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National Vision (EYE) Q1 Earnings Top Estimates, Margins Down

National Vision Holdings, Inc. EYE delivered an adjusted earnings per share (EPS) of 31 cents in the first quarter of 2023, down 6.1% from the year-ago quarter’s earnings of 33 cents per share. The figure topped the Zacks Consensus Estimate by 63.2%.

The adjustment excludes the impact of certain non-recurring charges like stock compensation expenses, the amortization of acquisition intangibles, among others.

GAAP EPS in the quarter was 22 cents compared with 34 cents in the year-ago quarter, marking a decline of 35.3%.

Revenues in Detail

Revenues in the first quarter totaled $562.4 million, surpassing the Zacks Consensus Estimate by 1.9%. The top line rose 6.6% from the year-ago quarter’s number. Net revenues were positively impacted by 2% due to the timing of unearned revenue.

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In the first quarter, comparable store sales rose 3%. Adjusted comparable store sales jumped 0.8%. National Vision opened 8 new stores to reach a store count of 1,357 at the end of the quarter. Overall, the store count rose 5% year over year.

Margins

Gross profit in the reported quarter was $398.3 million, up 5.7% from the prior-year quarter’s levels. The gross margin of 54.8% contracted 45 basis points (bps).

National Vision Holdings, Inc. Price, Consensus and EPS Surprise

 

National Vision Holdings, Inc. Price, Consensus and EPS Surprise
National Vision Holdings, Inc. Price, Consensus and EPS Surprise

 

National Vision Holdings, Inc. price-consensus-eps-surprise-chart | National Vision Holdings, Inc. Quote

 

Selling, general and administrative expenses rose 9.3% to $249.9 million.

Adjusted operating margin was 10.4%, contracted 158 bps year over year.

Financial Position

National Vision exited first quarter 2023 with cash and cash equivalents of $246.9 million compared with $299.4 million at the end of fourth quarter 2022.

Cumulative net cash flow from operating activities at the end of the quarter was $74.1 million compared with $47.1 million a year ago.

2023 Outlook

For 2023, net revenues are expected in the range of $2.08-$2.14 billion. The Zacks Consensus Estimate for the metric is currently pegged at $2.11 billion.

Adjusted earnings per share are estimated in the band of 42-60 cents. The Zacks Consensus Estimate for the same is currently pegged at 51 cents.

Adjusted comparable store sales to expected in the range of 0%-3%.

Our Take

National Vision reported first-quarter 2023 results on a bullish note, with better-than-expected revenues.  Amidst an uncertain macro environment, the company delivered positive comparable sales growth in the first quarter, primarily driven by strength in its managed care business.  During the reported quarter, the company opened eight new stores and ended the quarter with 1,357 stores. On a year-over-year basis, the company reported a significant decline in its earnings. The contraction of both margins on escalating expenses is discouraging too.

Zacks Rank & Other Key Picks

National Vision currently carries a Zacks Rank #3 (Hold).

A few other top-ranked stocks in the broader medical space that have announced quarterly results are AmerisourceBergen Corporation ABC, Merit Medical Systems, Inc. MMSI and Cardinal Health, Inc. CAH.

AmerisourceBergen, carrying a Zacks Rank of 2, reported second-quarter fiscal 2023 adjusted EPS of $3.50, beating the Zacks Consensus Estimate by 6.4%. Revenues of $ $63.46 billion outpaced the consensus mark by 4.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AmerisourceBergen has a long-term estimated growth rate of 8.9%. ABC’s earnings surpassed estimates in all the trailing four quarters, the average being 3.1%.

Merit Medical reported a first-quarter 2023 adjusted EPS of 64 cents, beating the Zacks Consensus Estimate by 16.4%. Revenues of $297.6 million surpassed the Zacks Consensus Estimate by 5.9%. It currently carries a Zacks Rank #2.

Merit Medical has a long-term estimated growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.

Cardinal Health reported a third-quarter fiscal 2023 adjusted EPS of $1.74, beating the Zacks Consensus Estimate by 17.6%. Revenues of $50.49 billion surpassed the Zacks Consensus Estimate by 1.7%. It currently carries a Zacks Rank #2.

Cardinal Health has a long-term estimated growth rate of 12.4%. CAH’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 12.3%.

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AmerisourceBergen Corporation (ABC) : Free Stock Analysis Report

Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report

National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report

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