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DULUTH, Ga.—National Vision Holdings Inc.(NASDAQ: EYE) reported Thursday that sales in the third quarter increased 12.4 percent to $485.4 million, driven by comparable-store sales growth of 11.6 percent (adjusted comparable-store growth of 12.4 percent). The company’s net income increased 2,860 percent to $35.3 million (which compares with net income of $1.2 million in the year-ago quarter), as adjusted EBITDA rose 89.3 percent to $88.1 million and adjusted operating income increased 160 percent to $67.7 million in the quarter ended Sept. 26, 2020.

“The National Vision team delivered an exceptionally strong Q3—establishing a new record for quarterly profit for our three years as a public company,” chief executive officer Reade Fahs said in the announcement. “And our Q3 comps were clearly the best I’ve witnessed since joining National Vision 18 years ago.”

He added, “We also opened 18 stores, including our 1,200th location, as we continued to build market share. These results reinforce our belief that our affordable eyecare and eyewear offerings have become even more important since the pandemic arrived.”

The new-store openings in the quarter included 17 under the America’s Best banner and one new Eyeglass World location. Over the past 12 months, National Vision has opened 56 net new stores (65 new stores offset by nine closed locations) as its focused on growing America's Best (58 new stores in the last 12 months) and Eyeglass World (two new locations in the last 12 months).

The strong gains in comparable-store sales were driven by the performance of Eyeglass World (with a comp-store gain of 18.4 percent in the quarter) and America's Best (with a comp-store increase of 13.6 percent). Also contributing to the comp-store gains were “positive comps in eyeglass and contact lens categories,” the company noted. And eyeglass comps were driven by increases in both customer transactions and average ticket prices.

The comp-store growth was achieved “even with a lower level of marketing expenses,” Fahs said.

For the first nine months of 2020, National Vision said net revenue decreased 8.1 percent to $1.2 billion from $1.3 billion during the same period of 2019. Net income totaled $1.19 million, which compares with $28.9 million in the year-ago period.

On a conference call with securities analysts, Fahs said he believes National Vision is well positioned for continuing growth and that he expects a decline in the number of optical retailer locations over the next year. “The industry is changing and we firmly believe that there will be less doors going forward than there were pre-COVID. There was already a trend toward that occurring… but that has been hastened by these new trends,” he added.

“We are confident that we are growing market share and we are confident that in January and February of next year we will have significantly less doors than before, and many of those doors that are open are seeing less patients. They are slowing down their books and taking less exams per hour and opening less hours overall.”

In its earnings announcement, National Vision said its cash balance was $377.0 million as of Sept. 26, and the company had no borrowings under its $300.0 million first lien revolving credit facility, exclusive of letters of credit of $5.7 million. The company's total debt was $651.7 million as of Sept. 26, consisting of outstanding first lien term loans, convertible senior notes and finance lease obligations, net of unamortized discounts. Its cash flow from operating activities for the first nine months of 2020 totaled $203.7 million, which compares with $170.9 million for the same period of 2019.

Among the other highlights of the third quarter, National Vision noted that it extended its contract with Walmart for three years into 2024 with current economics, published its first philanthropic impact report and added to its board two independent directors, Naomi Kelman and Susan Somersille.

Mr. Fahs concluded, “I would like to thank the 2,000-plus affiliated optometrists and over 12,000 associates at National Vision, as our performance stems from their tireless hard work, their resilience and their commitment to a ‘safety-first’ mindset and approach. As we enter the fourth quarter, while significant uncertainty remains, we are off to a strong start as the third quarter comp momentum continued throughout October.

"Overall, we continue to believe that we are well positioned to navigate the pandemic given our emphasis on safety in our store and supply chain operations and strong financial condition.”

The company opened 18 new stores, closed one store, and ended the quarter with 1,201 stores. Overall, store count grew 4.9 percent from Sept. 28, 2019, to Sept. 26, 2020.

Looking ahead, National Vision also provided its outlook for the 14-week and 53-week periods ending Jan. 2, 2021, respectively. The company estimated that the 53rd week will contribute approximately $35 million to net revenue with an approximately break-even impact to adjusted diluted EPS due to the net change in margin on unearned revenue.

The fourth quarter and fiscal 2020 outlook reflects the currently expected impacts related to COVID-19, however, the ultimate impacts of COVID-19 on the company’s financial outlook remain uncertain, the announcement noted. In addition, given the uncertainties, dynamic nature, resurgence, and unknown duration of the pandemic, National Vision said it continues to "evaluate additional measures that may be taken to respond to the impact of COVID-19 on its business."