Reade Fahs, CEO, National Vision Holdings, Inc.
 
DULUTH, Ga.—National Vision Holdings, Inc. (NASDAQ: EYE) reported financial results for the second quarter ended July 3, 2021, noting that net revenue increased 28 percent to $549.5 million, comparable store sales grew by 22.5 percent (adjusted comp store sales growth of 23.5 percent) and net income rising 267 percent to $37.6 million for the period. The company said, given the lack of comparability to the second quarter of fiscal 2020 when NVI temporarily closed all of its retail locations to the public through early June due to COVID-19, the announcement noted a comparison of fiscal 2021 results to fiscal 2019 pre-COVID results, in addition to a condensed comparison to fiscal 2020.

“The National Vision team delivered exceptionally strong results for the second quarter,” stated Reade Fahs, NVI's CEO. “We believe our continued operating momentum further demonstrates the benefit from the hastening of industry trends that favor our low price model and strong store-level execution to meet heightened demand for affordable eyewear and eyecare. I would like to thank the 2,000-plus optometrists and over 13,000 associates at National Vision for their continued resilience and commitment to serve our patients and customers.”

Fahs said, “During the quarter, we opened 20 stores and achieved another major milestone, as our trailing 12-month net revenue surpassed $2 billion."  

Fahs noted that the company was also pleased by the positive trend in customer transactions throughout the quarter, especially in June when NVI lapped record reopening results last year. "Looking ahead, we continue to be excited about our long-term opportunities for expansion and market share growth. Given our consistent performance since reopening last year and our safety first approach, we are confident in our ability to navigate the challenging and dynamic environment and remain in a position of strength to drive long-term value for our stakeholders.”

In a call with financial analysts after the results were announced, Fahs said, "The top-line strength was broad-based and led by our growth brands America's Best and Eyeglass World. The outsized growth that we've experienced over the last year is further evidence that the pandemic has hastened the industry trends that we've been benefiting from for many years. While the pandemic is clearly not over, our year-to-date momentum gives us confidence to raise our full-year outlook."

Fahs also said, "As the quarter continued, our business remained healthy in May and June, as rising vaccination rates and increased mobility has likely played a role in bringing more patients and customers back to stores. Our store teams remain focused on safely meeting this heightened demand for low cost items, glasses and contact lenses.

"We believe that our rigorous safety protocols have resonated with patients and customers. The back-to-school season has begun amidst the ongoing uncertainties of COVID and its variants and while it's still quite early, we've seen a ramp in back-to-school traffic that is more aligned with pre-COVID trends. We believe we were the second largest optical retailer in North America last year, and areamong the fastest-growing," Fahs said.

Overall, store count grew 10.7 percent from June 29, 2019 to July 3, 2021. Costs applicable to revenue increased 16.5 percent to $235.9 million compared to the second quarter of 2019. As a percentage of net revenue, costs applicable to revenue decreased 430 basis points to 42.9 percent compared to the second quarter of 2019. This decrease as a percentage of net revenue was primarily driven by lower growth in optometrist costs, increased eyeglass mix and higher eyeglass margin, the company said.

Comparing second quarter 2021 to the same period in 2020 (condensed) NVI reported net revenue increased 111 percent to $549.5 million, with net revenue positively impacted by 16.5 percent due to the timing of unearned revenue. Comparable store sales growth was 99.1 percent and adjusted comparable store growth was 76.7 percent. The company opened 20 new stores, closed one store, and ended the quarter with 1,249 stores with overall store count growing 5.5 percent from June 27, 2020 to July 3, 2021. Net income increased 186 percent to $37.6 million compared to the second quarter of 2020.

For the first half, NVI's net revenue increased 21.7 percent to $1.1 billion compared to the same period of 2019. Net revenue was negatively impacted by 0.8 percent due to the timing of unearned revenue. Comparable store sales growth was 15.5 percent and adjusted comparable store sales growth was 16.7 percent. In the first six months of the fiscal year, the company opened 45 new stores, closed one store, and ended the period with 1,249 stores. Net income increased 193 percent to $81.0 million compared to the same period of 2019.

National Vision's cash balance was $408.3 million as of July 3, 2021. The company had no borrowings under its $300.0 million first lien revolving credit facility, exclusive of letters of credit of $6.4 million. Total debt was $620.4 million as of July 3, 2021, consisting of outstanding first lien term loans, convertible senior notes and finance lease obligations, net of unamortized discounts. In June 2021, the company voluntarily prepaid $117.4 million in existing Term A loans. In addition, the company amended its credit agreement to reduce the applicable margin for interest rate calculations and modify certain financial covenants back to pre-COVID terms.

Cash flows from operating activities for the first six-months of 2021 were $189.8 million compared to $71.4 million for the same period of 2020 and $119.3 million for the same period of 2019. Capital expenditures for the first six-months of 2021 totaled $38.8 million compared to $25.8 million for the same period of 2020 and $52.1 million for the same period of 2019.

As a result, National Vision has updated its fiscal 2021 outlook, which reflects the currently expected impacts related to COVID-19. It noted, "However, the ultimate impacts of COVID-19 on the company’s financial outlook remain uncertain. The outlook shown below assumes no material deterioration to the company’s current business operations as a result of COVID-19 and its variants, governmental actions and regulations.

"Given the uncertainties, dynamic nature, variants, and unknown duration of the pandemic, the company is continuing to evaluate additional measures that may be taken to respond to the impact of COVID-19 on its business," the company said. Within its updated outlook for the 52 weeks ending Jan. 1, 2022, the company said it is still anticipating opening 75 new stores by year end, and raising its adjusted comparable store sales growth projections to 19 percent to 22 percent and an adjusted 2021 revenue outlook of between $2.01 billion and  $2.06 billion.

National Vision Holdings, Inc. operates 1,200 retail stores in 44 states plus the District of Columbia and Puerto Rico. The company operates five retail brands: America’s Best Contacts & Eyeglasses, Eyeglass World, Vision Centers inside select Walmart stores, and Vista Opticals inside select Fred Meyer stores and on select military bases, and several e-commerce websites.

National Vision's announcement stated that a complete discussion of fiscal 2021 results as compared to fiscal 2020, are posted in its quarterly report Form 10-Q for the second quarter, filed with the Securities and Exchange Commission.