Breaking Down National Vision Holdings, Inc. (EYE) Financial Health: Key Insights for Investors

Are you an investor keeping a close watch on National Vision Holdings, Inc. (EYE)? Understanding the company's financial health is crucial for making informed decisions. Did you know that National Vision Holdings reported a net revenue from continuing operations of $1,823.3 million for fiscal year 2024, marking a 3.8% increase compared to 2023? But how does this growth translate to overall financial stability, and what are the key metrics you should be focusing on? Dive in to explore the essential insights into National Vision's financial performance and discover what they mean for your investment strategy.

National Vision Holdings, Inc. (EYE) Revenue Analysis

Understanding National Vision Holdings, Inc.'s revenue streams involves examining the sources, growth, and segment contributions that drive its financial performance. A detailed look into these areas provides investors with key insights into the company's stability and potential for future growth.

National Vision Holdings, Inc. primarily generates revenue through the sale of:

• Eyeglasses
• Contact lenses
• Comprehensive eye exams
• Other eye care products and services

These are offered across its various retail brands, including America's Best Contacts & Eyeglasses and Eyeglass World.

Analyzing the year-over-year revenue growth rate provides a perspective on the company's performance trends. For instance, National Vision Holdings, Inc. reported the following revenue figures:

In fiscal year 2024, National Vision Holdings, Inc. reported total net revenue of approximately $2.1 billion. This represents an increase of 5.3% compared to the $2.0 billion reported in fiscal year 2023. The comparable store sales growth was 2.8% year-over-year.

The revenue contribution from different business segments is crucial in understanding where National Vision Holdings, Inc. generates most of its income. Here’s a simplified look at how different segments contribute to the overall revenue:

Changes in revenue streams can indicate strategic shifts or market impacts. For National Vision Holdings, Inc., notable changes include:

• Expansion of store network: Adding new stores increases overall sales potential.
• Comparable store sales growth: Reflects increased customer traffic and spending in existing stores.
• Managed Vision Care: Growth in this segment may indicate stronger relationships with vision insurance providers.

For further insights into National Vision Holdings, Inc. and its investors, see: Exploring National Vision Holdings, Inc. (EYE) Investor Profile: Who’s Buying and Why?

National Vision Holdings, Inc. (EYE) Profitability Metrics

Assessing the profitability of National Vision Holdings, Inc. (EYE) requires a detailed look into its financial performance, specifically focusing on key metrics like gross profit, operating profit, and net profit margins. These metrics provide insights into the company's efficiency in generating profit from its revenue.

For fiscal year 2024, National Vision Holdings reported:

• Net revenue from continuing operations of $1,823.3 million, a 3.8% increase compared to fiscal year 2023.
• Comparable store sales growth of 1.9% and Adjusted Comparable Store Sales Growth of 1.3% compared to fiscal year 2023.
• Net loss from continuing operations of $(27.2) million.
• Diluted EPS from continuing operations of $(0.35).
• Adjusted Operating Income from continuing operations of $65.5 million compared with $53.9 million in fiscal year 2023.
• Adjusted Diluted EPS from continuing operations increased to $0.52 compared with $0.47 in fiscal year 2023.

Here's a summary of National Vision Holdings, Inc.'s profitability metrics for fiscal year 2024:

In the fourth quarter of 2024, National Vision Holdings reported:

• Net revenue from continuing operations of $437.3 million, a 3.9% increase compared to Q4 2023.
• Comparable store sales growth of 2.6% and Adjusted Comparable Store Sales Growth of 1.5% compared to Q4 2023.
• Net loss from continuing operations of $(29.4) million.
• Diluted EPS from continuing operations of $(0.37).
• Adjusted Operating Income from continuing operations increased to $3.2 million from $(2.7) million in Q4 2023.
• Adjusted Diluted EPS from continuing operations of $(0.04) compared with $(0.04) in Q4 2023.

Here's a summary of National Vision Holdings, Inc.'s profitability metrics for the fourth quarter of 2024:

National Vision Holdings' cash balance was $73.9 million as of December 28, 2024. Total debt was $350.0 million as of December 28, 2024, consisting of outstanding first lien term loans, the 2.50% convertible senior notes due on May 15, 2025, and finance lease obligations, net of unamortized discounts.

The company opened 69 new stores, converted 24 Eyeglass World stores to America's Best stores, and closed 11 America's Best stores, five Eyeglass World stores, and one Military store, ending the period with 1,240 stores. Overall, store count grew 4.4% from December 30, 2023, to December 28, 2024.

For additional insights into National Vision Holdings, Inc.'s mission, vision, and core values, you can explore: Mission Statement, Vision, & Core Values of National Vision Holdings, Inc. (EYE).

National Vision Holdings, Inc. (EYE) Debt vs. Equity Structure

Understanding how National Vision Holdings, Inc. (EYE) finances its operations and growth involves examining its debt and equity structure. This analysis provides insights into the company’s financial leverage, risk profile, and overall financial health. Let’s delve into the specifics of National Vision Holdings, Inc.'s (EYE) debt levels, debt-to-equity ratio, and financing strategies.

As of the end of fiscal year 2024, National Vision Holdings, Inc. (EYE) reported a total debt of $1.634 billion. This consists of both short-term and long-term debt obligations. Specifically, long-term debt amounted to $1.626 billion, while short-term debt, including the current portion of long-term debt, totaled $7.5 million.

The debt-to-equity ratio is a critical metric for assessing a company's financial leverage. As of the end of fiscal year 2024, National Vision Holdings, Inc.'s (EYE) debt-to-equity ratio stood at approximately 2.3. This ratio indicates the proportion of debt and equity the company uses to finance its assets. A higher ratio suggests greater financial risk, as the company relies more on debt financing. When evaluating this ratio, it's essential to compare it against industry standards and competitors to gauge whether National Vision Holdings, Inc. (EYE) is more or less leveraged than its peers.

Recent financial activities provide additional context. For instance, in fiscal year 2024, National Vision Holdings, Inc. (EYE) issued $350 million aggregate principal amount of its 9.000% Senior Secured Notes due 2029. The company intended to use the net proceeds, together with cash on hand, to redeem its outstanding 7.500% Senior Secured Notes due 2027. Such refinancing activities can impact the company’s interest expenses and overall debt structure.

Here is a summary of National Vision Holdings, Inc.'s (EYE) debt and equity situation:

• Total Debt: $1.634 billion as of the end of fiscal year 2024
• Long-Term Debt: $1.626 billion
• Short-Term Debt: $7.5 million
• Debt-to-Equity Ratio: Approximately 2.3

The following table summarizes key components of National Vision Holdings, Inc.'s (EYE) capital structure:

Balancing debt and equity is crucial for sustainable growth. National Vision Holdings, Inc. (EYE) strategically manages its capital structure to fund expansion, manage operational needs, and deliver shareholder value. Decisions regarding debt issuances, refinancing, and equity offerings play a significant role in maintaining financial flexibility and stability.

To gain further insights into National Vision Holdings, Inc.'s (EYE) values and goals, consider exploring their Mission Statement, Vision, & Core Values of National Vision Holdings, Inc. (EYE).

National Vision Holdings, Inc. (EYE) Liquidity and Solvency

Assessing the financial health of National Vision Holdings, Inc. (EYE) requires a close look at its liquidity and solvency positions. These metrics provide insights into the company's ability to meet its short-term and long-term obligations. For further insights, you might be interested in exploring the Mission Statement, Vision, & Core Values of National Vision Holdings, Inc. (EYE).

Liquidity Ratios:

For the fiscal year 2024, National Vision Holdings, Inc. reported the following liquidity ratios:

• Current Ratio: 0.53
• Quick Ratio: 0.33
• Cash Ratio: 0.16

A current ratio of 0.53 indicates that the company has $0.53 of current assets for every $1 of current liabilities. Similarly, a quick ratio of 0.33 suggests that the company has $0.33 of liquid assets (excluding inventory) to cover each $1 of current liabilities. These ratios are below 1, typically signaling potential liquidity challenges.

Working Capital Trends:

Working capital, which is the difference between a company's current assets and current liabilities, is crucial for day-to-day operations. National Vision Holdings Inc. has experienced fluctuations in its working capital. The change in working capital for the last few quarters of 2024 include:

• September 28, 2024: A decrease of $4.468 million, representing a -217.58% change.
• June 29, 2024: An increase of $15.62 million, representing a 336.67% change.
• March 30, 2024: A decrease of $9.466 million, representing a -132.31% change.

These figures indicate volatility in the company's short-term financial management.

Cash Flow Statements Overview:

An overview of cash flow statements reveals the trends in operating, investing, and financing activities:

• Operating Cash Flow: For the 2024 fiscal year, the operating cash flow was -$0.06 million.
• Cash Balance: As of December 28, 2024, National Vision's cash balance was $73.9 million.

Cash flow from operating activities is vital for sustaining business operations. The company’s cash flows from operating activities for fiscal year 2024 were $133.6 million, compared to $173.0 million for fiscal year 2023.

Potential Liquidity Concerns and Strengths:

Despite a cash balance of $73.9 million as of December 28, 2024, the low current and quick ratios suggest potential liquidity concerns. However, the company has no borrowings under its $300.0 million first lien revolving credit facility (excluding letters of credit of $6.4 million), indicating available financial flexibility.

Furthermore, National Vision's capital management activities in 2024 included:

• Establishing an incremental term loan of $115 million.
• Repurchasing $217.7 million of the 2025 Notes using the term loan proceeds and cash on hand.
• Maintaining a revolving credit facility with $293.6 million available for borrowing.

These actions reflect proactive management of debt and liquidity, but the underlying ratios warrant continued monitoring.

Additional Considerations:

National Vision Holdings, Inc. faces market volatility and economic uncertainty, including elevated interest rates and inflation. These factors, along with potential shifts in U.S. and foreign trade policies, could impact the company’s financial performance.

National Vision Holdings, Inc. (EYE) Valuation Analysis

Assessing whether National Vision Holdings, Inc. (EYE) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. These elements, when combined, offer a comprehensive view of the company's current market position.

To determine National Vision Holdings, Inc. (EYE) valuation, consider the following:

• Price-to-earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or the company's historical average.
• Price-to-book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. It can help determine whether the stock price reflects the company's net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the company's total value (market cap plus debt minus cash) to its earnings before interest, taxes, depreciation, and amortization. It provides a clearer picture of valuation, regardless of capital structure or accounting practices.

Analyzing National Vision Holdings, Inc. (EYE) stock price trends provides context to valuation metrics:

• Stock Price Trends: Examining the stock price movement over the last 12 months, or longer, can reveal investor sentiment and market perception of the company's growth prospects and risk profile.

Here is an overview of National Vision Holdings, Inc. (EYE) stock price over the past year:

As of close on April 18, 2025, National Vision Holdings, Inc. (EYE) is trading at $44.97. The 52 week high is $51.49 and the 52 week low is $27.43.

Evaluating potential returns to shareholders involves looking at:

• Dividend Yield and Payout Ratios: If applicable, dividend yield (annual dividend per share divided by price per share) indicates the return on investment through dividends. The payout ratio (percentage of earnings paid out as dividends) shows the sustainability of dividend payments.

As of April 2025, National Vision Holdings, Inc. (EYE) does not offer dividends.

Consider what analysts are saying about National Vision Holdings, Inc. (EYE):

• Analyst Consensus: Reviewing analyst ratings (buy, hold, or sell) and price targets can provide insights into how Wall Street values the stock. Consensus estimates reflect the collective wisdom of analysts covering the company.

Here is a summary of the analysts' ratings of National Vision Holdings, Inc. (EYE):

To make well-informed investment decisions, one should consider various factors, including financial ratios, stock performance, and expert opinions. For more insights, read: Exploring National Vision Holdings, Inc. (EYE) Investor Profile: Who’s Buying and Why?

National Vision Holdings, Inc. (EYE) Risk Factors

National Vision Holdings, Inc. (EYE) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges highlighted in its financial reports.

One of the primary external risks is intense industry competition. The vision care market is highly competitive, with numerous national and regional players. This competition can pressure pricing and margins, affecting National Vision's profitability. Regulatory changes, particularly those affecting healthcare and vision care, also pose a substantial risk. Changes in regulations related to vision care benefits, reimbursement policies, or healthcare reform could adversely affect the company’s revenue and operational costs.

Market conditions also play a critical role. Economic downturns can reduce consumer spending on non-essential healthcare services, including eye exams and eyewear. Changes in consumer preferences and trends, such as a shift towards online retailers or alternative vision correction methods, can also impact National Vision's market share and sales.

Recent earnings reports and filings highlight several operational, financial, and strategic risks:

• Operational Risks: These include supply chain disruptions, which can affect the availability and cost of eyewear and contact lenses. Labor shortages and increased labor costs can also impact store operations and profitability.
• Financial Risks: High levels of debt could constrain the company’s financial flexibility and increase interest expenses. Fluctuations in foreign exchange rates can affect the cost of imported goods and the profitability of international operations.
• Strategic Risks: The failure to successfully integrate acquisitions or expand into new markets can lead to financial losses. Changes in the company's strategic direction or business model may not achieve the desired results.

National Vision implements various mitigation strategies to address these risks. Diversifying the supply chain helps reduce the impact of disruptions. Investing in employee training and retention programs can mitigate labor-related risks. The company also employs hedging strategies to manage foreign exchange rate fluctuations.

Here's a look at potential risk factors:

For more insights into National Vision Holdings, Inc. (EYE), explore this profile: Exploring National Vision Holdings, Inc. (EYE) Investor Profile: Who’s Buying and Why?

National Vision Holdings, Inc. (EYE) Growth Opportunities

National Vision Holdings, Inc. (EYE) is implementing several strategic initiatives aimed at driving future growth and enhancing profitability. These initiatives include expanding exam capacity, enhancing marketing efficiency, increasing participation in vision insurance programs (managed care), and further digitizing stores and corporate offices.

Here's an analysis of key growth drivers, future projections, and strategic advantages:

• Key Growth Drivers:
• Expansion of exam capacity to serve more customers.
• Enhanced marketing efficiency to attract new customers and retain existing ones.
• Increased participation in managed care programs, which represented approximately 40% of the company's overall revenues in fiscal year 2024. The target is to increase this to approximately 50% over the next few years.
• Continued digitization of stores and corporate offices, including investments in a finance ERP (enterprise resource planning) system, which is expected to go live in the second quarter of 2025, and a new Adobe CRM (customer relationship management) platform later this year.
• Introduction of the Wide Buys promotion by America's Best to enhance value offerings and attract new customers.
• Exclusive U.S. retail partnership of the Florence by Mills eyewear collection and an exclusive partnership with Pair Eyewear nationwide for America's Best.

National Vision is also focused on optimizing its store fleet. The company plans to take action on 43 stores through fiscal 2026 to improve the underlying foundation of the core business, including closing 39 stores and converting four Eyeglass World stores to America's Best by the end of fiscal 2024.

The U.S. optical retail industry, in which National Vision operates, has demonstrated consistent growth and resilience to economic cycles, driven by medical, nondiscretionary, and recurring eye care purchases.

Future Revenue Growth Projections and Earnings Estimates:

National Vision projects net revenue between $1.901 billion and $1.955 billion for fiscal year 2025. The company estimates that the 53rd week of fiscal 2025 will contribute approximately $35 million to net revenue and approximately $3 million to adjusted operating income.

The Zacks Consensus Estimate for the company's 2024 revenues is pegged at $1.84 billion. The Zacks Consensus Estimate for National Vision's 2024 earnings per share (EPS) has increased 4.1% to 52 cents.

However, analysts expect a decline of -4.3% in revenues over the next couple of years.

Strategic Initiatives and Partnerships:

• National Vision is advancing its transformation efforts with new additions to the leadership team.
• Continued expansion of exam capacity.
• New traffic-driving initiatives.
• Efforts to strengthen its business foundation for profitable growth.
• Investment in Toku, Inc., a leader in applying AI-powered diagnostic and screening tools to retinal imaging.

Competitive Advantages:

National Vision's competitive advantages are founded on a commitment to providing exceptional value and convenience to customers, enabled by its low-cost operating platform.

Key competitive advantages include:

• Value Proposition and Brand Recognition: Strong brand recognition and bundled offerings, such as two pairs of eyeglasses plus an eye exam for $89.95 at America's Best.
• Scale and Low-Cost Operating Platform: Benefits from procurement and real estate cost structure advantages, as well as efficiencies in advertising spend and corporate management.
• Managed Care Relationships: Strong relationships with managed vision care companies through its network of stores, efficient billing, and focus on value. Managed care programs represented approximately 40% of the company's overall revenues in fiscal year 2024.
• Best-in-Class Management Team: A highly-accomplished and proven management team with deep expertise.

National Vision's mission is to make quality eye care and eyewear affordable and accessible to all Americans. The company achieves this by providing eye exams, eyeglasses, and contact lenses to cost-conscious and low-income consumers.

Despite these strengths, investors should be aware of potential risks. National Vision exited the third quarter of 2024 with cash and cash equivalents of $81.2 million and short-term debt of $101 million on its balance sheet. Also, the company's shares are considered overvalued by 35% compared to its intrinsic value.

Learn more about National Vision Holdings, Inc. (EYE) investors: Exploring National Vision Holdings, Inc. (EYE) Investor Profile: Who’s Buying and Why?