Coronavirus BRIEFING

National Vision Provides Update on Store Reopenings, April and May Sales

More Images
DULUTH, Ga.—National Vision Holdings, Inc. (NASDAQ: EYE) , one of the nation’s largest optical retailers, provided a business update late yesterday regarding the completion of its gradual store reopenings that began in April following temporary closures in March relating to the COVID-19 pandemic. “Having successfully emerged from the pandemic-induced temporary store closure chapter, we now find both our country and our company grappling with a sudden heightened consciousness of age-old racial injustices and inequities,” said Reade Fahs, CEO.

“Amidst these challenges, the National Vision family has maintained a long-term focus on safety, cohesiveness and care for both our internal and external communities that is at the center of all our decision making. Throughout it all, our interactions with our patients and customers have reminded us of the important role we play within the communities we serve as both a health care provider and an employer.”

Following a temporary closure to the public due to COVID-19, all of the company’s five retail brands—America’s Best Contacts & Eyeglasses, Eyeglass World, Vision Centers inside select Walmart stores, Vista Opticals inside select Fred Meyer stores and on select military bases—are now open to the public with enhanced safety and cleaning protocols, the company said.

Subsequently, several stores have been affected by recent non-peaceful protests, as VMAIL previously reported, while others have been temporarily closed in compliance with local curfews or are operating with reduced hours. Currently, seven stores are temporarily closed due to damage.

“Our associates and network of optometrists have embraced the newly-implemented safety and cleaning protocols, and are available to provide much-needed access to low cost eyewear and eyecare,” Fahs said. “With the reopening of our family of brands, we are encouraged by the response of our customers and patients thus far, which we believe reflects our strong value proposition, as well as pent-up demand and benefits from government stimulus payments. As May progressed, our sales trend improved each week, and our stores generated a year-over-year increase in the last week of the month.”

NVI presented its current estimates of total comparable store sales growth and adjusted comparable store sales growth for the first two months of the company's second fiscal quarter, subject to customary closing procedures conducted at the end of the quarter. For the one month ended April 25, 2020, the company's estimated total comparable sales were down 83.9 percent.

Estimated adjusted comparable store sales growth was down 86.6 percent for the month ending April 25. For the one month ended May 30, 2020, the company's estimated total comparable sales were down 56.6 percent. Estimated adjusted comparable store sales growth was down 38.5 percent for the month ended May 30.

The company said it continues to expect second quarter results to be materially impacted by the store closures during the month of April, deleveraging of optometrist costs and associate payroll expense, shifts in product mix with reduced margin implications, the timing of unearned revenue, and incremental COVID-related costs.

As part of the store reopenings, National Vision said it has brought back most of its furloughed associates and has begun the return to previous levels of compensation and work hours across the organization, including NVI's executive officers, other than the CEO, who are returning to previous compensation levels.

In addition, the company restarted unit growth in May by opening three new America’s Best Contacts & Eyeglasses stores (and completed the transition of management of one select Walmart Vision Center location). Management now expects to open as many as 25 to 30 additional stores between now and the end of 2020, for a total of between 50 and 55 new store openings for the full year, below the withdrawn 2020 outlook of approximately 75 new stores.

As of May 30, the company had long-term debt, before unamortized discounts and debt issuance costs, of approximately $720 million, including borrowings relating to the recently completed offering of convertible debt, and liquidity in excess of $500 million, consisting of cash on hand of approximately $210 million and revolving credit availability of $294.3 million. Management currently estimates capital expenditures in 2020 to be in the range of $65 million to $75 million, depending on store openings and timing of capital projects.

National Vision Holdings, Inc. operates more than 1,100 retail stores in 44 states plus the District of Columbia and Puerto Rico.