EYE - Earnings call transcript Q1 2018 | National Vision Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to National Vision's First Quarter 2018 Earnings Conference Call. My name is Brian, and I will be your operator for today. At this time, all participants are in a listen-only mode.

Following management's prepared remarks, we will host a question-and-answer session and our instructions will be given at that time. [Operator Instructions] As a reminder, this conference call may be recorded for replay purposes. pleasure the my Mr. over now is to conference hand to It Mann, Relations. President, David Investor Vice may you Sir, begin.

David Mann

Brian, Welcome first call. to you, National Thank and Vision's quarter good XXXX morning, everyone. earnings

Executive today Jeff portion Officer. our of the and Chief also Reade call will Chief is McAllister, the Officer, the the on Patrick Moore, call. me Fahs, Joining question-and-answer Chief on Officer; Operating be and Financial during are call available

call, issued this nationalvision.com. be morning and both presentation, Investors supplemental the will the website, release the referenced which section during earnings are our on available Our of

addition, conference replay available on the In will a access in will replay of well replay section as Investors release. morning's of code The webcast website. call of today. earnings be be audio found this the also later archived as our can be number A the

on Before and let actual risks in Act differ and and release from subject and statements supplemental expectations in you, today's as our results non-GAAP materially our not include, the Commission. Private are risks and presentation factors of Securities we website. earnings defined the me These could cause statements the Reform can uncertainties of that to, these our projections. our Reconciliation uncertainties found Litigation These the measures. forward-looking today's begin, and to remind in release Exchange Securities release XXXX. filings and presentation, included identified limited and include release The our to presentation also with certain in the but are includes be are measures which

forward-looking presentation in attention your measures. We for to to also draw non-GAAP like additional about information and X today's statements Slide would

for time or National our certain supplemental from of provide our presentations to Vision addition, expects reference time, section Investors on materials website. to investor In

call, quarter XXXX today's discuss and will review Patrick then financial X. business' will XXXX fiscal outlook. our to Slide first recent highlights. On performance Reade Turning our

the we Following call will remarks, for open these questions. prepared

to over the Reade. turn me call let Now

Reade Fahs

you, with first a X. It's my to pleasure speaking to share Good Thank results. our turn Slide David. quarter like on be today to you I’d morning, everyone. birthday to

are members started We store positive many current report streak sales years of management when XXth of quarter consecutive Vision. began pleased our comparable over ago team growth. to National XX This our

the We record. this are America's comp. X.X% a led sales by certainly with and comp proud was store the X.X%. X.X% of higher comp adjusted growth was The comparable full guidance end This a our track of World up of consistency at QX with growth range. result year Eyeglass Best was

launched continued Owl campaign, quarter, Mr. the advertising Eyeglass of America's advertising successfully its and World Best catchy World During the national Campaign. its

We're was improved brands. all level. store sales In each strength the great and broad-based, with of average both about positive store This customer store. that we growth store focused second in of detail, is quarter all that achieving comps retail the execution our of end, in level with our our comps we're that teams at the positive delivered is Our brands. the at consecutive their pleased in glasses customer exams every in lens every contact service in driven sure and on and on each our increases by Comparable eye patient making every and receives transactions customer ticket. and purchases was and brands day remain sales store

led opened increase a store We year. X,XXX Scores closely. consolidated Net X.X% the basis In by Another track Best. America's XX improved sign stores QX during quarter or end the Scores, we a is our over locations of the first in customer count on satisfaction which quarter last Promoter quarter, to Promoter with Net

income a combined X.X% grew EBITDA and comparable revenue. adjusted brand. increase and Best Adjusted store sales were increased of to drive openings the net The All in XX.X% net growth growth America's in XX.X%. our unit

first operating expected certain quarter costs Based our As as relative we in we and due outlook, take with that expenses EBITDA noted our a timing growth company to associated primarily for the we few public points. EBITDA last be year, to upon a more to XXX of the modest collectively growth on will incremental reaffirming expected XXXX our are to-date, which performance Patrick approximately impacted you growth adjusted by through minutes. basis call,

So why X don't now. you turn to Slide

and during and comparable in to economic Our business gain. store demonstrate times. weak the quarters of XX sales continues cycle graph That sales growth consistency consecutive both performance store strong comp our highlights across store economic

March, we growth I selling earlier, by of are driven As customer average spoke peak in both in we the mentioned comp middle in last When was our our and ticket. gains count season.

personally, time. you the years, are fell were the nor'easters a we weather purchases postponed and impacts in tied a on endured to fortunate Based and be the only over to weekends. balance three As many over which But necessity. on where four medical month, from in of our category there of out experience generally purchase

stay to storm, but their continues just like I worse. during home, get a bad say, people As to vision

are to quarter. into essentially second traffic seeing year-to-year We business similar the year, our some with pattern peak flowing of the last

our in back. customers coming positive a mature as team having stores store consistent as optical highlight leadership growing more keep results the Our of comp comparable experts, growth new well a benefits of as operating sales growth store industry, in

on and market highly-experienced share to time. team We operating and model, with a day, management customer every our one our believe that gaining to at one continue executing focus continues we're low-price patient

We growth advantages X. significant Slide and leveraging on for on capitalizing focused to National our the remain that competitive exists Vision. potential now Turning

to We XX stores well for and quarter our new our first stores the that formulas plan XX worked the the have focus, in significant the in to to First, past. stores open footprint. continue opportunity this given on year, executing primary us opened space white current relative

more pipeline slightly and towards and Company's to Simply skew to to offer retention our the communities be World. eye focused optometrist's to success majority year new with we of for openings Optometrists remainder be Our role contacts. the stable the America's exams, place consumers need deliver on Overall, play and more XXXX. money we the put, in want U.S. care of existing to in Best excited our then for patients Store to strong continue opportunity on The to the throughout We're expected best openings remained rates in glasses save locations optometrists. eye this highly practice. remain and optometrists our to year, our remained versus is will in into brand growth mission Eyeglass to key new improved to a our selling last and markets.

multi-year sales drive team to Our to growth lapping comparisons. even XXXX, continue store comparable with in with expects strong

maturing vision insurance are drivers well comp as marketing initiative. both from stores Our as orders the comp and key

ensure stores can With the new mature find. But what strive customers as customer take time when and cycle value. customer they purchase eyeglasses, to value a they that Our do, it incredible awareness several our find our to gets builds. store infrequent potential they We it we deliver for for love take around, believe that after opens. years best we fully believe growth to an brands

the repeat comp by service that Eyeglass Our there of from revenue customer customers or positive to growth including quarter, in strong word-of-mouth. driver. in this these can two We've with for$XX.XX, penetration programs positive the which net insurance exam experienced backed and and in same our vision expand still customers a We to and continued extreme believe buy satisfied America's $XX two we day. for eye leads them pairs of Participation pairs partnerships, opportunity at relationships and are excellent insurance of combination get first value remain World at comprehensive a vision providers. glasses believe eyeglasses Best free increased

for believe we driving the Marketing traffic customers to eyeglasses to that an a of relatively given to remain relative us. important coming our continue factor remains in key purchase, industry vision our insurance. stores. and business plays infrequent advertising are in the that television presence underpenetrated We attracting from And also role

catch continue they our to advertising to attention utilize whenever We the market. customer's in are television

very campaign the at Owl reach first much launched consumers advertising brand's the factor to we was this World. first the reminds the country stores. shop brand, new the We're sales that the they extending in customer television early believe Mr. World Eyeglass cover all by we Our the are the now campaign America's comp a advertising to to of didn't footprint paid X.X% in encouraged response and the an in TV national World strong America's quarter they quarter, if campaign, throughout Eyeglass too Best. which In differentiates Best and the

continues TV performer. experience. now campaign a Eyeglass and in what concept the for current to team be bringing years has brand experience I We benefit almost We have doing. better of solid the has a since Eyeglass owned consumers. it and acquiring new a it Eyeglass brand. consistent like the the fresh energy more communicates We're also a to World store around brand World turned [indiscernible] XXXX. to now really that delivering leadership World two is the

the says, As is the before Eyeglass of world's ever eyeglasses. Eyeglass more than tag World growth. I'm excited the rate for line about best future opportunity World

as operating beat being low promote a culture. we retailer, price low value productivity, everyday In low-cost terms cost. can't everyday of a without We

Within Our centralized we we lab network a competitive that operation operate our we believe a advantage. that what everyday reason labs, as provides low manufacturing are world-class true key cost. is a

next of leadership. and up state-of-the-art will be as role first will will of to diversity. currently new add been lab as experience network Manufacturing time quarter the six on announced Distribution XX projects. Manufacturing that necessary has focus at open Senior industry manufacturing bring in total XX, Charlie equipment our and and working President the further of security to the the working past domestic Supply provide Bob processes feature keep of remain are years. for over to schedule company supply of Vice as for in the which has SVP lab economic McKenzie latest years with transition with receive downshift our We from This operational costs the will to week, Foell Chain. in growth, his our and remain unit Charlie XX and and optical Charlie will fourth Texas, our on we We and to our of the Last year. lower June special closely Bob chain capacity the lab labs.

deep to We of a of bench Vision. National experts are experience at have fortunate optical

view one investments our to of regarding we starting the and our omni-channel leverage Lastly, customer. are capabilities,

In Online for remains in continue especially to see exam. eyeglasses. and retail improvements penetration the online of scheduling optical into addition, the we modest, sector eye

years, me going Patrick point, omni-channel for turn important curve. we that the is a this However, At future we ahead to optical the channel or ever results. more process in financial believe aim this more and to be of our let of detailed over an buying approach of blended be an call to part discussion

Patrick Moore

Reade, and good everyone. Thanks, morning,

business growth. our growth positioned XXXX. to perform noted, comparable Turning business well are for to balance of the continued the Reade Slide revenue X. is drivers and and quarter fundamental store store sales two new well on likewise And as first our of The

During America's we XX quarter, closed stores the Best location, opened our all brand. in new one and

year-over-year we quarter. X.X% net entirely openings Over Eyeglass the new stores Best added increase, unit brands, months, our increased a last two with the or America's brands, and the XX growth in World where XX have these growth in XX% almost

Our markets nearer openings store awareness. where towards and markets, and invest these our skewed in building continue ramping XXXX stores new expand base and are we still to planned are our

can take noted to mature. years new five three stores to have that We approximately

growth customer see adjusted a We in the and potential markets at are our basis. our The end increased XXXX sales year. our comparable a average outlook X.X% versus comps presents of of chart calculated the high there. and on by Same-store cash the excited growth ticket. and X.X% in customers first lot these sales The transactions last of store increases driven of was quarter increased growth comp about

from the During first from in America's revenues positive benefit and eye Eyeglass all again of shift of Legacy growth, X.X% quarter, we brands. points exam increased estimate and volume the drove XXX we gains growth with to World basis generated quarter. to X.X%, Of in tied FirstSight. respectively. X.X% first resulting five comps incremental Best the comps this

transition, in are the the be segment Legacy we Excluding continue of the encouraged benefit results positive. underlying to business this that

we're Additionally, our trends with Military at pleased Fred comp Meyer smaller the host positive brands.

from benefiting improved Our host were legacy businesses execution. store and

statement Turning Slide on Net revenue income XX.X% to million. X. to highlights $XXX.X increased

on points the and the elimination in experience FirstSight three first operational profitability. quarters in XXXX, of In changes the the to will revenue which was first revenues by impact reduction approximately with that the nonmaterial company basis impact the net million During the a $X costs effective XX associated occurred over of million, lowering $X.X growth quarter, revenue XXXX. had of

As XX% from higher pronounced store XX increased EBITDA EBITDA with a the Reade last Adjusted year, impact in to and points quarter. X.X% to adjusted the mentioned, compared the weather in first days of March. most we quarter fell experienced closing basis margin level

call, net impact new change As well public first due indicated of slower incentive on million. of timing the and as our margin deleveraging EBITDA we in quarter as these timing approximately last growth to $X in The costs the company expected was compensation. unearned the revenue, items the of

quarter would Our XXX first excluding basis these the EBITDA approximately impact been three growth points of have higher, items.

As a deferred not not care revenue do benefits programs statement. revenue. warranty deferred revenue results club is current that amounts and cash reflected and from eyeglass period as cumulated our in net our and reminder, adjusted EBITDA income Recall reflected include eye provides

Cost was or revenue. applicable of basis of in XX net first there of write-off million XXXX, year. For points increase as XXXX. The deferred decrease a a revenue last revenue by was $X.X the decrease quarter primarily in a $X driven X.X% the percentage versus inventory to million net increased first of quarter

We due to coverage also to geographic wage expenses optometrist-related inflation certain continue in and markets. expanded higher experience

driven compensation are a we XX.X% equation. good XXX competitive to SG&A this very and work an they salaries work attract part optometrists, expenses. network that items our important incentive in of expense is quarter and that pay and our increased and investments ongoing laboratories versus omnichannel-related the reflects of of capitalized $X.X a the versus stores, investments to last retain glad advertising, of represents SG&A expense The year. Interest earlier, million of offset paydown hard due quarter to the interest the We partially the last of growth or year, reduction The first as do. of an increased expenses driven our of performance-based last the the Depreciation by quarter million honestly million and fourth three deleveraging last revenue, public in an and increase This $XXX XXXX. associated basis compensation, extent, increase incentive points of compared derivatives. million year. by quarter amortization incremental for For in percentage levels and payroll corporate by net $X.X debt to our of $X.X to earned This net million with new store mentioned fourth change debt revenue compensation. and decreased $X.X were a all company costs primarily was contributed year. IPO optical in lower occupancy our to the lesser first optometrists,

XX.X% quarter was first as the compared initial tax Our income the option XXXX the tax to income the XX, which the tax reflects a quarter, $X.XX XXXX by of exercises. million effective income EPS Slide $X.X increase benefit in year, from total benefit approximate income public effective from as for XX.X% tax tax Tax $X.XX shares offering. in of Adjusted Act. cash Adjusted $XX.X and million to which of decreased decreased our to and was last first federal to first at was the balance diluted compared the of Also result in rate stock included the provision company's was quarter was the quarter million. in option rate exercises, from debt $XX.X to our rate XX% our our compared the XXXX an the to $XX net X.X%. million was million excluded statutory $XXX On end

our revenue now guidance earlier new contract acceleration annual club impact a will rules. impact ongoing of the period. eye have The in The required new revenue standard requires the sheet balance recognition. minimal to revenue of Our new implementation revenue from reflects recognition care

sales at our a liability there revenue However, approximately $XX care for quarter. reduction our first end deferred club eye was of the of million the of

total the approximately XXXX standard to revenues $X have expect We a on impact favorable of annual million.

by over the quarter, flow Cash capital increased growth with in $XX.X we focused $XX activities million. the initiatives. invested of million on CapEx provided For majority expenditures, the operating

by during XXXX. tax Our cash aided ongoing cash will benefit from the be reform flow

view Let me this of flow. of provide an update our cash for usage

years, over a and last continued well believe position time at rate been that for a Given great at several are the have reinvesting are growth. we this in that we high consistently we positioned

assess strict improvements online. stores We with discipline approach and investments, we have to any investment our continue We growth for a investment capital potential new technologies value. drive in customer-facing with employed, deliver including the to always returns that goal shareholder

balance We that are time. sheet also enhancements options would continuing to result in evaluate over

year-to-date, billion performance XX, $XX billion. million net are a adjusted $XXX stores; X% Adjusted Slide opening of in and growth and to EBITDA our outlook new $XX $X.XXX between comparable follows: million. million million adjusted reaffirming of on our based $X.XXX range revenues to and as store fiscal Net XX X%, to Turning we income sales between approximately XXXX $XXX

and of cadence the adjusted business We range. to year believe couple progresses, locations the in half. growth adjusted World while will is America's expect planned Eyeglass Store project openings timing we X% reaffirmed Eyeglass brands typical are EBITDA continue in responsible outlook, the continue mix be World of it with to the similar the second year. openings to openings to our Consistent of growth the remainder XXXX. each EBITDA second is closings the Best the improve Best the with stores, across The a We half to stronger openings plan prudent rate as in predominantly of these as between generally to will a year, the being a this of consistent XXXX. America's with relatively X% follow year during comp

incremental in public expect despite relatively $X company a be costs stable EBITDA to margin on basis year. million this adjusted over We year-over-year

continue our rising capabilities. and in managing on an in focused build growth environment omnichannel highly to wages, reinvest are we of costs and We out

year our we rate tax XX%, exercises, cause to tax to could continue quarterly full XXXX some including expect of modeling purposes, stock option in the rates. impact fluctuations be our approximately which For

annual million. confident Finally, and interest million expenditures depreciation about $XXX $XX remain million in million XXXX. expense to between million $XX million, $XXX to $XX of commitments $XX capital we financial we estimate summary, and of In amortization our and for

We are of year. are executing and we XXXX believe well for growth our the on positioned balance initiatives, focused we the

Now Reade. the back to turn call I'll over

Reade Fahs

you, Thank Patrick.

Slide XX. to Turning

late Walmart moment the of from open we take interaction with questions, Before let letter Centers. XX-year-old a of me was Vision a In mother a who up boy recent our struggling received in we share call a customer a headaches. to one to April,

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sometimes, a business efforts. our be fortunate can save profit We're proud to we team fast-growing have even whose engine a And to success is This too. lives, of. fuel

This are low-priced are the be the Times ecosystem health stated X We crisis problems untreated exams, simple to We work providing at vision billion to remarks. improve be lives article A May on glasses is Eyeglasses This never home continue believe that our heard retailing the Brian X biggest to York the of. would social to consequently well of way optical to those time, dedication eye you've and we while at best enterprises strive bring start optical worldwide. philanthropies. of I'll New glasses progressing work at the to and session. concludes back a contact to and prepared lenses is why profession. our this sight And unable see turn noble to we call otherwise. Q&A and who those our abroad,

Operator

of And the [Operator sir. line with Instructions] come Lejuez Paul will you, first Thank our question Citi. from

Your open. now line is

Paul Lejuez

That's think how as if I the expectations, and negative the year. at in what guys might as your Thanks quarter reiterated a during surprises, they influence the you're total, rest even as for small the quarter with as whole, your be, curious might can I’m it guys. year? guidance of I'm Thanks. in positive thinking my first were the and about that you came look the one. and you line curious,

Reade Fahs

like accounts. Good. on things let's we test positive as through Mr. do it, of we all see, the the still quarter control we we Net And and on our we success. well to We that continued improve, and positive things markets. consecutive side, sort that we had out like that World sort we those markets store hold campaign good We and openings the And customer so fact Well, what another of by with that do like there. and like expanded new that, Promoter Scores all, all worked came the we positives. that driven

selling and sort stuff negative the to less on sort I'll say On patients late. I'd the season. in of lengthened and optometrists peak and happier I'd been not which our is same refund season. say associates and means system. a time. thanks It a lengthening and the our It way side of about coming lengthened all our selling the the -- the tax plus the for that of labs peak there's last had that at as makes of was selling so sort concentrated sort season. on more same out peak customers happier along the our the versus say for stress time that selling season there's of it of everyone sort door We of sort more year, that And weather March, side, one a in weird the nor'easters on out has of

took like there. So we place the lengthening that

minuses. pluses are those So and

Paul Lejuez

XQ sort whether of any And quarter and pent-up you quantification maybe you do there? an impact in expect guys the you. in what demand what from negative did the Got of do some

Reade Fahs

lose about QX. in XXX we on our comment We store current did quarter, but days don't

weekends impact. big -- when matters So days when store it and hurts that And even also those their And days, that are. more. was selling that's real

stay earlier, eyes their need As to eventually. though, customers at come and I home, they mentioned our gets worse

Paul Lejuez

Got then warranty And And programs said eye XQ and last care membership by I club you. lower slower bit last a revenue driven was one versus partly sales me. sales. was for think Deferred in you just in year. growth that

Just wondering that forward. slower reason for items, going what thinking should line if was we expected, about the on sales the those and how was two that item be

Patrick Moore

Yes.

side, sales on in the deferred So being the are eye care programs. revenue penetration club care affected by our managed increased

So, have offering Paul, or exams over the are care, as obviously we separate. saw to the years. managed eye exams get are multiple And option few club, in the customers that we exams three the –

our managed good So increased club is revenue growing a the sales. we growth there in business, late as overall decreased warranty. but growth in little Warranty than less relatively those still we care

Paul Lejuez

Thanks, birthday. you. guys. Got Good luck, Reade, happy

Reade Fahs

Thank you, Paul.

Operator

Binder Thank Jefferies. you. line the come Dan And from will of our next with question

now is line open. Your

Dan Binder

from birthday well. happy as and Binder, Dan me it's Hi,

Reade Fahs

Thanks.

Dan Binder

vision insurance around question the penetration. and My programs your was

is bit update a If of little you margin year-over-year, could more much you and get. expenses. improved give just just how And us there much rate around think how has on question an then second do to gross a that

as those in Just items were came if expected there. if or there line any in curious surprises

Reade Fahs

traffic comes from it's care we the underpenetrated of care, So most were taking relative and we few less managed historically nicely. so managed they that's of bought than When for we their the and on insurance, is in are reasons. are And that of growing America's We for industry to a that a our underpenetrated reason. have -- one weren't of target managed care the most frankly, lot industry, the us front, even consumers for uninsured. Best, said majority

out they nicely. So directed insurance, a they're absolute it's being to but best the there and seeking not so don't value, have network, specific growing

episodic are see in that get are managed there in present to plans and that always way. the episodic not then We into in. I'd that's And not the an along past in, on said care. nature, we potentials continue incremental now sort of There growth you're it's of yet here it plans. in traffic you and and basis, plans that to opportunities the your

plenty industry, the growing to opportunities underpenetrated still for managed of care. relative So nicely, the of our competitors, continued and expansion market

Patrick Moore

– Patrick. then And Dan, hey, it's

the expected million QX teams where margins as inventory we of If $X gross kind of bps. margins, write-off on help those last to we that. margins about around up post, In of only and for what of bps, of you'll exams. we wage we're consistent little XX terms see down increased offset just by what we associates expected we had in in XX pretty that's there in even a a and with we were level gross terms at disclosed, level, the yes, owned in year pressure generally gross seeing bit zeroing are eye But overall a expect. But what and general,

Dan Binder

was line, too? side in expense The less more Great. or

Patrick Moore

please repeat you that? Would

Dan Binder

the was expense in or as saying, was line well? more less side I just

Patrick Moore

Yes.

million were items a referred basis On out. key XXX quarter. simply get the early impact to that three half pop want the three we of that rollover to on the that QX affect this call little will actually $X having said items code I around and of SG&A The side, we plus that over was called the March I points, I back in that up year.

the The second impact quarter in unearned XXXX the very at was of quarter, of the we've was revenues timing really and incentive on guided we about finally, fourth discussed being a all the that back of more then a were as XXXX. the And in that and quarter. end versus had comp, low negative

moves As moderate on, to we the that a year expect little bit.

half. in We a little the also second discussed that we the profitability stronger levels expect

think will I come in that all So line.

Dan Binder

Great, thank you.

Operator

line of will next Fargo. come the from And Wells question you. Thank our Fadem Zack with

is line now Your open.

Zack Fadem

you range? to to X% comp America's comp X% Hey, as move the anticipate to your where year, us through in any for of at guidance to for you each your throughout walk for be above year? low more good expect on the we a the Could be expect And little range expectations detail? or morning, there this guys. Specifically quarter range? the do Are you quarters that you remain do within Best, the end

Patrick Moore

Patrick. morning. good It's Hey,

of not range comp the in So seen, aren't consistency if guiding over some quarter-to-quarter X% in for took have a comp to we we is at terms the the at guidance year but X% of the do, big longer we level. probably you've The – time, fluctuations brand period nice year, the we -- we annual time.

look in we peak year, a about will discussed obviously, integral. kind QX of then little somewhat communicated bit tougher. the little be but last now. of out season QX. strong you Reade's impacts And have rest But mentioned a the at QX extending If have the talked we QX, year, -- those little we

So that’s terms bit for the of probably insight comp of cadence the little of a rest year. in

Zack Fadem

Okay, that’s I’m speak brand could if you awareness markets. your curious, to And in helpful.

how the of to typically awareness does this you forward? all, trend? And ad internally? do metric improvement markets market, when brand new newer track improvements And comparing your in First do going with existing you anticipate how campaign

Reade Fahs

massive We throughout we’re the we advertiser. have believe so year. have We category into that awareness, watching basis, pretty because come consistent but that, we’re this don’t brand fluctuations on a periodic and pretty people evenly track

beginning year. the year, advertising at we marketing of evenly Last throughout year. generally we the So keep national started pretty the

not time, so that is more that that New in are awareness York belief our see we’ve and stores yet say in stores aunt My even markets there of we’re are they if believe us, open in. all we people she our aware yet. so to building And city, the [ph]

Zack Fadem

modeling other the the if more, And you expected And just consider should way factors little segment? are a relationship year? in any evolution one ask or one when we us could with update could it. anticipated I there performance Walmart? out this Any bit there on the the Got

Reade Fahs

strive them for partner ever account We’ve had. been We updates be that any very years. We Walmart with been executive continue relationship to I’d the very years. don’t their working XX to the best have on good XX is for strong, XX relationship say I’ve for but that, I’ve years, personally managed place.

Zack Fadem

the time. Great. Thanks, Appreciate Reade.

Reade Fahs

Yup. Thank you.

Operator

our question of the Goldman Sachs. And Matt with you. line next come from Thank Fassler will

now is line Your open.

Matt Fassler

and good much, so Thanks morning.

you during sales whether talk a rather trend. hold. if could to Eyeglass ad brand? that First relates material on when that to the there start have comp for well relative campaign think new that question up for to And in to -- about impact starting is also quarter the The that curious take brand really World. And held you

Reade Fahs

Yes.

advertising category pretty strong have advertising immediate So a tends this effect. this to category, in in

plus. You very and pretty a real we’re encouraged quickly, the see and beginning the that’s ads them. the it quickly of started And by quarter, we in

a real So it markets leadership think but at World, in real Overall, so and all stores. strong they role, product, wasn’t Eyeglass team a expansion that played there. in we’ve the we have I the had strong markets, strong we think labs I yet got there’s a control in real

also, is nice we’re and component about We’re add strong what to to advertising. brick for it looking a traffic that of

pleased we overtime and I’ve World ever it I’ve that years ago, since ever said it pleased. now advertising bought think, I since there I’m with been here bought Eyeglass quite the and it we

excited of and it start going and are World the sorts with Mr. have Mr. have stores we think contests around campaign, in and taken pictures places. rallying also a getting and and World by involving they it, fun all of strong I

You can them, That’s in the year, the end to air of had we a World. where the we there’s at conference just clear World to introduced to when group just a and store the feel last nice managers there Eyeglass Mr. at and us. real campaign sprit is excitement brand

Jeff McAllister

be the this customers It can’t to think life. I without happiest Hi, new just play. has be in team brought Jeff. is first ad creating I’ll an back world’s campaign ad add the to with really

substance to best in can And I eyewear. sales see show think think that they’re that in most the performance. their shop the NPS fact, actually for the our and we the up customers in are, place you demonstrate buy to and creating overall I

So couldn’t be more it’s delighted the showing way up. with

Matt Fassler

If Best. to America’s I second back could ask a question

So this comping annual average brand basis over XX% been last have an that about the years. on is a on four

a impact, and past two else been the there’s so sounds the it accomplishments that that’s That year that to level so against that out understand a little ecosystem? to for lowest a years put on if help percentage it, going seen allocated couldn’t plus, you make to like its we’ve that the long? point cycled anything across America’s less map dig store ago. through Best some trend are see for The said, businesses. probably you on the certainly deeper curve XXX tax this comp is there wanted compare comp and You’re up any long. reason have reform quarterly competitively why refund, and evenly back assuming Is propelled might the guiding business. is, subdue from -- way in not has just cycling? than the think, I so that in on the that tax put days Are Any there consistent I

Reade Fahs

looking any think way. the storms season, a for I still spilling last coming different talked that in it’s the by There’s and was the about, of out was influenced the that weather extension -- But the QX it positively we us concerns nothing you’re that or that QX impact, year there factors peak at And the no, competitively more that raises the fact is in over. along.

Matt Fassler

And one. final to believe where was worth Q, reference some qualifying? one that there wonder if in vendor quick just very material the to credits Gotcha. I the point the was it’s I in quarter. then

Patrick Moore

credits vendor and and that actually, -- year something routine points we’re in We vendors. certain didn’t entire hit some year the and seeing are at rebates like the across out. quarter, certain on marks normalize of it flow to every us look Pretty funds would for there

Matt Fassler

guys. Thank Gotcha. much so you

Operator

of with our And will line Drbul Guggenheim you. next Securities. the come Bob Thank question from

Your line is now open.

Bob Drbul

good morning. birthday. Hi, happy Reade,

Reade Fahs

Thank you.

Bob Drbul

ability percentage I the ask you’ve in expansion little then is I’d the pressure New you you on the and is update York program talked talk to performance especially think but I questions specifically as can wage like optometrists, I a just the you and that wage pressure the can that those stores? -- attract the it as to relates guess bit just or entered second some openings that California, And areas? to of where those about business, question The us the stage, on the of in there about have new underway from around,

Reade Fahs

competitive yet, out been that not And XX% so I reasons. not market commenting also over because to markets point performance about you for there. not for will markets market say of them every We allowed opened report there's we're to mentioned, But are the competitive I'll due ecosystem. has even specific year haven't a – specific a commenting on

Jeff McAllister

our about able retain And fact the for the have to Vision. competitive wages. we're and supports that we and actually the optometrists with and And just Yeah. it like delighted attract doctors. really to National with think we're at our like we goes with to we're practice. comment that to tier Feel dialed It about their Again, I’ll a our bit has one place ensure to optimistic so entire delighted career, performance optometrist. be beyond practice their the for we that up their really we best environment attracted are feeling being to them be very

Patrick Moore

Patrick. Hey. the a of more And the I’ll it’s on little kind on just performance. store add

different, around three in the stores every years a are different. take markets stated little So, new every to past, five are we’ve little as a stores

there. lot a in markets. new existing be they'll be taking focused those that We’re of see our obviously potential And in getting to markets on excited we're so contributing these share speed customers up We we're very markets. and to

Unidentified Analyst

much. Great. you Thank very

Reade Fahs

you, Bob. Thank

Operator

of Bank of Lynch. Thank America Merrill with will next our come Ohmes Robbie you. And question from the line

line Your open. is now

Robbie Ohmes

as me well. for Birthday Happy Reade, Thanks,

again you should I So and you think ask remind sales. how tougher we drivers are comps to get want comparisons Can comparison, about up just the question as as the same-store to coming on the tougher? against us the maintaining

Patrick Moore

Patrick. some able insights still keep give you It’s comps We traffic. Robbie. Hey, there. aren’t to I’ll driving with

to it’s by flow but but are tougher not absolutely I hurricanes and think QX and QX hurricanes level QX, seen we’re a comp two QX eyeglass little we quarters, traffic, This in have driven In as in have from some QX the quarter, traffic. into remark bit or of planning QX. we some down about and for ticket,

will that easier. think little we so And be a

confidence strong X% in comfortable range to have X% the We deliver to and of that. feel guidance

Robbie Ohmes

or stores, too weather whether you’re below enough on early tracking those And above the the then impact really know was greater on us New York for stores? it’s expectations new that to

Reade Fahs

We’re not markets. commenting on specific

not And so reasons, we’re before, said doing small – anyway. still relatively in for York competitive process as New we’re but I

Patrick Moore

Fairly early.

Reade Fahs

It’s fairly New right. York, the early Yeah. in

Robbie Ohmes

Got it.

Reade Fahs

what store Jersey If in we’ve look to you the is it’s northern count, so tended New lot a at far.

Robbie Ohmes

guys. right. Got it. Thanks All

Operator

Stanley. Simeon And Instructions] question the our Thank line you. next come will [Operator from of with Morgan Gutman

now is line open. Your

Joshua Weber

spread. today. versus Weber. the presuming best Question Joshua on I’m America’s it’s Hey, EGW the

in the ABC that you the you out come would rolled pickup how a will EGW you attribute once Owl sales to first are EGW Campaign? they fashion a for So time, And advertising? at to seeing similar much did

Reade Fahs

all way, the got it definitely when And we’ve three got together traffic driving make stores there, right it’s I like advertising the get managed This advertising manager when you’ve you that certainly and have when And store. got Eyeglass the much sure works one. those and district in is only the comes a when our things consider me manager in results. stores, think I happening the right World. factor in but and the store product, not right you’ve all care, you’ve running your you the people of in drivers it’s engines got in

Joshua Weber

Okay. There are you that chances could…

Patrick Moore

a so reform add for XX-week we want year half sales. to just where gap X.X essentially the and tax I there that as year, just X.X XXXX. We quarter. earlier that last we I’ll were weeks two Patrick. had the XXXX for there month, where it’s was out about good in Hey, referenced had a think a comps did comp was of with ad delay, a

quarter the and that in last title that performance understates can AP back at year. say, it we was th So, X.X, probably

years three there, XX%. getting close So, we to of normalized are profit since looking they back kind

Joshua Weber

right. All

Jeff McAllister

of did And they tougher Josh, your coming I I’m year. – quarter the – last sorry, X.X% question sorry, to real that had first got a in

little comparison, mix that first a lighter So is often…

Joshua Weber

business? Okay. eye comp is the legacy and held And exam exams the contribution then the mentioned America's Eyeglass from unrelated similar you Best World in and

Patrick Moore

Ask I that time, to… more question one wanted

Joshua Weber

comp I’m just curious the exam between out growth to comp trying we’re break growth? and eye spread product

Patrick Moore

legacy. a And coming like in. of of segment are is first amount little plus that in from million over cost, $X.X backlogs transferred corporate in lesser Right, And other the legacy, the but skewing transfers. it’s terms terms business

Joshua Weber

Okay. Thank you.

Operator

showing I’m time. no you. questions Thank this at further

hand to over call like the birthday I’d Fahs, Reade to back very Chief and to Officer, comments for remarks. now, a him Executive wish Mr. closing So happy some and

Reade Fahs

for to Brian. today in you you, for you’re you all interest doing. us want what thank joining Thank We

you’d we to If a included invite you on like Best America’s your a watch both thought and World, link for we’ve moment, know our Page ads you presentation. XX have Eyeglass We of go to and television we online that thought very this developing your way forward quarter XXXX. results. look in We of later about were second none about questions boring. them all and talking summer to And again you to remain that excited any our we were cool quite

Operator

your you thank gentlemen, and for our does Ladies program. on today's participation conference. conclude This

Everybody, a day. wonderful disconnect. may You all have

National Vision (EYE) 15 May 182018 Q1 Earnings call transcript