EYE - Earnings call transcript Q2 2021 | National Vision Holdings, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the National Vision Second Quarter 2021 Earnings Call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. [Operator Instructions] I would now like to hand today's conference over to your speaker, Vice President of Investor Relations, David Mann. ahead. go Please

David Mann

good Quarter and Welcome National to Thank Earnings morning, Call. Second XXXX Vision's you, everyone.

Joining the Officer. Officer; and me Chief Patrick Fahs, on Moore, call today Chief Financial Reade are Executive

the Investors Our issued be audio during call, and of both earnings are webcast a page archived call. section will on Investors website, this and will the the release available after our be the presentation, morning replay referenced the which on nationalvision.com, the of

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

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

National of website. our reminder, certain supplemental reference section Investors materials to a Vision As provide investor expects the or presentations on for

turn me let the Now Reade. call to over

Reade Fahs

thank like Thank all you, David. to joining you us Good would I everyone. for today. morning,

And trailing over our patient the National hard results revenue in the Company's dedication the due collective challenge $X Let's billion. our net Vision work, been year time history, for have first to rise to commitment to begin team our surpassed remarkable. past by thanking XX-month continuing for our to and our care,

QX of Slide summary to four and a results. Turning

in our quarter extended fiscal comparison. in significant closure is our more XXXX for of from our to we XXXX, due the impact release, spring compared voluntary of of to the XXXX noted believe the being operations today a press results basis are second the helpful As

our and sales and bottom line this read have led by for segment store XX% we top line the adjusted with the revenue America's legacy and COVID same comparable of many you second over release XXXX outsized increased delivered industry strength as XX.X% in over morning, growth was is of from As our years. growth that earnings evidence second performance Best the the strength our Net broad-based that year well. been quarter period. The growth experienced quarter. benefiting have in The exceptional World iPass has brands, we the hastened that we at last further trends over with top

quarter believe we operating and XX We Adjusted increased to ended the to profit. $X.XX, XXX% are which We increased continuing income confident are and that stores grow that locations. during another share our this quarter should second opened new record and for X,XXX with XXX% continue. market EPS established adjusted

pandemic our take confidence minutes, gives our in results is Finally, over, we this our XXXX through year-to-date journey inventory detail. in the more expectations, progress quite a you full-year Patrick first In to our will week. simply published greenhouse our clearly our momentum and continue outlook to and ESG few QX QX raise outlook. us while exceeded gas not our updated

X. Slide Turning to

over Also, are growth with in to This provider June last reopening a sales the of favor an XX chart continue industry a healthier of past including XX top grew positive instant even year. return remains industry government industry source, shows, store prior like last two better-capitalized comp results to closing stimulus grow to performance factors, significant has number checks. retailers a started have nearly our of leading from basis quarters continue National priced year to from necessity. According XXX being comparable Vision. highly market and opportunity the an decades since XX%. we the larger, confident value of to medical demonstrated out trends we our exceed with to the fragmented, market to benefited Yet COVID retailers our the a strong optical value As business and consistency likely share points optical share. the remarkable QX

more business As May to customers back mobility the vaccination in played role increase as in quarter healthy can continued, rate stores. rising remained bringing and June patients a our likely and

teams remain demand for this meeting and low-cost lenses. exams, store focused heightened Our contact on eye safely glasses

our factor safety in patients resonated believe have mindset strong our customers our to safety-first rigorous that with performance and protocols and have continue during pandemic. and a We been the

June with to pleased we exited compared record are transaction last with performance. our momentum trends as positive year's We

In among pre-COVID with back-to-school to uncertainties in early, continued in that XXXX. second X. gains. America believe were we a second the ongoing by the we seen is terms and more to market fastest the path optical a half, sustained we growth data, quite see have this is with North Based trend its to aligned retailer Slide we transaction largest trends season share year than on the sales Shifting COVID last of ramp expect We latest of growing. has in and traffic industry positive the back-to-school it The variants. And continue. while still begun amidst that QX and

our on maximize our provide to update opportunities core strengthen further me our growth Let initiatives and how competitive plan advantages. and an we

XX XXXX. We and space open XX to as we potential stores white nearly pipeline of stores store this the in currently to remain total XXXX. and continue primary sizable year a for well stores New double locations specific year-to-date way We about see are our current solid have a our a into to opportunity on with focus footprint. opened

that to to the to success. plan their team estate sites us is due year real including find fit a formula in locations our worked Our acceleration is World for Eyeglass openings ongoing the next in modest executing past, support well for that

and two very to are engines America's highs We achieved World. brands Both during have Best new pandemic. in fortunate have the growth Eyeglass attractive

We at significant locations, sales potential our Notably, gains growth $X revenue delivered and of what the jump net saw exceeding the volume boxes our of can in million, mature a are excited by stores. number stores the network our showing thus store highest at annual brand newer strong across an with both achieve. we

strong network hard Our our have without to last and patient over admirable not performance and this care X,XXX over year the the commitment would quarter been of possible optometrists. of work

the optometrist education over our from network. of we retention our example and just is in to participating held invest friendly for record education X,XXX symposium continuing our provided We retention what to keep opportunities makes One with continue ever networking rates optometrists healthcare levels. and an programs to This noting June. high recruitment program optometric-centered successful that worth and in doctors near company. optometric more another us We

more time As we optometrists always newly of new excited are year, At and destinations for the you grads. are the have to graduated this top one we before, we to National heard seeking optometrists. are believe of these me say welcome family Vision

traffic quarter. of terms a level in returned factor typical In continues and this we customers marketing, attracting key to our Marketing stores. to driving more of be to a spend

during strategy in investment and consistent beyond. to television the opportunities digital Our pandemic and our maximize both grow with and is market share advertising channels

the result, leads customers a in happy of that excellent continues patients We to low word-of-mouth new positive satisfied repeat role referrals. we mouth of word the and are driving key and pleased customers customer a have many to play acquired combination prices customers As service from believe and comps in positive QX. to

a resonated protocols quarter. that patients continue managed see tend we these ongoing tied care programs have remain relative to remains first with safety our dollars and here further our as than net underdeveloped in and opportunity to partnerships during customers the Strong believe elsewhere. approach continued Additionally, revenue in category the second and comp Participation positive go driver. in an We the stores pandemic. to to vision insurance growth and co-pays

Regarding our chain, elevated lab supply handle adeptly teams eyeglass have continued to our volumes.

a to is lab a solid capacity that positioned in place needs remains record the are inventories projected remain trends. despite and position provider. Our a future reason low-cost key well we sales handle Merchandise the network in with

have disruptions impacting significant Our of have teams environment to To-date, hard are worked any this other been sectors. chain by the maintain we not flows. merchandise supply that inventory in impacted

our initiatives, to as In throughout efforts the journey. customer to to patients expand as continue and of see capacity advance we improve engagement terms digital to Omni-channel well opportunities

Our remote efforts that are with we medicine pleased remote provide. exams flexibility and in the continuing, are the additional progress and

with this me be entire the our Vision QX work and due Before consistent that could I team, I the every in customer in like to and pandemic. their these a every patient over of environment. turn pleased more the to many commitment time. are Patrick, National and the of the performance at the could call for and we let has say hard have to Results execution patient to team service how one safety, challenges care one more respect customer store, day not not risen

we reopening we since to and and confident and strength. in ahead, ability growing last the challenging safety-first environment year environment economic consistent COVID dynamic performance remain potential remains that a position our are and Looking variance risks a with of of given volatile recovery, appreciate navigate our our approach, uneven in the

Now I Patrick. will over turn call the to

Patrick Moore

truly last our second everyone. appreciation over We the Their and Thanks, my of ahead work sales quarter and extremely enduring like would hard with for Reade, business our remarkable. good I also the as express morning, results team performed and dedication. expectations. their to to efforts the pleased were have been earnings year

trends driven leverage. was excellent store solid positive and execution traffic performance cost Our by level

significantly debt. maximize we the addition, in our continue business In to while our grow to reducing opportunity to share reinvest

the we XXXX. by closures results reminder, temporary year. a comparability was the reported results both Thus, shared and versus XXXX store last As of our have affected

made comments to comparison. more being which Reade today believe are As a our helpful is primarily we noted, XXXX,

let's X. to Slide Now turn

continued compound revenue rate or revenue The QX XXXX over XX%. reflect Our timing unearned a our of the immaterial in versus X-year over increased XXXX. business. of strong was momentum results XX% Net growth

opened a we Eyeglass XX During stores stores World X.X% for Best store store X count. new closed the in quarter, increase and and America's two

over was record Adjusted XXXX growth growth over strong XX.X% XX and XX.X% sales transactions. QX the up primarily For Eyeglass XXXX. over to when opening over sales increases months. growth lacked both America's Best for driven June the We in and by and broad-based our customer eyeglasses XXXX Shifting components. higher in throughout experienced lenses were results store same-store World increases increased growth year. customer comparable the was and transaction The content we positive combined, last XXXX The last and comp brands unit including unpack X.X% transactions. driven comps counts quarter, by

to margin Turning on highlights Slide X.

of This pleased increase expense expectations. by depreciation percent optometrist decrease eyeglass factors ahead the while adjusted our points XX applicable The was adjusted quarter strong or offset and mix leverage margin fXX.X%. Adjusted this basis achieved strong SG&A increased Adjusted XXXX. XXX eyeglass about which investment. higher behind margin and fixed basis cost, advertising increased corporate decreased continuing of XXX by partially decrease eyeglass mix net by operating costs, to margin. income percentage comp revenue for and the growth this points the a XXXX driven margin to to was compared revenue, increased of net incentive We driven $XX.X XXX lower The in higher of with operating versus points operating and was XX.X basis million cost As key business amortization. to from the in lower occupancy growth. the of leverage revenue compensation overhead eyeglass million XXX% and in performance-based higher and to decreased were points were sales, basis expenses reinvest and leverage

performance flow-through for the QX are last a of quarter experienced diluted factors, in of with EPS unusually we another XXX% all the margin As thrilled our company quarter. to another exceptional four By $X.XX. and Adjusted measures, quarters. and delivered strong these result increased

revenue exceeds as all to XX% for Year-to-date XXXX. Turning net with nearly our of XX% to XX. to $X.X EPS $X.XX billion Adjusted EPS share, income XXXX, increased diluted which adjusted adjusted Slide compared operating $XXX already increased of million. per to

past growth customer-facing technology continue and $XXX the updated quarter, public XXX second to million. XX to Primarily stable total $XXX a XXXX million, balance CapEx, or our million. our in turning sheet. Slide and XXXX invested At of our for intensity approximately and net of lowest range of was improvement our expect new store was Net our outlook X.Xx Year-to-date, balance to the and Now years. capital as With line in XXX for million top relatively CapEx over net project to to few to revenue, debt decline expenditures. significant end capital EBITDA and cash XX the the we company. was adjusted our a investments million leverage X% our debt point we

Slide to XX. Turning

of cash we Given corporate back XXX our to applicable financial and A Reade reduce agreement modify also flows, to credit resulting term Moody's pre-COVID million our for we noted, and the as to BAX. performance Also, loan rates repaid And interest rating credit certain debt the June. amended in strong margin our covenants upgraded levels.

We with improvements these structure. are capital delighted our for

very We from balances our of the and cash with position We to strong continue available in liquidity advantage. our financial a to XXX from competitive capacity ability be a financial rule believe that our strength million and invest remain offer. over

our raising fiscal Slides given Today, XX now on Turning our outlook. performance, outlook the we are XX. to year-to-date of and strength our XXXX

our confidence environments macro remain our While the consistent uncertain, in operating heightened year the performance over last us gives business. and

COVID. related reflects the to outlook impacts currently Our expected

driven related to material current anticipate the the actions a pandemic potential variants. The volatility as currently government uncertainty to ongoing or deterioration business and company's regulations. result we of assumes COVID, outlook significant no However, operations by

reminder, XX%. to the over Adjusted EPS adjusted comparable know the is diluted XXXX assuming backdrop billion to between a and XX.X $X.XX of revenue today, year and an the and we represents Against of in million between As adjusted XX-week revenue XX% diluted of X.XX increase growth increase outlook our a billion; between XX% operating XXX XX%. average the projects our fiscal diluted XXXX adjusted net last in XXX EPS to weighted $X.XX sales shares. million nearly now XXXX, net million, what X.XX to of outlook comparing Compared store range period midpoint of XXXX. income and

Our positive guidance as we in of spoke of reflects more the quarter May. strong view the second the flow-through year slightly results second than as half well for the last a when

this second flat significant higher the outlook represent to revenue and the to last teens. half in year XXrd Compared XXXX, grow-over would generally with now challenges week growth Our benefit. in the be net to due projects to mid-

by terms of we expect third heightened both we to and generally positive growth. further expect comps, the underlying level transaction continued demand driven the moderate. of quarters, In to comps flattish in Over time, continue fourth

to the in decline profitability the to Our strong as margin exceptional XXXX. in still a increase continues compared XXXX, outlook expansion half profitability project in would represent lap a second but double-digit we in

net be with line in the of modeling than results quarterly higher we revenue in continue purposes, profitability expect and For QX. to QX cadence to in more XXXX with

For full-year to a revenue, net percentage cost to XXXX, points as of we last basis XXX expect applicable XXX year. revenue to versus decrease

performance benefited record well. as in our the both some second to with reminder, two quarters an of the mix next a expected half elevated ticket expect that we As product in from XXXX and normalize pressure cost shifts

China. outlook to tariffs on Our import that continues from products assume we

points are cost about to revenue QX, XXX to foot year. For of XXX book expected basis to increase last versus

revenue is XXXX expect we of higher between as net primarily performance-based terms The incentive points year-over-year. adjusted a return growth increase normalized basis we expenses, more percentage this of tightly SG&A revenue XXX levels a of corporate increase to marketing expenses. manage and backdrop, reflects net compensation, and Against XX would In percent projected to SG&A wage to of in higher inflation. continue will spend that to

and with approximately As XXXX points or points operating XXX result, and modeling, estimate of To approximately have interest tax basis our assumptions above depreciation margin X% XXX above a amortization, level also and at provided we the range XXXX. approximately rates. adjusted guidance the of midpoint basis on additional assist an we

recognition be in unearned remind the everyone to QX We that expect can generally revenue comparisons. quarter-to-quarter immaterial. timing would our change year-over-year revenue we affect Lastly, in would unearned

summarize, investors in fiscal our can on of have I cash momentum to underlying of like we section presentation, revenue earnings understand unearned we Appendix half the the communicate reiterate XXXX. are the will momentum accounting always, explanatory slide To with of we and today's how to always XX-day business. pleased would included in continued the even first that clearly the timing so As an impact

model navigate positioned exceeded well this Our are business. back the underscored our initiatives. expectations environment of I remain our continue that effectively and we to point, to call the At resilience We QX and confident performance turn and our Reade. strengthen strength evolving and to this our will business

Reade Fahs

Thank you, Patrick.

of Turning moment XX our to and mission. Slide

continuing every scale. to and global are a at our both day close out live We home mission to

We meeting viable identifying step On that. moving do are forward initial improvement. front, our for assessing our our important to responsibility in corporate better annual governance environmental proposals our an commitment practices, our June internally with aligning is environmental best by at impact an management first and goals greenhouse in approved gas inventory just the

can other the responsibility the our efforts You National access of Responsibility corporate about on page along Corporate website. with inventory, the information Vision

do problems. site Assembly committing sustainable vision to include a to billion people National living everyone to goals, There support by Vision making our fully unsolicited end part. with in are and Care with have to Board gender claim. National Index independent included X% are came well. XXXX bestowed in us employers to and as We a on Russell pleased our are in external XXXX. resolution the QX. United July, list the and care things top of we XX/XX Vision world to everyone unique honors Forbes accessible in the way eye several global balance of UN's America's accolades has was international are General our to Board Nations the best Vision thus development that can the our ability members community for women Women crisis, X.X vision only Big achievement because companies preventable XXXX the In happening this globally among passed we for committed

XXXX of of in from via surpassing to XXX,XXX to They which just and began milestone program, the eyeglass has made hit are people restoring few the with globally in our operate outperform are Eyeglass takeaway locally, very In team. around have our donations we the demonstrated World years the today's key ago conditions. a call vision. given and need ability partnership world we proud pandemic this: is summary, amid Finally,

portion retail bigger back call. We have recovering optical the that, call the are of we and believe beyond to growing that start share hasting the the question-and-answer benefiting like National operator continue the and I pandemic. would favor market in With a market trends we turn to the Vision, are the of to to opportunity from

Operator

first Our Instructions] from [Operator question Lasser UBS. Michael with is

Michael Lasser

to did sound fourth third have are on encouraging you comps It fairly and trends quarter-to-date. quarter You seeing flattish for yet. been the guiding the that

So how factors? guidance do that very in to momentum with the you you are see or factoring some you the conservative of be the other reconcile what going seems a slowdown because to of virus in rise business. the Are

Patrick Moore

morning. good Hey pleased of the were Patrick. with out exit It our rate coming We quarter. is

have we and some at We some incremental back-to-school. taking this back made point, we where a and prudent just were comments seeing Certainly, are of in posture, conservative like about degree February May, Michael.

in. it is say third the year. And is I over what and flattish some respectively. assumes coming comps we to would just part environment guide in XX% comps in like just The I fourth quarter, growing live last off and we XX% mind that the think of are that keep

exit rate. were we with pleased So the

still to some trends. to the going essentially normal probably overall a we based gets decline thinking a on looking attachment. really have blue see that little a higher But That two-year as ticket We got of comps. to is are light also mild But environment. the expecting to be normal are also are back has continue degree We to and it continuing nice conservative prudent on we stack. flattish be

play benefit will as well. be may lasting out there So ticket that some on

Michael Lasser

gross margin. Okay. is question My follow-up your on

your pandemic? now about is moving XX%. where What's that the four being to consecutive continue going changing it going margin to to structurally back Why to above gross was that your business it You quarters forward? for had wouldn't put prior

Patrick Moore

mix. was to Well, if was there to we ticket, benefit think about it, eyeglass there benefit

the towards at not those is been levels, It last are quarters, agree. back margins. Across four moderate slowly boats seeing normal there back yet. all We exceptional I fully

could optometrist costs. or see a to seen growth maybe wage that normalized remain that lower levels. return We little with have either in think inflation, We there we closer

We to expect margin mix normalize.

being in So we across to are I it see the would area have as and moderation put and category ticket some expecting of an baked cautious. in same that mix, of we

Michael Lasser

Thank much. you so

Operator

Thank you.

Our with next Lejuez Group. from Paul question Citi comes

Paul Lejuez

going you Hey, metrics about can differences then thank two versus growth you between think think Can about question. you any just And to back concepts chain, the ticket as no issues. those size, a transactions guys. just you talk second your you supply mentioned The XXXX? I as - versus

any and side you called think to inflation might navigate on expecting so, seeing you cost the if I that? Are how out. you product be

Reade Fahs

Good. Yes.

is an had in throughout our increase been coming it we transactions of brands. QX, from and sort So both positive growth

encouraging. it And talk yes, coming want So and That do ways, about you that is been expect continue. we the is in really to And to both inflation?

Patrick Moore

Yes.

long-term three Paul, inflation, of our years typically we Those have place contracts sales. the On areas nature. contracts of are in cost major in to got across all four

inflation We key as any long-term forms guidance. about of in talking guiding are it towards really nice vendor gross margin to is in But haven't the have XXXX. not relationships from partners started long-term again, those contracts. to benefit relates and or it I expecting

Reade Fahs

our others are under said and are are out and control disruptions you there think it, many not our supply to we seeing major inventories like there I we happened. chain are good And but that

Patrick Moore

stores. things And I sense. the make be some cash gross in margin or just shocks core from the about chain the engine benefit we of through wouldn't sure growth business's at building that frankly the to will and launching Paul, with made growth prepurchased which it flow business, we our add supply new either where is level talking flows

to those have of be in well out curves. we front tried So

Reade Fahs

team handle that handling volumes we the to are and just to we labs there. great kudos the merchandise And planning our have feel our we elevated And need for projected Right. the also capacity needs.

Paul Lejuez

guys. it. Good Thank you. luck Got

Reade Fahs

Thanks.

Operator

Simeon from Morgan Gutman comes question next with Our Stanley.

Michael Kessler

the comp tax progressed from to there wondering from what I Michael's on necessarily first, on I And up finer question you and of way you the back kind you the think the lot And I And and guess, you a on could you it to just I into into raised any your half. out bigger guess, of your next on you just on is the viewing the Michael that kind child the based point of Kessler built back-to-school, already sales Do that if able even have under-comping are how that it the be Is on picture trends, And the credits? trends put here baseline through of how care is are year, know for leading year. as seeing over-comping? takes outlook the view do is the this in puts kind is and or compound guidance? way? feel year? to of then Anything a wouldn't there that that any to being reason wanted on comp. kind expectations follow maybe This Simeon.

Patrick Moore

that Why you would I in. enlightening, there there, to feel start don't be things Reade, think jump if are free

terms the looks flat XXXX half, and comps is in as outlook. talked of of somewhere It but a not commented kind be was. early. we have earlier those We the about back-to-school second XXXX, as ramp, flattish. XXXX We In of between seen beginnings nearly that

at and it how state think felt southern here the that is are waves say, back-to-school. of really And point I remaining back-to-school. got we weeks kind have about of before we of We we can in

we see in stimulus from of are is the credit, that, and and any benefited way generally to all we really early lower past. tax open point. say as income very a that the comment have benefit have Usually, In from still well. we Americans, child can't That helps there either this that at terms

of In periods kind we terms wacky We saw lines way, the positive off serving on in people it phones, were year of where of execution. our so brand-new of strong extraordinary stores, month lines people progression, coming of in and is they a the we reopened of to closed still frankly, when just it customers were been outside, websites, pleased that. was when growth comp last for of doing the a period year lines we of was June. people for and an [indiscernible] mode of June sales transaction on of time a

see quarter, about And did we again, positive across positive feel So good exit out rate the coming of surplus transactions real June. of it.

Michael Kessler

there follow-up -- I the on half the you and more bit a expectation just is over more I Maybe I a on a has past on expected say talked seeing little pressures the what about how the inflationary -- Has that also that you the about quarter. in quick evolved maybe or front. side Great. a would that second the side. on the quarter optometry point but associate into been of year going it continued guess And pressure be are you would maybe guess ago? helpful. labor the

Patrick Moore

don't of year. any surprises inside the have been think there I

we have bigger We a have degree inflation for if of seen our to we seen -- doctors. some wage picture, modest go

moderation. year, is it for It We are not and happy us understand that in lot do they we -- a that we ubiquitous That happy in a is But see also last every that every for supply-demand them for supply rates market. they are a across we equation optometrists, patients. do moderated has competitive been pay here demand but not because market. to to challenges have the of work bit and

to So inflation I degree of some see continued there. expect wage would

what minimum doing we state what market really doing our it to with terms In is our relative of wages changes. of a function it is are associates,

that We wage we to are have immune inflation. guided not

We expect to see some of that. It is our absolutely included guide. in

more the of So really same.

inflation, why associates, our Well, guide. in in the which associate more Reade, of little is But a expecting are We terms again, don't...

Reade Fahs

And keep our thinking are when the mind thing to of They about other And Yes. associates I we the -- it an center team they of you optical are distribution National is the their -- just component aren't the I when -- the Our think should is Amazon -- as we what store Vision They our people. about to at saying, thinking regards optical make in wonder think themselves down primarily. part I ourselves have optical career, managing professionals. That always labor. important street." to say firms and of about "gosh, got as relative

Michael Kessler

guys. you Thank Okay.

Operator

Our next Wells question is from Fadem Zach Fargo. with

Zachary Fadem

Hey contribution talk with about existing customers? versus of you good change any morning new to guys. bit seen the Have more respect a you Can specifically, new customer And gains. the customers be Any demographics? these ticket cash your pay, would or you when in color helpful. legacy particularly about customers, Vision the think mix there average Care of relative to versus size

Reade Fahs

customers and gains customers versus Zach. course, think existing Good. XXXX. customers in both brands, QX, was in in versus at a both new higher of the our America's are at experienced with America's Yes. Thank last frankly, customers you, at new growth getting share our growth growth an new We in trend. Eyeglass improvement little customers new weaker and World, a versus but Best of both we and best in We year,

So is frankly, investment in we driving marketing think, growth in our new customers.

Zachary Fadem

for And color sure QX you. Got margin heard make want Patrick, the I I just correctly. to

roughly XXX expecting said then and you SG&A points. basis are of gross margins think XXX points basis I down you deleverage

XXXX. long-term should dynamics a but sustainability to environment as curious the look I double-digit this sure would of right. talk could EBIT about then first all, to you So like that margin is big double-digit we margins consecutive And represent how recognize I second, we a changing fifth driver is want if of performance. quarter make of that here, to and And think

Patrick Moore

to expecting that to XXX side, basis decrease we the gross on as point kind bit minus seasonality, didn't ranges. or clarify inflation, We of said margin mix, earlier, of little being toggles about normal plus on QX, bit are a is moderation back in a in of be but leveraging so And guide SG&A, are expense, going we Yes. ticket. corporate there specifically advertising little product based a on probably the QX on wage range. the

moderation the looking to in XXX So guide growth, so with probably positive last and I end to industry year expansion. reiterate, have circumstances didn't less see pleased we in margin some some on baked year in of have could that that. I margin and on We expect be But flow-through is productivity in of have I the exceptional less nearer-term been out. the of leverage. we what rather talked We there I so is specifically we times. that at terms been helpful have upper have growth, gains comp about which revenue in think comps into think And ahead year the do side, It that and get our still capacity, labs range. the guide. terms there is seen

advertising the We continue. leveraging longer corporate some And last expect to expect continue some overheads then to nice of year, over we term, leverage. that have seen

large which that expecting that things a play to to are out. doing have to are around change curious how implications to far, the managed not we think to to our really not this wage best through thus see well, huge states we there, will it I degree. inflation, had But continue signal work we have that kind be of

is bottom permanent. think - XXX% I of maybe that line, So made have gains, not we great

the on invest. but is today. in to moderation, business growing strong see the The continuing strong and We want will years be in team time, management same and way, smart margins doing a five-years. little here focused is we a it keenly at so to it And three

make will of right continue to And inside so that, investments. we even the

Zachary Fadem

it. I time. appreciate the Got

Operator

you. Thank

Our Yih next Barclays. with comes Adrienne question from

Adrienne Yih-Tennan

a pandemic. home I of as are on down opportunity maybe new And scheduling. a tell those solid think. is the Congratulations the in and through this about not Reade, to how have had of you better exam Patrick utilization made Maybe the the the it better telehealth said, I couple-fold. optometrist costs Can the question COVID? optometrists is for longer-term were a a guess or many quarter. independents result sort looking then

And it or that more ups about and quickly cost comp go breakeven from a long-term trend? this of as tough something then transitory given away the of answer, know think I the Patrick, for fixed kind into should where of is volatility, on is but we So to downs? we all move period

Reade Fahs

sure I various have make Great. there. the Adrienne, covered try pieces I'm to to going

that last me reopen closed to and to industry suggest closed Let of reopen X% that, sort of data but and some as year, malls a, X% well stores they of not the plan to other suggests their start reopen, with that are data that sometime, I think, independent to stores hundreds industry doors in doctors not chains thing.

doors talking the is by trend while. about are there is benefiting we So us hasting longer-term hastened think less trend has -- the been trends that out been that there. that and one benefiting that a been a for keep have of of is us, I that that And Again, another COVID. part was of

amidst area, describe that with and any been We that opportunities remote which that with number have are do chair that programs helpful that with a a expanding have data been of and We remotely in a our pilot in thing. their equipment over we more room locations getting and and believe going hard-to-fill telemedicine. we to the the that be our doctor that, have us flexible all sitting there we scheduling of time in have of in believe progress our patient all that overall and on think capacity medicine, we and terms stores -- productive, encouraged sort the as should be In doing helping making Sundays to exam. and we exam able maybe

that and a Patrick few then pieces, -- cover is those go ahead. is to two more, So going

Patrick Moore

the I double-digit where last that good give times, good say, more to would in it line than you comp in think are that of of growth. XXXX. for new to over year, over rather I for works we Yes. second from year, a now pull year, certainly over linear guide versus still not That it margins growing off growing tough exceptional was had is periods linear we o this good figure I say us. I'm and is other to point periods reflects growth important range X-ish top linear for do growth growth. probably bottom updated year, leverage the to growth line half. going mention think probably prior

And sit really the that more to half, as back positive see on expect months So a I we period. were slightly over incrementally, we continue do good to few growth here today ago. where versus

based our thus slightly guide have seen performance the on year. we this far second So the of consistency the and the improved on business half

Adrienne Yih-Tennan

much. done. Well very you Thank

Reade Fahs

you. Thank

Operator

with Our from comes Capital Chukumba Anthony Loop next Markets. question

Anthony Chukumba

my a quarter strong really on Goo Congrats taking for morning. question. as well. Thanks

five Just Walmart two then terms second, on any converted? that with in quick just update those vision one, of centers questions: any update Number And that optometrist and you relationship turnover trends?

Reade Fahs

Yes. Anthony. Thank you,

relationship Walmart. Walmart, So great we have with

are last gave that a some that stores. think and the XXst first they -- I by they stores, the year. probably new stores encouraged we, those on are contract And us can And we in even we have very have decade. results. we opportunities for see stores granted is We years. for year, think Those the still Reminder, better those us several more extended our results

honor And inside XXX operate real with we are so it stores great pleased and just that a is to Walmart, relationship.

Anthony Chukumba

Got trends turnover it. or And automates trends? then just

Reade Fahs

still record you and can't in are on don't doctor we near retention coverage if QX Yes, doctors, you delivered strong results highs like deliver we have of throughout.

is there that And still record a are we on yes, there. highs So but good near correlation retention. yes,

Operator

America Bank Robbie from with Securities. And Ohmes comes our of next question

Robert Ohmes

follow-up a just Good Reade. morning. question, had I

accelerating side, a on price six-months? of X% going over the some anything Just that are might competition is be guys you on customers you school? -- there back you Can to to -- kind is competition on? as the on capacity doing that these Is color little move starting so there the you X% capacity Can that what last give from the specifically left, you and of coming competitors gotten give up are have doing more any an industry And maybe on into marketing you new color targeting keeping doing. on

Reade Fahs

Yes.

and lot category, navigate time. front. is lot like of have customers, new admirable are competitors marketing the always of optimizing And seeing of from hastening getting sort of able keep competitive better CRM XX-years, Again, changes over a we is at great on And to consistently So less said there new not and have times, the are a yes, quantifiable. of to overall. it a competitive the with is long-term past the strong there to new there. price we efforts CRM there, are that on but and not nice very front any variety would we of new competition we seem we trends they It relationships programs been it are big aside to thing programs, the we out have our about we and doors, that terms through not in be a customers, build is

approaches testing their a results really keep they show customer always leave way ever with to great what get best out the happy received figure experience, and them at new better think service. that based that have that. can You to great the works them we are on and are the make I is value and But in knowing doing store again, that we money QX that. And new

Robert Ohmes

Got you. follow-up. And then just X quick

other industry are impacted being not and industries? relative are just Are by chain are you impacted within disruptions. there saying do supply pretty industry or you not mean being you guys guys to your your You by or and disruptions that people to relative

Reade Fahs

call I think and we about things that. much are saying industries really us relative don't to competitors talk other like and

feeling for lot a are be is and area, there to by. was that -- what know or not may competitors affected may based don't we I us aren't in it but be our on issue the that So trends comment macro seem being not of an

Robert Ohmes

That is helpful. really Congrats.

Operator

with Our Guggenheim. next question comes from Drbul Bob

Robert Drbul

for Just quick questions me. two

I is understand terms outside lot unit Do growth you And strong think stores? business pandemic has little we normalization where your seeing I line. you of throughout about I'm and as you pressures. - in to finding of a the how you success have I how I bit have the one continue are the wondering much you that little you been some talked staffing think are on the understand any the I first think X ones I a you and of you where through think And of further, trends ODs of look think the just are a business, had the the trying given the marketing how how Or find expense bit a to trying like could side. little is, you the right labor more maybe right have just to just question second is. as back level if the challenges a today, marketing you guess pull wages just given in had? flexibility on

Reade Fahs

Yes.

level, On coming sort back weigh of that in. droves year, in marketing last year, because folks the just it second we is were closed of of of on the half marketing the the

So we did pull back.

expose in just we have customers advantage And take also We continue thing new to opportunity of marketing disruptive marketing is spend. gain are be normalizing things our a can share world you to would to and are and is the future. this been there great frankly, digital value. of too. about and we and environment, this market learning trying investing our and services to the testing And doing about I for lot the say a is And our that,

some learning are that time in We are we ever you to that optimizing it make sure got successes have too. great to have we sure a such doing is get when make had,

of terms So that is staffing there what is in happening challenges.

much managers macro optical I again, not - very growth success, and And of fact of need. career we the the the as stores immune optical about more you more development lot nice I given build we the for of a need, secure your that to a reading who can are great retail here." build, more and career and considered say, a trends, had, regional I and thing you vice relates here. lots the challenges about optical place our service are careers optics themselves have it The the have who impact the that provides to are make we sort opportunity people an but all career. presidents to are I see to And that have mean, their environment that think professionals of relative district "wow, define us professionals in to We about of think you the on really industry. to hearing is mild we what staffing in in

promoting here are the getting So and growing strong. and quite ads career a promoted

Operator

with question Jefferies. comes Stephanie last the Wissink Our from

Stephanie Wissink

to wanted tactical quick I up two follow questions. really with just

give historic in that you your the of similar the with half back levels. Reade, your is fourth I'm us spend can think, And levels you a consistent question marketing on Patrick, referencing? then historic be are if marketing I mentioned sense you a wondering to just what or quarter. going

versus just XXrd I wanted I verify to flat and guiding into comp. XX-week doesn't you take the week. to that XX-week account think are

Patrick Moore

take one that Stephanie. will I first,

XXrd So exactly yes, it is are about right. a good comp. yes, as to it you true to relates comp, week net It the that think is revenue. But on

category. half every to kind I advertising-driven spending, two probably would say they how spending? In of right. on it where best XXXX an were revenue back And side. comment We terms are marketing X.five-years. competitors or an We my purchases. year those that the are are or very that just is monitor across These specifically They closely doing, have of XXXX, normalizing, basis. what on a -- incredible titrate we second on of every seeing of degree try our It to levels not the of now capabilities we in are three-month search to data they percentage analytics get our

over leverage So a that of to part a machine. where the it term. spend remains look We longer do marketing category is

Stephanie Wissink

great. then Okay. on is to really that double That And click just quickly.

Maybe transaction frequency finding marketing think new of Or continue about the you customers? it you If talk your your year. connecting outperformance little seems Are to activation. just a incremental like about every the it marketing that marketing your effectiveness, to rise bit transactions is is activating visit?

Reade Fahs

customer-driven new frequency more much of than is visit. It

customer budget is conscious. base Our very

is purchase. going, the Again, So say, not, latest would it a to I necessity is is vision it able need is to be fashion." a I get me "oh, let my It see. purchase. medical

be. see still And of of ready moment is trigger. there, occurs. mind lot what There be not is to so brand is think that there top and we we want lot And still of to and different opportunities a the We when There plan just awareness a them. and it is should that opportunity. our

Stephanie Wissink

you. helpful. Very Thank

Operator

to for would love call the I remarks. turn Thank to his Fahs you. final And Reade back

Reade Fahs

happen. execution, there. I They would and customer And much. great team. require thank all don't the patient congratulate And care great you care, NVI entire Results just great like so again very just around Carmen, kudos like to this speaking would third just this thank all us again morning forward and for support with you we few Vision, results you to and in to interest we to for months. National our like continued joining a of quarter in and look once your

you thank all much. So you. very Thank

Operator

may Thank you this Thank conference your call. and And now you. you participation, for concludes today's disconnect.

National Vision (EYE) 12 Aug 212021 Q2 Earnings call transcript