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National Vision (EYE) Store Openings Aid, Macro Issues Stay
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National Vision (EYE - Free Report) has been gaining market share on positive comps. The company’s strong focus on opening new stores is encouraging. However, National Vision's impending termination of the Legacy business might dent growth. The stock carries a Zacks Rank #3 (Hold) currently.
National Vision’s all four subsegments within Owned and Host are consistently gaining market share, banking on several growth drivers. Diminishing eyesight with increasing age leads new customers to buy corrective eyewear. There is also 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. National Vision is expanding sales by continuing the rollout of its remote medicine technology. National Vision is also deploying remote medicine technology in tandem with electronic health record technology to expand capacity, better in-store efficiencies and improve patient experience. The combination of these initiatives is resulting in added eye exam capacity in sales that the company would not have had otherwise.
National Vision plans to continue executing core growth initiatives and further investing in strengthening competitive advantages. In terms of store expansion, the company continues to see sizable new opportunities for many years to come. Despite many supply chain obstacles, during the third quarter, National Vision opened 21 new stores and is on track to open nearly 65 to 70 new stores in 2023. The company noted that the new stores opened over the past 12 months have been performing well and in line with its expectations.
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 also noted that it continues to focus on marketing efficiency and is content to be leveraging marketing expenses this year.
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. In connection with the termination of the Walmart contract, the company recorded $60.1 million related to goodwill of the Legacy segment, $9.1 million related to the Walmart contracts and relationship intangible asset, and $10.2 million related to property and equipment at Walmart stores and the company’s AC Lens business in the third quarter of 2023.
Further, rising inflation is resulting in increased costs and expense pressure for National Vision. The company anticipates the pressure from increases in raw materials prices to 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.
Year to date, the stock has plunged 45.5% against the industry’s 2.7% rise.
Estimates for Insulet’s 2023 earnings per share have moved up from $1.90 to $1.91 in the past 30 days. Shares of the company have plunged 26% in the past year compared with the industry’s decline of 2.6%.
PODD’s earnings surpassed estimates in each of 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 12.3% in the past year. Earnings estimates for Haemonetics have increased from $3.86 per share to $3.89 per share for 2023 and from $4.11 per share to $4.15 per share for 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 came up with an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.43 to $1.44 in the past 30 days. Shares of the company have increased 11.2% in the past year compared with the industry’s growth of 2.1%.
DXCM’s earnings surpassed estimates in each of 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 (EYE) Store Openings Aid, Macro Issues Stay
National Vision (EYE - Free Report) has been gaining market share on positive comps. The company’s strong focus on opening new stores is encouraging. However, National Vision's impending termination of the Legacy business might dent growth. The stock carries a Zacks Rank #3 (Hold) currently.
National Vision’s all four subsegments within Owned and Host are consistently gaining market share, banking on several growth drivers. Diminishing eyesight with increasing age leads new customers to buy corrective eyewear. There is also 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. National Vision is expanding sales by continuing the rollout of its remote medicine technology. National Vision is also deploying remote medicine technology in tandem with electronic health record technology to expand capacity, better in-store efficiencies and improve patient experience. The combination of these initiatives is resulting in added eye exam capacity in sales that the company would not have had otherwise.
National Vision plans to continue executing core growth initiatives and further investing in strengthening competitive advantages. In terms of store expansion, the company continues to see sizable new opportunities for many years to come. Despite many supply chain obstacles, during the third quarter, National Vision opened 21 new stores and is on track to open nearly 65 to 70 new stores in 2023. The company noted that the new stores opened over the past 12 months have been performing well and in line with its expectations.
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 also noted that it continues to focus on marketing efficiency and is content to be leveraging marketing expenses this year.
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. In connection with the termination of the Walmart contract, the company recorded $60.1 million related to goodwill of the Legacy segment, $9.1 million related to the Walmart contracts and relationship intangible asset, and $10.2 million related to property and equipment at Walmart stores and the company’s AC Lens business in the third quarter of 2023.
Further, rising inflation is resulting in increased costs and expense pressure for National Vision. The company anticipates the pressure from increases in raw materials prices to 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.
Year to date, the stock has plunged 45.5% against the industry’s 2.7% rise.
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) . Insulet sports a Zacks Rank #1 (Strong Buy), while Haemonetics and DexCom each presently 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 moved up from $1.90 to $1.91 in the past 30 days. Shares of the company have plunged 26% in the past year compared with the industry’s decline of 2.6%.
PODD’s earnings surpassed estimates in each of 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 12.3% in the past year. Earnings estimates for Haemonetics have increased from $3.86 per share to $3.89 per share for 2023 and from $4.11 per share to $4.15 per share for 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 came up with an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.43 to $1.44 in the past 30 days. Shares of the company have increased 11.2% in the past year compared with the industry’s growth of 2.1%.
DXCM’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.