Earnings call transcript Q2 2023

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Operator

Good day, and thank you for standing by. Welcome to the Q2 2023 National Vision Holdings Earnings Conference Call. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Angie McCabe, Investor Relations. Please go ahead.

Angie McCabe

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

be of the today on Fahs, Moore, is and me the are CFO. COO, the will portion us with Joining call. call also Patrick Rasmussen, Reade available Q&A during Melissa CEO; and

issued the and will replay A after Our Investors both audio accompanying webcast are archived the of our in section nationalvision.com. earnings release in our the website, presentation call be the available call. Investors this morning section of the

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

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

section a our website. investor Vision for presentation Investors provides in reminder, the of National investor As and supplemental reference materials

I over will Reade. now turn call the to

Reade Fahs

for you everyone. morning, all Thank today. Thank Good us you, Angie. joining

Walmart with on detail. XXXX our financial Then, in exam we're transition. results quarter key we're morning, on highlights the second be and you ending Melissa some provide strategic on in expanding the announced color with will our with XXXX. that preliminary update As This review will the partnership saw you second second particular on quarter XX, making likely our conjunction quarter, I'll financial from results emphasis initiatives July our on some capacity we and Walmart outlook the how provide in progress news more

we our of X the weeks our second in adjusted net to ago, and line results XXXX, second with and X.X% quarter store with expectations growth trends quarter. comparable of experienced of sales communicated growth X%. quarter similar XXXX delivered in we Compared first we revenue As delivered reflected the were largely what

see income further We continue customers more to as our of care strength number offerings. managed in into higher traded as in business who value-priced well the shift a our

the second this XX remain During XX we to to on stores quarter, open and new stores XX approximately opened new track year.

initiatives. from we of continue EPS execution the As I'll of the my in resulted results our quarter. second that for $X.XX tangible to will key among in discuss others, diluted remarks, see adjusted later Melissa strategic These discuss factors,

operating and guidance our midpoint Importantly, adjusted XXXX we above believe income the fiscal will diluted or of the at be adjusted EPS ranges.

in detailed Walmart no our it locations, the will relationship,, we optometric Regarding of XXXX, we press XXX XX our related our e-commerce and the ends in longer June we Club provide the XX, on Sam's Walmart distribution to that to AC and California. services our for made XXXX. business managing Walmart be centers in July release, lens contact end Walmart vision XX, providing wholesale Consequently, will we contract our nor Lens select as as services when decision we February be to

we the transition created We've to executing revenue a about over brands, X% World, Eyeglass a on over operate more growing strategic coming expect it of our America's XXXX. we and Walmart, in Best driving of well the from vision revenue stores X successful down for fiscal larger, not dedicated months, and the on been a Walmart. our from will While we've decade, to did be team net decision centers focused transition Walmart this focusing

model business we align ensuring our this go-forward addition, provide details when are appropriate. more on In to focused cost with and we expect our on structure

complex greater growth while the X As able adjusted the ahead, operating more organization, we solidifying margin a return to will will our have to milestone position grow brands streamlined on and mid-single-digit be our less core in focus large and strategic a we as even look initiatives that leadership marketplace.

to on continue environment. and underscores strategic in our initiatives, our in We which make ability thrive this our business new our to adapt progress evolving confidence to

on Our primary capacity. strategic focus exam expanding has been

consolidated goals comp. as positive QX, stores QX, above our capacity In growth achieved our sales produced the that in comparable reported

In less and stores in is than enablement. We and are base. dark this are coverage on even our their at or quarter half One second front. Best, now remote the optometrist are while stores coverage we have in making progress at there dark were that no in-store laser-focused on example level of America's store where exam improving is highest increased XXXX,

fluctuate focused remote and throughout coverage attacking which but We coverage, attack the our it efforts been below some generally improving We've are of through coverage retention also on can well stores our year. continue dim dim recruiting desired deployment in technology. with stores, stores levels. The of are and to number and our

retention where track levels. of on the work exam towards to flexible offer remain also network, and optometrists we network recruitment optometrists and our new a existing remote we that deliver through drive We're believe year at capabilities. improved COVID-XX retention to to we We of and medicine deployment returning increased were pleased of to prior the increase new scheduling of continued capacity to retention levels one retention drivers recruitment now existing We to options that improved of is above our in as our or they pandemic. rates second key the optometrists that of in consecutive

year. driver joining efforts to graduating us. the to shaping in Additionally, We believe options pleased scheduling key new increase are offered up recruitment flexible be student graduates were year's the another optometrists a this we're record of

year. is interest joining earlier graduates the with Now network experienced in more care over how new flexibility, our more resulting incentives this launched decide optometrists new changes ever, and levels Scheduling health schedules, since in experienced other including of they optometrist than and want practice. and control approach their professionals we and strong to when to combined recruitment by benefits

continued of our deployed capacity rollout targeted and this locations track And America's exam Best more our enabled the in medicine through year. in on remote locations. technology. Year-to-date, is record with expanding Best X, locations, our health XXX rollout than now Notably, with America's remote our Another remote mainly are driver target remain XX% of nearly platform. our we half both of our July XXX electronic of

capacity, these with resulting X We're for otherwise. in in the not EBITDA added had profitable to improve have is health the combination as efficiencies in-store in record drive experience. we deploying track remote capacity The initiatives remote sales exam of that importantly, we XXXX. remain X on tandem to together technology expanded be improve and in electronic And work would patient

efforts. optometrists and Many practicing enjoy a both support via retention setting, recruitment remote which helps

the in our even remain to expand we confident remote over allowing ability capacity While remote exam innings still of more optometrists continue program, to in its to patients. serve early time, thereby

we ahead, on in future complex focused evolving are look carefully and the navigating deployment state we As phases. regulatory landscape

a conclude I Melissa, and recent on. there are to highlights couple want turn other Before of the touch over that call to I

This pricing still May, early the in of we And already of internal adjustments. non-headline analysis our the as was do our recently our while architecture pricing on quarter findings, and some recently to study completed. call mentioned earnings a in we undertook regular complement we in First, modest evaluation first we're basis. study a implementing

receive and currently midst health customers quarter first Second, benefit back-to-school are largest which reset when second season, in we season plans our selling tax the of is after the refunds.

and During back-to-school getting exams are in a can adult to increase see customers. season, school, glasses and for children seasonal we returning eye in currently preparation

everything As across our the teams robust we over pandemic, where serve country COVID-XX our patients back-to-school listen our they need best and we're them to meetings providing associates been past historical the several to with to our has weeks, in-person customers. we to practice prior ensure customer-facing conducted the store with

We are on improve reinforcing to operations our our thereby field performance. and improve management focus

encouraged business strategic of look we're the with progress across by making we remain we As execution the our initiatives. ahead,

people our eye remain and to by is and more evolving, eyewear we making our focused accessible. on While quality care help model mission affordable

I'll remainder outlook second and of now turn over discussion call results our detailed the Melissa? financial our Melissa the XXXX. for more a of for to quarter

Melissa Rasmussen

and Reade, everyone. morning, you, good Thank

know, along you outlook as that largely line on were news reaffirmed with in ending the our in earnings XXXX, be fiscal first weeks will our May. with call results we and Walmart that expectations partnership XXXX As X second quarter we in ago, communicated with our quarter preliminary announced previously our

We with Best net World revenue quarter, X.X% in second quarter. basis and The and the with revenue the XX new Best stores. compared negatively and in Eyeglass of the opened period base impacted unearned prior and second the XX revenue the timing stores increased increased by For growth last basis America's X combined points. X Eyeglass on brands store growth X,XXX America's in a X.X% quarter. over ended we our World Unit the quarter total year, store closed year's

to on by Adjusted average mentioned, sales guidance. in by Reade comparable our X% our are store consistent stores continued and As open of ticket to the increase track quarter managed customer transactions we and driven care an with previous in between supported XX XXXX, second still in XXXX, in grew an XX strength compared business. increase

basis of prior net percentage with a XXX compared revenue increased quarter. cost points to applicable the As revenue, year

optometrist-related continue to we we costs. expected, As of see deleverage

care by deleverage strength in XX in from exam pricing revenue mitigated line However, this an approximately was optometrist-related managed and points partially exam actions. The and was our and in of with impact by expectations. revenue costs driven the increase net increase basis

in experienced revenue. warranty we a In service other revenue, addition, basis of point decreased reduction due headwind components to XX including plan

increase XX product as the was additional an lens partially management. actions with with which expense Lastly, freight pricing well in by as increase offset associated remaining was favorability point costs, contact basis

for margin year, approximately costs balance points product initially expected a higher headwind investments the doctors. XXX and reminder, between of we a gross basis As in

it product split service include as as Given across we a this taking both costs. believe breakdown cost which is overall to costs, investment best overall and we are the service mitigating as now product at between costs doctors. well look in actions

year, remainder expectations basis this our year-to-date the gross to full point for Given skewed of be service year headwind versus cost. and expect margin results XXX product the now cost we for to the

performance-based primarily and incentive a and with of by other compared basis second points Adjusted offset XXXX. by expenses. of percentage higher partially XXX SG&A we increased as revenue was higher the compensation expense expected The as occupancy, payroll increase driven quarter

slightly the single-digit expect range we the the quarter, quarter. grow As a SG&A expected now expenses adjusted high a to of we third incur to to second certain but in the reminder, in that due saw lower increase in timing

and technology the that our investments are in software store Depreciation primarily amortized due to investments $XX.X and SG&A, in remote cloud-based ongoing decreased prior medicine offset shift year period, from to in new X.X% by expense million amortization partially openings. a

income was negative factors well operating in $XX.X operating as compared Adjusted to by the $X.X as prior million basis unearned decreased in year impact to X.X%, the Adjusted driven points period. margin revenue the period. million the $XX.X million on margin XXX the from primarily discussed

instruments mark-to-market term to derivative interest of to million, derivative costs Net and higher was deferred and $X.X offset net $X.X which discount expense loan income, balances on year-over-year changes due cash gains and in expense. financing related by expense decline of primarily million. income losses on interest includes higher and debt interest partially The was amortization

quarter rate Our X.X%. was second the effective tax in

$X.XX Adjusted As we to with XX%. year share half tax guidance year be diluted our the share we full EPS period. rate second our of prior $X.XX to XX% line more continue of in in was XXXX, compared to to per move into per the expect

the and that our the X store increased approximately revenue sales margin to period, months to Adjusted XXX points basis growth prior year nearly by comparable date, the X%, with stores factors compared adjusted prior quarter. primarily period, X%. impacted by second driven results driven new compared net the to the Turning for year operating declined financial of as aforementioned

Our strong. and remained balance sheet liquidity

ended revolving million facility through the an total of second a $XXX.X through capacity credit loan for We June available During quarter our credit to liquidity the from of million, XXXX. years $XXX and extending refinanced in balance of successfully X XX, additional quarter cash revolving facility, access the we facility. term XXXX, $XXX.X our with revolving million and including credit our liquidity

outstanding net period ended debt X.Xx. to and we total Year-to-date, our trailing cash the X, with flow generated of we months July of operating $XXX.X through million. July XXXX, of million for XX $XXX.X debt adjusted the X, was EBITDA As

in initiatives. fiscal the and for XXXX, growth million on driven million In addition, for be We track to the by primarily key of first to months in remain $XX.X X in support range our XXXX expenditures, million capital expenditures our invested distribution stores, and remote investments $XXX new our we to of center, technology. medicine in capital lab $XXX

Moving now our with XX, on amortization are ranges what expense, and fiscal for outlook. with exception Consistent for our a communicated we our XXXX we guidance discussion previous depreciation XXXX. to of July outlook of the reaffirming

guidance revenue execution well as continues scenarios Our capacity exam strategic sentiment. range ongoing our initiatives of of expanding pertaining to to incorporate consumer as on focused a

expected We the half the by believe exit. and supported in new we anticipated range $XXX this range of first half of to lower intangible now million the in million to execution expenditures the Walmart ongoing the our be the our the deliver and impact of depreciation improvement of $XX impairment and to in We on of sales amortization and well year, within the given joining back related the doctors depreciation asset expect are timing capital the strategic well-positioned provided to timing trend initiatives. of

and addition, or $XX $X.XX to $XX share, the of our million EPS above operating at and to diluted be In share midpoint we guidance adjusted million income $X.XX of adjusted per respectively. ranges per expect to

assumes Our weighted adjusted average guidance approximately diluted for million diluted XX outstanding. shares EPS

the expect we in Walmart, declined over efforts fiscal Walmart, revenue what relationship EBITDA the we Best XXXX, and ending lower to weeks when due XXXX our with announced Walmart in be time, contribution Reade we communicated from our with fiscal with relationship large Consistent Walmart's to EBITDA for XXXX. and ago, than X overall of fiscal part World. Eyeglass Finally, to discussed, as our America's with respect has to grow our to contribution

We to $XX third asset charges of noncash and $XX and intangible record also million million, quarter XXXX. respectively, of impairment in expect goodwill the approximately fiscal

our with financial through growth with operating remain committed believe relationship, and We making structure associated termination able at are mitigate the of our go-forward exiting elimination to cost the Given it our our of we costs Walmart these brands, align direct indirect America's in combined a with World the taking and to necessary and changes the be from look Best the close model. these agreements. will Eyeglass businesses, to we impact

We plans date. at expect these a to share on appropriate as later more

to growth look further returning our strategic adjusted on initiatives we on and execution, ahead, mid-single-digit remains our operating sales progress mid-single-digit comparable focus operational delivering and margin. adjusted As store

call remarks for your you for now call questions. we open time to turn I your Thank today. Reade before will Reade? closing the over the to

Reade Fahs

closing, In let me summarize.

in to are and achieved where encouraging, our we've expected are remote largely have goals, EBITDA our trends delivered growth. more growth year was line exam exam Retention recruitment be trends encouraging performance quarter our store and part of expectations, positive second sales capacity to excess Our with capacity. comparable this is ever our important poised profitable be we in of overall consolidated an

an And their and focus X We increased strategic be brands, above ranges. we Eyeglass look reiterating adjusted our growth with a to XXXX far guidance are to midpoint and Best operating our company simpler, with World. EPS year income diluted outlook forward at full adjusted or faster-growing America's of full the being year respective on

your for you today. Thank time

now open the questions. call We your will for

Operator

[Operator Instructions].

question comes from Goldman Sachs. first with Our McShane Kate

Katharine McShane

difference the sales just any there. could I Best the you Eyeglass America's if more wondered behind between provide World same-store detail and and performance trend

Reade Fahs

you, Thank I'm do Yes. happy to that. Kate.

of So managing I've dim was little story bit to same a America's and Eyeglass comp. store. you, doctor Best got tell World of X.X% the a negative comp was it's coverage a and X.X%

so efforts have And believe far rolling it's we there, that Here, America's out of but stores. with World much where AB some been we've which That's improve front, to can we've remote, that a our help Eyeglass time. our been that really our stores, on the capacity going. focusing story those over so do and Best will has that on we point, we at continue really constraints turn but to been

Melissa Rasmussen

we the were that through about with their I XXXX second prepared mid-single dark worst just at working really wanted digits, in but we're quarter. focused remote something commentary currently. and half dark as go, to as at less of is Kate, on And are enablement amount add, stores the that far quarter And talk did our than we our this stores this dark at stores

we'll sorry, through America's as percent remote. efforts the recruiting to And attack fleet. quoted of our and so those I'm were that And continue our that numbers retention Best as I well

to is like recruiting brand we that working through and have to Now that increases something, are move we'll World Best. our Eyeglass with attack I America's said, remote once we the established

Reade Fahs

improving our in desired capacity, real able in comps our have the think Best. in I as the we line we finally, America's the deliver with been we historical to said we is capacity as We're operating improve. of have remarks, And the Kate, here seeing level comps where the are And story model.

sure advantage just have to So to the who the back getting it's take exams for want them. patients of we making available

Operator

[Operator Instructions].

question comes with Michael from UBS. Our next Lasser

Michael Lasser

our divestiture you question. Angie, Thank last so much Walmart many pieces are in of over the along the now the there taking years few given with what's moving for happened business. model Reade, your Melissa, Patrick, so

to be So in to whether can pandemic or it get adjusted the average if to not was help which could the Vision helpful achieved that regularly prior National range. it X.X% extremely unpack X% operating the back income would you margin

And attract investments National just and factors get be that strategies the the allow going if to key in light order to same-store feasible, simply sales Vision and in having optometrists make are growth, point? generating you're to especially consistent that there? is a going at this what to be expenses, to Is function leveraging retain that it of of

Reade Fahs

affecting are we comps execute is the model. driving get where income to in our do line and to and question, in pieces on model, Again, where optical back we that are post-COVID and able in like that been are by the I'd to our milestone, capacity, have about mid-single-digit we remind talking the we how believe few pieces adjusted late our brought moving really that seeing And what be to Michael, back is moving start your love operating are XXXX general. those you certainly next a will I historical in We marketplace. there there hope margin XXXX. with we've and category

part elimination was margins. that of the our the Walmart of business, say pulling I'll our down

digitization there, help to So as take of that omnichannel capacity helping see in is of stores as key with opportunity. digitization office, also to but going the corporate space expansions leveraging that. that get white stores, in we our our And are more a further capabilities, alone our driver we as more us of advantage of well

add our we Michael affecting say I'll at were by that a more last you've time following us since were doctor what full was way understand us feeling the and this consumer of to to the been long, sort happening of changes of and sort the I'd year, that inflation capacity so back-footed both lot rising coming the to extent also. marketplace and our to within environment and coming

in feeling and with far We terms in flexibility of we more front-footed the especially driving place, retention. put improved increased are now programs

be a evolve And will maybe back-to-school And frankly, the the encouraged does It's the -- best best start across of the and like. back-to-school students retention the season we're post year and quarter. at country. record season think and the third with our we of recruitment post-COVID year

we So encouraged where initial it trends in by across there. North and we but started, starts country, then the it the are are then more seeing and has the Southeast goes

Michael Lasser

you're sign more optical purchase years clear or as years eyewear you're on. constraints that that a is lost share purchase as National cycle dealing sign we're now, was for have it's with there a the the return it some new gaining footing. to Vision going that the normalization on Or it a firmer front-footing, of might is last And you retracing the is the had is couple that all Okay. cycle? with? of the contending that's over of of it some of disrupted that last is And My more over mentioned, seeing given been what follow-up question

Reade Fahs

get it's think exams they us. of to capacity sign from I the allowing us want improved a to patients our offer

cycle. have half, the years government the in purchases optical we second that half. that It customers. could could money are It's boom yet start for the not came to much not happen of when since a us gave out big the It in seen been X second normalization others and that. to so about to happen We about purchase for planning in but our start

X So years. about it's been

a there guidance. So is but are not planning we our that, logic for happen, could in that that

are maybe We share We be is capacity the up going flat us market helping more improved up the care is in in to half. segment. believe managed second planning the and our to that

Operator

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

Anthony Chukumba

far to was stores. information I the correct. that just make so my guess question for sure and helpful Thanks this morning. you dark all I dim stores have shared this want on I

offering of So a exams some to that Is any dim but not is think? is eye capacity. offering XXX% store sort a dark not way and store at right the

Reade Fahs

Yes. At doctor, have do and we a not do dark, remote. not we have

a So day, at dim desired has yes, get not maybe there. we store eye couple days, of level. can't our but And a exam maybe an a

Anthony Chukumba

Got it.

I assessment? so pretty a it's safe that significantly your lower dim dark company are say comps to here doing stores than that stores average. are fair Is that And think and

Reade Fahs

of a a fleet ever that the We low the fact half quite especially stores exams the those to that. year. time sales, about since stores. percentage And this is are proud dark in in quite Yes, think in as they also we've those We're again, sure. a drag. more shows dark progress for pretty that And the helping of remote -- last our and remote-enabled cut nice

the offer too. to deliver they what you that's And were yes, and they comps model converse eye What the model, to is, for used what where of and are it encouraging, like we our deliver said, to doing says hey, are historically doing you where that Anthony, the the prior exams we're show But is able able patients COVID. to. up

Anthony Chukumba

of $XX here. don't Q&A about But the mitigate okay, financial talking session Walmart you impact want the -- say, we just And losing Or recapture are one I that you last when EBITDA? it. bogart -- are Is literally to think that? the it? partnership, Got question. the it partially of of like to like the that mitigating getting mitigating impact, of is about the million sort way

Melissa Rasmussen

When hole is the a impact Anthony, talking fill. profit do it's we're to Melissa. of there Walmart, mitigating about that we understand

through going we're mitigate to so that X avenues. And

First being fleet the costs we store count and taking to the be that There's reductions both Walmart EGW continued associated of the through increase our our we'll expand as America's exit. business. indirect out other be costs portion and Best associated cost related with of that will indirect with that that,

to committed go-forward we'll we're that structure new model addition, a Walmart is complex have, operating we model the model our In of the now operating be less rightsizing to relationship. the exiting which that

Operator

next comes Zachary with Fargo. question from Fadem Wells Our

Richard Reid

And for pitching on EssilorLuxottica. contract post volumes risk relationship all? is of contract if the the Zach exit change to with Wanted How Reid -- relationship? your this your the Sam here. the to a at reduction there Walmart does us, a be is This the Walmart touch Walmart impacted headwind change in ongoing in or in could

Reade Fahs

in America. -- strong relationship how length even talked still are that's in chains EssilorLuxottica the last have of lens fixed think contract of we about price one side, on we we we And the and a are very with without have Walmart, and we a I long-term largest place there. optical top the year, couple the contracts through long-term

anticipating back lot contractual, a and partner, is a relationship change way any and long still customer it of a but significant big a and big we that that. in we're so are And goes not

Richard Reid

sound And impacted transactions. more price really helpful. taken Can us thus one follow-up I some walk you doesn't if a actions could. detail? you've far super That's the in through then they've non-headline bit quick It like of

are XH there any additional specific areas you runway in might have So where beyond? and

Melissa Rasmussen

it's Sam, Melissa.

where contemplated we able taken that to have increase been originally our in So have weren't guidance. we price actions

have we follow increases seen we increases, evaluate to that. continued As cost price the

exam to some of year private the some things example, price we've lenses, ancillary been at that are able been two we've and our for Now contact label increase of look and specifically, add-ons. actions. for to Those major additional able the that areas contemplate this

Operator

from Jefferies. question comes next Our Tanquilut with Brian

Brian Tanquilut

prepared up on questions. to you guess that your alluded cost some adjustments just I In contemplating. follow remarks, the Walmart to you're of maybe some

those what that the months. and opportunities to the over next the magnitude XX cost curious and realize timing think of are you you Just can XX

Melissa Rasmussen

Melissa. it's Brian,

With relationship with the with in the June we've put we're Walmart the out, 'XX in the of of February and distribution information Walmart stores that ending contract 'XX.

are and assessing opportunities at time same We our be those cost stream. evaluating we'll exit that revenue to the the exiting structures

So that come on. And we're costs course, our those what related as working supporting relationships. the is closely going to up of to possible. as any That's planning direct costs will marry business out the are, of those

in corporate costs. structure, And back-office you addition, the with have

the distribution that different related indirect in to Walmart overhead and have do You relationships of we types are costs tied would go-forward than today. look last to things the things, discussion relationship model in said they like insurance, the like that. Those

Brian Tanquilut

Got it.

that Anything about the terms in of fact alluded out then virtual prepared to stores. the the And also your that half in with to the think performance ramp you you of Okay. share as or rolled us not to of quite you're rollouts can that Or remarks, you target mature? some for these them, seeing a -- year a I probably now. you're some you're year seeing but of out close

curious So seeing. you're what just

Patrick Moore

Reade We've some for perspective new inline the remote stores even a year. doctor. opened us. even by it's rollout store earlier dim in Sure. doctor a where mentioned remote from We're doing a haven't conversation very changer is new kind game this found of an where we and encouraged been with what dark yet

to playing timing role. that because years remote really X start decision our it's with on pursuing ago, back pretty look I So happy big and a

We've brand. -- XX% about to our right. other rolled to You're this of out AB

to year. it a we're XXX this in ABs more higher ABs now, but be than as continue this can have started I We've equipped it to the to we're We're expect time. of that. plans there start. our think year We're we think end more And recently, majority Now surgically evaluating EGW, be to of testing I of XXXX the vast our benefit to well. in over a going rolling by going where out

So we're on track with remote.

wording it this and to finally, be been around our there's EBITDA then year, would I And profitable be we higher that. say has expect confidence there -- couldn't

Operator

comes question Adrienne Barclays. next with from Our Yih

Michael Vu

Michael Adrien. This is for on Vu

seeing to I a saw average some you in please more know share broad ticket higher So Would I increase mentioned wanted trade-down you you additional off kind of and the color this new transactions. buying with and question. the an that customer effects? higher start you're that additional around consumers to attributable why ticket? openings Is store any you capacity? are also seeing maybe Or

Melissa Rasmussen

Michael, it's Melissa.

So a to higher of customers that own based and the have seeing. there else's on factors to somebody first care money money. tied foremost your couple ticket Managed we're the strength spending just care versus nonmanaged the spending but being than higher care a managed ticket, customers are tend

strength, of stores. they get see in addition we believe from down what's In trade levels of the And customers. value value continued to for come the combined we that, our they that have many continued care higher our with We seen stores ticket. factors both those income than with a $XXX,XXX. more provide the that's where higher benefits to driving to managed And because their

Michael Vu

seeing related in And are to as as headwind? mentioning increase business. whether transactions just not that, $XXX,XXX follow-up a are loans, assumptions at see or kind since And the positive Or the what were the as you to all that the to was or a student starting shortly like income. we $XXX,XXX accretive customer of just I to I to going making higher mentioned just in more that's you household of overall And any know are you that be Perfect. range? if that you repayment wondering to the related

Melissa Rasmussen

there can to do the that our additional higher because broader sentiment while one at with loans, the implication, of some value into bands, that our related consumer the student get be may brands a stores. consumers at of income these shopping down likely we So expect see trade we'll

us Now our target that target debt. has customer loan portion a -- consumer our our smaller shows student of data

Operator

comes question Carden with Blair. Our Dylan final William from

Dylan Carden

Walmart that cost here margin the you from kind the the it's EBIT to business, explicitly of that losing indirect year? data net if idea be Just standpoint. is curious And ultimately to might be reductions, mitigate willing through of you'll accretive on implications next business the able express you an provided income of

Melissa Rasmussen

the Dylan, it's at level. to It that that some hole. fill will are take is Melissa. profit accretive Walmart you correct time Yes, EBIT

However, expand been our Eyeglass couple that a is Best a and so past grown continue decades factor to America's as of the declining that our the we fleet And in portion growth. World we've has business brands. our over of

what addition, has business the margins have. brands Walmart growth In lower than our

margin openings, store new of that to down hole. hole our an accretive as addition investment you but accretive sorry, profit needed more in our would currently. to an have cycle I'm continue or that we bottom seen cycle on the a fill because growth factor margin line to reductions investment wouldn't based cost profit is weren't of we we'll in to an drop on the brands, our that seen have through -- brands, fill in If intensive So much you growth

Dylan Carden

Is to you 'XX if it see you're pre-pandemic, dilutive line? business would what back saying? to you on Walmart that the So the EBIT be were dial 'XX,

Melissa Rasmussen

I'm you would dilutive to not see level. the saying it EBIT on be

You would just see lower portion it overall profit. of our as a

Dylan Carden

out capacity you that fleet? in you the are with coming the might maybe kind then Can a the And about retain that doctors, of Any those stores, doctors capacity speak across stores. to there deploy do comments from standpoint? them Okay. Walmart what actually for stores of the to

Reade Fahs

Yes.

to are a doctors It's stake. Our on complex it be transition of thing there. are choices the where sort variety going doctor-model-by-doctor-model, doctors state-by-state, location-by-location, to groups based to of the but to because a making talk able sort period contract has relates a of various

Dylan Carden

immediate be sort windfall, an from not away guess. I a back it's should utilization. thinking might it that We from of So capacity

Reade Fahs

I think don't of an it we think immediate should windfall. as

You've got doctor if nearby store similar wants model a shift a new over to piece. have to a

will say decisions. wouldn't doctors but I windfall, be an immediate So will it yes, -- making be various

Dylan Carden

to be kind you've that then action -- the question some of this do Is year still that over what on year. the a approach. The into that speak reviews that's Please capacity focus taken part it to of kind you sort going think can of we Is pricing, big close here, on I here of lot of know your the should the -- how some the sounds of the about periphery. your And investors a there you kind like And of expect you coming right? kind if would. just in last back Great. next particularly into of more quarters might on pricing. gap

Reade Fahs

of same year. the about too. believe yes, very will thing. causing We're pricing actions periphery come mean second lot terms the way, the nonheadline makes We into The study in by And We're thinking smaller. questions, a a pricing. we But the vigilant that ask the mentioned half other sound price. to little us of more play it that's

lever juice we pricing going So in the forward. more is think there

Operator

you. Thank remarks. back the I time, would Reade like now to for this conference to At closing turn

Reade Fahs

appreciate you speaking Thank interest much. QX next to very all forward our and look you all call. and we We us you for on your to Thank support, joining today. earnings

Operator

today's concludes This conference participating. for call. you Thank

now may You disconnect.

National Vision (EYE) 10 Aug 232023 Q2 Earnings call transcript