brands — America’s Best and Eyeglass World. Planned new store openings of around 65-70 this year remain well on track.
Meanwhile, the contraction of both margins is worrisome. Higher SG&A expenses in the quarter reflected increases in performance-based incentives and stock-based compensation.
Zacks Rank and Key Picks
National Vision currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are DexCom (DXCM - Free Report) , Medpace (MEDP - Free Report) and The Ensign Group (ENSG - Free Report) .
DexCom, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2023 adjusted EPS of 50 cents, beating the Zacks Consensus Estimate by 47.1%. Revenues of $975 million outpaced the consensus mark by 4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DexCom has a long-term estimated growth rate of 33.6%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%.
Medpace reported third-quarter 2023 adjusted EPS of $2.22, beating the Zacks Consensus Estimate by 8.8%. Revenues of $492.5 million surpassed the Zacks Consensus Estimate by 3.4%. It currently carries a Zacks Rank #2.
Medpace has an estimated earnings growth rate of 16.2% for the next year. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 14.6%.
The Ensign Group reported third-quarter 2023 adjusted EPS of $1.20, beating the Zacks Consensus Estimate by 1.7%. Revenues of $940.8 million surpassed the Zacks Consensus Estimate by 0.2%. It currently carries a Zacks Rank #2.
The Ensign Group has a long-term estimated growth rate of 15%. ENSG’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 1.5%.