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National Vision's (EYE) Market Expansion Aids, Inflation Ails
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National Vision (EYE - Free Report) continues to gain market share on improving consumption patterns. The company’s strong focus on opening new stores is also encouraging. Legacy business termination might mar growth. The stock carries a Zacks Rank #3 (Hold).
National Vision’s four subsegments within Owned and Host are consistently gaining market share, banking on several growth drivers. Diminishing eyesight with increasing age causes new customers to buy corrective eyewear. Meanwhile, there’s a steady and consistent replacement cycle in place as customers replace or purchase new eyewear for a variety of reasons, including changes in prescriptions, fashion trends and necessity. America's Best and Eyeglass World are particularly driving revenues.
The company is expanding sales through the continued rollout of its remote medicine technology. National Vision is deploying remote medicine technology in tandem with electronic health record technology to drive expanded capacity, improve in-store efficiencies and improve patient experience. The combination of these initiatives is resulting in added exam capacity in sales that the company would not have had otherwise.
Per the company’s third-quarter update, National Vision opened 70 new America’s Best and Eyeglass World stores. Unit growth in America’s Best and Eyeglass World brands increased 5.3% on a combined basis over the total store base last year. The company ended the quarter with 1402 stores and is on track to open between 65 stores and 70 stores in 2023. It is also on track with the expansion into at least an additional 200 remote-enabled stores in 2023.
National Vision plans to continue executing its core growth initiatives and further invest in strengthening competitive advantages. In terms of store expansion, the company continues to see a sizable new opportunity with growth for many years to come.
Per National Vision, marketing continues to be a key factor in driving traffic to its stores, given the infrequent purchase cycle for eyeglasses. In the current environment of high inflation, the company continues to focus on marketing efficiency this year.
Year to date, National Vision has invested $82 million in capital expenditures, primarily focused on new store openings and investment in labs, distribution centers and customer-facing technology. The company currently remains on track for 2023 CapEx in the range of $115 million to $120 million to support key growth initiatives.
The company’s merchandising and distribution teams continue to execute well and are confident that the current inventory levels are sufficient to support continued growth in 2023. Overall, National Vision continues to utilize its strong balance sheet and cash flow to invest in strategic initiatives to enhance customer experience and strengthen its market position.
On the flip side, in July 2023, National Vision announced that its long-term partnership with Walmart is going to terminate on Feb 23, 2024. National Vision, in this regard, noted that this impending termination may significantly impact the company’s business. The transition period, including Walmart’s solicitation period under the agreements, may cause disruption to the business, including a reduction in sales, productivity and focus, and may make it harder to retain associates and optometrists, which in turn could adversely impact the company’s financial condition and results of operations. Due to these factors, the costs to retain associates and optometrists during the transition period may increase.
Added to this, rising inflation is resulting in increased costs and expense pressure for National Vision. The company anticipates that pressure from increases in raw materials prices could have an impact on its costs applicable to revenues in 2023. Wage investments as a result of inflation and an increasingly competitive recruiting market for vision care professionals due to the pandemic and related effects have had and may continue to have, an impact on the company’s profitability.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have decreased 40.1% in the past year compared with the industry’s decline of 6.3%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Haemonetics’ stock has risen 2.8% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 in 2023 and from $4.07 to $4.11 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.43 in the past 30 days. Shares of the company have fallen 6.8% in the past year compared with the industry’s decline of 6.6%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
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National Vision's (EYE) Market Expansion Aids, Inflation Ails
National Vision (EYE - Free Report) continues to gain market share on improving consumption patterns. The company’s strong focus on opening new stores is also encouraging. Legacy business termination might mar growth. The stock carries a Zacks Rank #3 (Hold).
National Vision’s four subsegments within Owned and Host are consistently gaining market share, banking on several growth drivers. Diminishing eyesight with increasing age causes new customers to buy corrective eyewear. Meanwhile, there’s a steady and consistent replacement cycle in place as customers replace or purchase new eyewear for a variety of reasons, including changes in prescriptions, fashion trends and necessity. America's Best and Eyeglass World are particularly driving revenues.
The company is expanding sales through the continued rollout of its remote medicine technology. National Vision is deploying remote medicine technology in tandem with electronic health record technology to drive expanded capacity, improve in-store efficiencies and improve patient experience. The combination of these initiatives is resulting in added exam capacity in sales that the company would not have had otherwise.
Per the company’s third-quarter update, National Vision opened 70 new America’s Best and Eyeglass World stores. Unit growth in America’s Best and Eyeglass World brands increased 5.3% on a combined basis over the total store base last year. The company ended the quarter with 1402 stores and is on track to open between 65 stores and 70 stores in 2023. It is also on track with the expansion into at least an additional 200 remote-enabled stores in 2023.
National Vision plans to continue executing its core growth initiatives and further invest in strengthening competitive advantages. In terms of store expansion, the company continues to see a sizable new opportunity with growth for many years to come.
National Vision Holdings, Inc. Price
National Vision Holdings, Inc. price | National Vision Holdings, Inc. Quote
Per National Vision, marketing continues to be a key factor in driving traffic to its stores, given the infrequent purchase cycle for eyeglasses. In the current environment of high inflation, the company continues to focus on marketing efficiency this year.
Year to date, National Vision has invested $82 million in capital expenditures, primarily focused on new store openings and investment in labs, distribution centers and customer-facing technology. The company currently remains on track for 2023 CapEx in the range of $115 million to $120 million to support key growth initiatives.
The company’s merchandising and distribution teams continue to execute well and are confident that the current inventory levels are sufficient to support continued growth in 2023. Overall, National Vision continues to utilize its strong balance sheet and cash flow to invest in strategic initiatives to enhance customer experience and strengthen its market position.
On the flip side, in July 2023, National Vision announced that its long-term partnership with Walmart is going to terminate on Feb 23, 2024. National Vision, in this regard, noted that this impending termination may significantly impact the company’s business. The transition period, including Walmart’s solicitation period under the agreements, may cause disruption to the business, including a reduction in sales, productivity and focus, and may make it harder to retain associates and optometrists, which in turn could adversely impact the company’s financial condition and results of operations. Due to these factors, the costs to retain associates and optometrists during the transition period may increase.
Added to this, rising inflation is resulting in increased costs and expense pressure for National Vision. The company anticipates that pressure from increases in raw materials prices could have an impact on its costs applicable to revenues in 2023. Wage investments as a result of inflation and an increasingly competitive recruiting market for vision care professionals due to the pandemic and related effects have had and may continue to have, an impact on the company’s profitability.
Key Picks
Some better-ranked stocks in the broader medical space are Insulet (PODD - Free Report) , Haemonetics (HAE - Free Report) and DexCom (DXCM - Free Report) . While Insulet presently sports a Zacks Rank #1 (Strong Buy), Haemonetics and DexCom each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have decreased 40.1% in the past year compared with the industry’s decline of 6.3%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Haemonetics’ stock has risen 2.8% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 in 2023 and from $4.07 to $4.11 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.43 in the past 30 days. Shares of the company have fallen 6.8% in the past year compared with the industry’s decline of 6.6%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.