National Vision Holdings, Inc. (NASDAQ: EYE), a leading optical retailer, reported a 2.9% increase in net revenue for the third quarter of fiscal 2024, driven by growth from new store sales, adjusted comparable store sales growth, and the effect of unearned revenue.
The company's net revenue reached $451.5 million in the quarter, slightly exceeding Wall Street's expectations. However, National Vision faced several challenges during the quarter, including increased costs and a slowdown in customer traffic.
The company's adjusted comparable store sales growth, a key metric in the retail industry, was 0.9%, reflecting a higher average ticket but a modest increase in customer transactions. While this growth rate was positive, it marked a deceleration from the previous year's performance.
National Vision's costs applicable to revenue increased by 3.3% year-over-year, driven by higher optometrist-related costs and other mix and margin effects. The company's selling, general, and administrative expenses (SG&A) also rose by 2.8%, although adjusted SG&A increased at a slower rate of 1.7%, reflecting efforts to control costs.
Despite the challenges, National Vision remained optimistic about its transformation initiatives, including expanding exam capacity, implementing new traffic-driving initiatives, and benefiting from new executive leadership perspectives. The company reaffirmed its fiscal 2024 outlook for key metrics, including revenue, adjusted operating income, and adjusted diluted earnings per share.
Looking ahead, National Vision plans to open 65 to 70 new stores in fiscal 2024 and moderate new store openings to 30 to 35 in fiscal 2025 to invest in enhancing the overall customer experience. The company also announced the closure of 39 underperforming stores by the end of fiscal 2026 as part of its store fleet optimization efforts.
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