National Vision Holdings, Inc. Q4 FY2024 earnings call

• Acknowledged Melissa Rasmussen's departure and welcomed new CFO Chris Laden. - 2024 was a transformative year with new leadership, improved fourth quarter results (8th consecutive quarter of positive adjusted comps). - Implemented pricing actions, managed care growth, and store optimization. - Shifted focus to more valuable customer segments, enhancing customer experience. - Adjusted pricing strategy for managed care customers. - Invested in technology (finance ERP, Adobe CRM, e-commerce platform) and marketing. - Reorganized leadership to align with strategic approach. - Focused on expense management, with $12M in SG&A reductions planned for 2025.

In the fourth quarter, sales increased 3.9% to $437.3 million. Adjusted comparable store sales were +1.5%, with America's Best up 2% and Eyeglass World down 1.7% due to Hurricane Helene. For fiscal 2024, net revenue was $1.823 billion, up 3.8%. Adjusted comparable store sales were +1.3%, with managed care sales comping high single digits, accounting for approximately 40% of revenues. America's Best had a 2% comp in Q4, while Eyeglass World was negatively impacted by Hurricane Helene.

• 2025 outlook includes 53rd week adding ~$35M net revenue and ~$3M adjusted operating income. - Net revenue expected between $1.901B - $1.955B, adjusted comparable store sales growth 0.5%-3.5%, new store openings (30-35). - Adjusted operating income expected $73M - $88M, adjusted diluted EPS $0.52 - $0.64. - Acknowledged strong January performance but widened guidance range due to recent traffic trends and weather impacts.

• Weather impacts on consumer traffic. - Uncertainties in consumer sentiment. - Tariffs: less than 10% of costs applicable to revenue subject to China tariffs, <1% to Mexico. - Challenges with pivoting to new customer segments and balancing expectations of higher-value consumers.

Q: Michael Lasser asks about resources and risks of pivoting to moderate middle income consumers and balancing expectations.

A: Reade Fahs says it's part of current customer base, focusing on enhancing experience for existing segments like managed care, progressive, and Rx customers.

Q: Andy Chukumba asks about 50 basis point operating margin expansion and remote rollout.

A: Melissa Rasmussen says it's from SG&A cost reductions, remote rollout continues where laws allow.

Q: Zachary Fadem asks about comp drivers and integration policy impacts.

A: Alex Wilkes says comps from ticket and customer count, integration policy is one factor in consumer sentiment.

Q: Brandon Cheatham asks about managed care vs cash pay.

A: L. Fahs says managed care is 40% growing high single digits, still serving cash pay customers.

Q: Simeon Gutman asks about core EBIT sources.

A: Melissa Rasmussen says SG&A cost reductions contribute to EBIT improvement.

Q: Meghan Holtz asks about Toku BioAge reimbursement and managed care penetration.

A: L. Fahs says Toku BioAge is cash pay, Alex Wilkes talks about personalized marketing and product offerings for managed care.

Q: Adrienne Yih asks about gross margin drivers and store closures.

A: Melissa Rasmussen says gross margin consistent, store closures include 3 America's Best and 9 Eyeglass World stores.

Q: Molly Baum asks about optometrist recruiting and remote impact.

A: L. Fahs says recruiting 10% of graduating class, remote provides flexibility.