National Vision Holdings Inc.

08/07/2025 | Press release | Distributed by Public on 08/07/2025 06:33

Quarterly Report for Quarter Ending June 28, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following contains management's discussion and analysis of our financial condition and results of operations and should be read together with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Form 10-Q (this "Form 10-Q") and the audited consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 26, 2025 (the "2024 Annual Report on Form 10-K.") This discussion contains forward-looking statements that reflect our plans, estimates and beliefs as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law. These forward-looking statements involve numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of the 2024 Annual Report on Form 10-K, as such risk factors may be updated from time to time in our periodic filings with the SEC. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read "Special Note Regarding Forward-Looking Statements" in this Form 10-Q.
Overview
We are one of the largest optical retailers in the U.S. and a leader in the value segment of the U.S. optical retail industry. We believe that vision is central to quality of life and that people deserve to see their best to live their best, regardless of their budget. Our mission is to make quality eye care and eyewear affordable and accessible to all Americans. We achieve this by providing eye exams, eyeglasses and contact lenses to value-seeking consumers. We deliver exceptional value and convenience to our customers, with attractive price points that provide value for a range of consumers. We reach our customers through a diverse portfolio of 1,240 retail stores across four brands and associated omni-channel consumer websites as of June 28, 2025.
Brand and Segment Information
As of June 28, 2025, our operations consisted of one reportable segment. During fiscal year 2024, our Walmart store operations, including our former Legacy reportable segment and components of our AC Lens operating segment met the requirements to be classified as discontinued operations. Refer to Part II. Item 8. Note 2. "Discontinued Operations" of the 2024 Annual Report on Form 10-K for more information on discontinued operations.
•Owned & Host - As of June 28, 2025, our owned brands consisted of 1,045 America's Best Contacts and Eyeglasses ("America's Best") retail stores and 122 Eyeglass World retail stores. Our Host brands consisted of 53 Vista Optical locations on select military bases and 20 Vista Optical locations within select Fred Meyer stores as of June 28, 2025. All brands utilize our centralized laboratories. This segment also includes sales from our America's Best, Eyeglass World, and Military omni-channel websites.
Our consolidated results also include the following:
•Results of other operating segments - Our dedicated e-commerce website, which was previously managed by AC Lens and was transitioned to NVI. Our e-commerce website sells contact lenses and optical accessory products to retail customers, and recognizes revenue when products have been delivered to the customer. Managed care business conducted by FirstSight, our wholly-owned subsidiary that is licensed as a single-service health plan under California law, which issues individual vision plans in connection with our America's Best operations in California.
•Corporate and other - Our corporate and other category represents unallocated corporate overhead expenses, which are a component of selling, general and administrative expenses and are comprised of various home office expenses such as payroll, occupancy costs and consulting and professional fees. Corporate overhead expenses also include field services for our four retail brands. Other expenses included in this category include certain non-cash charges, including asset impairment, stock-based compensation expense, and the impact of certain events, gains, or losses excluded from the assessment of segment performance.
•Effects of unearned and deferred revenue - Reportable segment information is presented on the same basis as our consolidated financial statements, except reportable segment sales which are presented on a cash basis, including point of sales for managed care payors and excluding the effects of unearned and deferred revenue, consistent with what our chief operating decision maker ("CODM") regularly reviews. We present the effects of unearned and deferred revenues separately from our reportable segment information. See Note 9. "Segment Reporting" in our condensed consolidated financial statements. Deferred revenue represents the timing difference of when we collect the cash from the customer and when services related to product protection plans and eye care club memberships are performed. Increases or decreases in deferred revenue during the reporting period represent cash collections in excess of, or below the recognition of, previous deferrals. Unearned revenue
represents the timing difference of when we collect cash from the customer and delivery/customer acceptance, and includes sales of prescription eyewear during approximately the last seven to ten days of the reporting period.
Trends and Other Factors Affecting Our Business
We continue to focus on expanding our target demographic, implementing new pricing architecture, enhancing the customer and patient experience, and optimizing cost structure, which are initiatives designed to strengthen our core business, improve our results of operations, and drive long-term shareholder value.
The overall economic environment continues to be uncertain and macroeconomic factors that may affect customer spending patterns, and thereby our results of operations, include trade restrictions such as sanctions, tariffs, reciprocal and retaliatory tariffs, and other tariff-related measures; inflation; employment rates; business conditions; changes in the housing market; the availability of credit; interest rates; tax rates and policies; fuel and energy costs; and overall consumer confidence in future economic conditions, as well as global political, socio-economic, cultural, and geopolitical uncertainty.
The United States has recently announced changes to U.S. trade policy, including increasing tariffs on imports, in some cases significantly, and potentially negotiating, or terminating existing, trade agreements. For example, on April 2, 2025, the United States announced a new universal baseline tariff of 10%, plus an additional country-specific tariff for select trading partners, on all U.S. imports. These actions, and retaliatory tariffs imposed by other countries on U.S. exports, have led to significant volatility and uncertainty in global markets, which is continuing. Additionally, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Less than 10% of our costs applicable to revenue are directly subject to tariffs from China. In Mexico, where our exposure relates to our outsourcing relationship with our third-party laboratory, we have mitigation plans in place and we estimate that less than one percent of our costs applicable to revenue are subject to tariffs in Mexico. We are continuing to evaluate these developments, including resulting impacts on our supply chain, commodity costs, and consumer spending, and our ability to offset a portion of these costs to mitigate the impact on our business, consolidated results of operations, and financial condition.
Inflation has resulted in increased costs and greater profitability pressure. We have experienced wage rate pressure and increases in raw materials prices, which we expect to continue. Inflationary pressures, including elevated wages, consumer confidence and preferences and increased raw material costs could impact our profitability and lead us to attempt to offset such increases through various pricing actions. We have historically employed a simple low price/high value strategy and seek to balance our pricing and growth in a way that consistently delivers savings to our customers. From time to time, and increasingly in connection with our new transformation initiatives, we may take pricing actions and introduce limited-time promotions or new offers designed to increase traffic, awareness and sales. Several factors may impact the level of success of such actions and promotions, including consumer sentiment, macroeconomic conditions and marketing effectiveness, and as a result, if they do not meet our expectations, they could negatively impact our margins and profitability.
Additionally, our ability to continue to attract and retain qualified vision care professionals impacts exam capacity and our operations. We believe factors such as an increasingly challenging recruiting market (in particular for new graduates), preferences for adjusted work schedules, and the demand for optometrists exceeding supply in certain areas have caused constraints in vision care professional availability, and therefore exam capacity, which are continuing. As a result, recruiting and retaining optometrists has become more challenging and the costs to employ or retain optometrists have increased and may increase further, potentially materially. Further, a limited number of professional corporations or similar entities provide for the vision care services at a number of our retail locations, exposing us to some concentration risk. A material change in our relationship with vision care professionals, whether resulting from constraints in exam capacity, a dispute with an eye care practitioner or a group of eye care practitioners controlling multiple practice locations, a government or regulatory authority challenging our operating structure or our relationship with vision care professionals, or other changes to applicable laws or regulations (or interpretations of the same), or the loss of these relationships, could impair our ability to provide services to our customers, cause our customers to go elsewhere for their optical needs, or result in legal sanctions against us. From time to time, we may elect to make strategic changes to our doctor model or otherwise make changes to our relationships with one or more of these practices, which could also lead to any of these risks.
Historically, our business has experienced seasonality in the first half of the year that we believe is primarily attributable to the timing of customers' income tax refunds and health insurance start/reset periods. We believe that many customers in our target market of value-seeking consumers may rely on tax refunds to pay for eyewear and eye care. A delay in the issuance of tax refunds or changes in the amount of tax refunds can, accordingly, have a negative impact on our quarterly financial results in the first half of the year. Consumer behavior with respect to the utilization of tax refund proceeds is also subject to change.
Refer to Part I, Item 1A. "Risk Factors" in the Company's 2024 Annual Report on Form 10-K for a more complete discussion of the risk factors we face.
How We Assess the Performance of Our Business
We consider a variety of financial and operating measures in assessing the performance of our business. The key measures we use to determine how our consolidated business and operating segments are performing are net revenue, costs applicable to revenue, and selling, general, and administrative expenses. In addition, we also review store growth, Adjusted Comparable Store Sales Growth, Adjusted Operating Income, Adjusted Operating Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Diluted EPS.
Net Revenue
We report as net revenue amounts generated in transactions with retail customers who are the end users of our products, services and plans. Comparable store sales growth and new store openings are key drivers of net revenue and are discussed below. Also, the timing of unearned revenue can affect revenue recognized in a particular period.
Costs Applicable to Revenue
Customer tastes and preferences, product mix, changes in technology, significant increases or slowdowns in production, and other factors impact costs applicable to revenue. The components of our costs applicable to revenue may not be comparable to other retailers.
Selling, General and Administrative
SG&A expenses generally fluctuate consistently with revenue due to the variable store, field office and corporate support costs; however, some fixed costs may decrease as a percentage of net revenue as our net revenues grow over time.
New Store Openings
The total number of new stores per year and the timing of store openings has had an impact, and we expect will continue to have an impact, on our results. We plan to open approximately 32 new stores in fiscal year 2025 to allow us to invest capital in existing operations to enhance the overall store experience. We are continuing to monitor and determine our plans for future new store openings at a level appropriate for incremental free cash flow generation.
Adjusted Comparable Store Sales Growth
We measure Adjusted Comparable Store Sales Growth as the increase or decrease in sales recorded by the comparable store base in any reporting period, compared to sales recorded by the comparable store base in the prior reporting period, which we calculate as follows: (i) sales are recorded on a cash basis (i.e., when the order is placed and paid for or submitted to a managed care payor, compared to when the order is delivered), utilizing cash basis point of sale information from stores; (ii) stores are added to the calculation during the 13th full fiscal month following the store's opening; (iii) closed stores are removed from the calculation for time periods that are not comparable; (iv) sales from partial months of operation are excluded when stores do not open or close on the first day of the month; and (v) when applicable, we adjust for the effect of the 53rd week. Quarterly, year-to-date and annual adjusted comparable store sales are aggregated using only sales from all whole months of operation included in both the current reporting period and the prior reporting period. When a partial month is excluded from the calculation, the corresponding month in the subsequent period is also excluded from the calculation. There may be variations in the way in which some of our competitors and other retailers calculate comparable store sales. As a result, our adjusted comparable store sales may not be comparable to similar data made available by other retailers.
Adjusted Comparable Store Sales Growth is a non-GAAP financial measure, which we believe is useful because it provides timely and accurate information relating to the two core metrics of retail sales: number of transactions and value of transactions. We use Adjusted Comparable Store Sales Growth as the basis for key operating decisions, such as allocation of advertising to particular markets and implementation of special marketing programs. Accordingly, we believe that Adjusted Comparable Store Sales Growth provides timely and accurate information relating to the operational health and overall performance of each brand. We also believe that, for the same reasons, investors find our calculation of Adjusted Comparable Stores Sales Growth to be meaningful.
Adjusted Operating Income, Adjusted Operating Margin, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Diluted EPS (collectively, the "Company Non-GAAP Measures")
The Company Non-GAAP Measures are key measures used by management to assess our financial performance. The Company Non-GAAP Measures are also frequently used by analysts, investors and other interested parties. We use the Company Non-GAAP Measures to supplement U.S. GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation and to compare our performance against that of other peer companies using similar measures. See "Non-GAAP Financial Measures" for definitions of the Company Non-GAAP Measures and for additional information.
Results of Operations
The following table summarizes key components of our results of operations for the periods indicated, both in dollars and as a percentage of our net revenue.
Three Months Ended Six Months Ended
In thousands, except earnings per share, percentage and store data
June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024
Revenue:
Net product sales $ 394,589 $ 361,967 $ 807,354 $ 750,050
Net sales of services and plans 91,834 89,766 189,393 184,477
Total net revenue 486,423 451,733 996,747 934,527
Costs applicable to revenue (exclusive of depreciation and amortization):
Products 114,686 111,213 231,600 224,417
Services and plans 85,685 82,367 173,961 164,709
Total costs applicable to revenue 200,371 193,580 405,561 389,126
Operating expenses:
Selling, general and administrative expenses 247,167 231,353 502,699 471,481
Depreciation and amortization 22,536 22,692 45,499 45,913
Asset impairment - 3,519 502 3,975
Other expense (income), net (100) (2) (100) (1)
Total operating expenses 269,603 257,562 548,600 521,368
Income from operations
16,449 591 42,586 24,033
Interest expense, net 4,210 3,196 8,782 7,452
Earnings (loss) from continuing operations before income taxes
12,239 (2,605) 33,804 16,581
Income tax provision (benefit)
3,514 (1,564) 10,893 5,869
Income (loss) from continuing operations
8,725 (1,041) 22,911 10,712
Loss from discontinued operations, net of tax (See Note 2) - (2,084) - (2,152)
Net income (loss)
$ 8,725 $ (3,125) $ 22,911 $ 8,560
Supplemental operating data:
Number of stores open at end of period 1,240 1,216 1,240 1,216
New stores opened during the period 8 17 17 31
Adjusted Operating Income from continuing operations $ 23,801 $ 14,073 $ 65,076 $ 47,967
Diluted earnings (loss) per share from continuing operations
$ 0.11 $ (0.01) $ 0.29 $ 0.14
Adjusted Diluted EPS from continuing operations $ 0.18 $ 0.15 $ 0.52 $ 0.44
Adjusted EBITDA from continuing operations $ 46,168 $ 36,383 $ 110,237 $ 93,117
Percentage of net revenue:
Total costs applicable to revenue 41.2 % 42.9 % 40.7 % 41.6 %
Selling, general and administrative expenses 50.8 % 51.2 % 50.4 % 50.5 %
Total operating expenses 55.4 % 57.0 % 55.0 % 55.8 %
Income (loss) from continuing operations
1.8 % (0.2) % 2.3 % 1.1 %
Adjusted Operating Income from continuing operations 4.9 % 3.1 % 6.5 % 5.1 %
Adjusted EBITDA from continuing operations 9.5 % 8.1 % 11.1 % 10.0 %
Three Months Ended June 28, 2025 compared to Three Months Ended June 29, 2024
Certain components of our operations met the requirements to be classified as discontinued operations. Refer to Note 2. "Discontinued Operations" in Part II. of the 2024 Annual Report on Form 10-K for information related to our discontinued operations. Unless otherwise noted, the discussion of U.S. GAAP results below is based on results from continuing operations.
Net revenue
The following presents, by segment and by brand, comparable store sales growth, stores open at the end of the period and net revenue from continuing operations for the three months ended June 28, 2025 compared to the three months ended June 29, 2024.
Comparable store sales growth from continuing operations(1)
Stores open at end of period
Net revenue(1)(2)
In thousands, except percentage and store data Three Months Ended
June 28, 2025 		Three Months Ended
June 29, 2024 		June 28, 2025 June 29, 2024 Three Months Ended
June 28, 2025 		Three Months Ended
June 29, 2024
Owned & Host segment
America's Best 6.3 % 2.9 % 1,045 1,003 $ 416,775 85.7 % $ 381,647 84.5 %
Eyeglass World 2.8 % (0.5) % 122 130 49,105 10.1 % 49,489 11.0 %
Military 4.4 % (0.1) % 53 54 5,844 1.2 % 5,625 1.2 %
Fred Meyer 6.9 % (2.7) % 20 29 2,428 0.5 % 2,724 0.6 %
Owned & Host segment total 1,240 1,216 $ 474,152 97.5 % $ 439,485 97.3 %
Other segments revenue - % - % - - 5,719 1.2 % 8,099 1.8 %
Effects of unearned and deferred revenue - % - % - - 6,552 1.3 % 4,149 0.9 %
Total 6.5 % 2.2 % 1,240 1,216 $ 486,423 100.0 % $ 451,733 100.0 %
Effect of deferred and unearned revenue on comparable store sales
(0.6) % 0.2 %
Adjusted Comparable Store Sales Growth from continuing operations
5.9 % 2.4 %
(1)We calculate total comparable store sales from continuing operations based on consolidated net revenue from continuing operations excluding the impact of (i) other segments net revenue, (ii) sales from stores opened less than 13 months, (iii) stores closed in the periods presented, (iv) sales from partial months of operation when stores do not open or close on the first day of the month and (v) if applicable, the impact of a 53rd week in a fiscal year. Brand-level comparable store sales growth and net revenue are calculated based on cash basis revenues consistent with what the CODM reviews, and consistent with reportable segment revenues presented in Note 9. "Segment Reporting" in our unaudited condensed consolidated financial statements included in Part I. Item 1. of this Form 10-Q.
(2)Percentages reflect line item as a percentage of net revenue, adjusted for rounding.
Total net revenue of $486.4 million for the three months ended June 28, 2025 increased $34.7 million, or 7.7%, from $451.7 million for the three months ended June 29, 2024. Approximately 70% of the increase was driven by growth from Adjusted Comparable Store Sales Growth from continuing operations and approximately 40% of the increase was driven by new store sales, partially offset by approximately 10% from effects of closed stores. Net revenue includes a positive 0.6% impact from the timing of unearned revenue for the three months ended June 28, 2025 as compared to three months ended June 29, 2024
Comparable store sales growth from continuing operations and Adjusted Comparable Store Sales Growth from continuing operations for the three months ended June 28, 2025 were 6.5% and 5.9%, respectively, both reflecting a higher average ticket and continued strength in the managed care cohort, partially offset by a slight decrease in customer traffic.
In the three months ended June 28, 2025, we opened eight America's Best stores and closed five America's Best stores. We also converted four Eyeglass World stores to America's Best stores from June 29, 2024 to June 28, 2025. Overall, store count grew 2.0% from June 29, 2024 to June 28, 2025 (exclusive of the aforementioned conversions, we had 38 net new America's Best stores, nine net closures of Fred Meyer stores, four net closures of Eyeglass World stores, and one net closure of a Military store).
Net product sales comprised 81.1% and 80.1% of total net revenue for the three months ended June 28, 2025 and June 29, 2024, respectively. Net product sales increased $32.6 million, or 9.0%, in the three months ended June 28, 2025 compared to the three months ended June 29, 2024, driven primarily by pricing and product mix initiatives in eyeglass sales of $29.9 million, contact lens sales of $2.6 million and other add-on sales.
Net sales of services and plans for the three months ended June 28, 2025 increased $2.1 million, or 2.3%, compared to the three months ended June 29, 2024, driven primarily by higher eye exam revenues of $1.8 million, or 3.2%.
Owned & Host segment net revenue.Net revenue increased $34.7 million, or 7.9%, driven primarily by comparable store sales growth and new store openings, partially offset by closed stores.
Effects of unearned and deferred revenue. Unearned and deferred revenue positively impacted net revenue by $2.4 million in the three months ended June 28, 2025 compared to the three months ended June 29, 2024, primarily driven by $2.6 million due to the timing of unearned revenue.
Costs applicable to revenue
Costs applicable to revenue of $200.4 million for the three months ended June 28, 2025 increased $6.8 million, or 3.5%, from $193.6 million for the three months ended June 29, 2024. As a percentage of net revenue, costs applicable to revenue decreased from 42.9% for the three months ended June 29, 2024 to 41.2% for the three months ended June 28, 2025. This decrease of 170 basis points as a percentage of net revenue was primarily driven by a margin improvement of 70 basis points of eyeglass frames, lenses and bundled packages and a favorable shift in product and service mix related to average customer ticket of 110 basis points, leveraging of optometrist-related costs of 60 basis points, partially offset by lower growth in eye exam margin and other add-ons revenue margin of 70 basis points.
Costs of products as a percentage of net product sales decreased from 30.7% for the three months ended June 29, 2024 to 29.1% for the three months ended June 28, 2025, primarily driven by a margin improvement of eyeglass frames, lenses and bundled packages and a favorable shift in product mix related to average customer ticket.
Owned & Host segment costs of products. Costs of products as a percentage of net product sales decreased from 29.7% for the three months ended June 29, 2024 to 28.3% for the three months ended June 28, 2025, primarily driven by a margin improvement of eyeglass frames, lenses and bundled packages and a favorable shift in product mix related to average customer ticket.
Costs of services and plans as a percentage of net sales of services and plans increased from 91.8% for the three months ended June 29, 2024 to 93.3% for the three months ended June 28, 2025. The increase was driven by lower growth in eye exam margin and other add-ons revenue.
Owned & Host segment costs of services and plans. Costs of services and plans as a percentage of net sales of services and plans increased from 91.3% for the three months ended June 29, 2024 to 92.6% for the three months ended June 28, 2025, and was driven by lower growth in eye exam margin and other add-ons revenue.
Selling, general and administrative
SG&A of $247.2 million for the three months ended June 28, 2025 increased $15.8 million, or 6.8%, from the three months ended June 29, 2024. As a percentage of net revenue, SG&A decreased from 51.2% for the three months ended June 29, 2024 to 50.8% for the three months ended June 28, 2025. SG&A as a percentage of net revenue was impacted by lower advertising investments of 60 basis points, lower legal and professional fees of 40 basis points, and lower occupancy expenses of 30 basis points, partially offset by higher variable incentive compensation expenses related to revenue and profitability growth of 90 basis points and other operating expenses.
Owned & Host SG&A. SG&A as a percentage of net revenue decreased from 39.6% for the three months ended June 29, 2024 to 38.1% for the three months ended June 28, 2025, primarily driven by lower advertising investments, occupancy expenses and other operating expenses.
Depreciation and amortization
Depreciation and amortization expense of $22.5 million for the three months ended June 28, 2025 decreased $0.2 million, or 0.7%, from $22.7 million for the three months ended June 29, 2024 primarily driven by lower amortization of intangible assets.
Asset Impairment
We recognized no impairment during the three months ended June 28, 2025, compared to $3.5 million impairment recognized during the three months ended June 29, 2024 for tangible long-lived assets and ROU assets associated with our retail stores. The store asset impairment charge during the three months ended June 29, 2024 is related to our Owned & Host segment and is driven by lower than projected customer sales and profitability in certain stores, and other entity-specific assumptions. We considered multiple factors including, but not limited to: forecasted scenarios related to store
performance and the likelihood that these scenarios would be ultimately realized; and the remaining useful lives of the assets. Asset impairment expenses were recognized in corporate and other.
Interest expense, net
Interest expense, net, was $4.2 million for the three months ended June 28, 2025, compared to $3.2 million for the three months ended June 29, 2024. The change was primarily a result of lower interest income on cash balances of $1.7 million, partially offset by lower interest expense on our debt of $0.4 million.
Income tax provision (benefit)
Our effective tax rates for the three months ended June 28, 2025 and June 29, 2024 were 28.7% and 60.0%, respectively. The change in effective tax rates was primarily driven by the tax impacts of consolidated VIEs, coupled with non-deductible compensation and other effects of permanent items. The change in effective rates was also influenced by using the ETR method during the three months ended June 29, 2024and the AETR method during the three months ended June 28, 2025.
Discontinued Operations
Loss from discontinued operations, net of tax of $2.1 million for the three months ended June 29, 2024 represents loss prior to the wind-down of the AC Lens operations. There were no discontinued operations results for the three months ended June 28, 2025.
Six Months Ended June 28, 2025 compared to Six Months Ended June 29, 2024
Certain components of our operations met the requirements to be classified as discontinued operations. Refer to Note 2. "Discontinued Operations" in Part II. of the 2024 Annual Report on Form 10-K for information related to our discontinued operations. Unless otherwise noted, the discussion of U.S. GAAP results below is based on results from continuing operations.
Net revenue
The following presents, by segment and by brand, comparable store sales growth, stores open at the end of the period and net revenue from continuing operations for the six months ended June 28, 2025 compared to the six months ended June 29, 2024.
Comparable store sales growth from continuing operations(1)
Stores open at end of period
Net revenue(1)(2)
In thousands, except percentage and store data Six Months Ended
June 28, 2025 		Six Months Ended
June 29, 2024 		June 28, 2025 June 29, 2024 Six Months Ended
June 28, 2025 		Six Months Ended
June 29, 2024
Owned & Host segment
America's Best 6.1 % 2.0 % 1,045 1,003 $ 870,506 87.3 % $ 792,791 84.8 %
Eyeglass World 2.9 % (2.9) % 122 130 101,591 10.2 % 106,449 11.4 %
Military 3.0 % (0.8) % 53 54 12,010 1.2 % 11,714 1.3 %
Fred Meyer 4.1 % (4.3) % 20 29 5,026 0.5 % 5,382 0.6 %
Owned & Host segment total 1,240 1,216 $ 989,133 99.2 % $ 916,336 98.1 %
Other segments revenue
- - - - 11,353 1.1 % 16,344 1.7 %
Effects of unearned and deferred revenue
- - - - (3,739) (0.3) % 1,847 0.2 %
Total 5.2 % 1.8 % 1,240 1,216 $ 996,747 100.0 % $ 934,527 100.0 %
Effect of deferred and unearned revenue on comparable store sales
0.5 % (0.5) %
Adjusted Comparable Store Sales Growth from continuing operations
5.7 % 1.3 %
(1)We calculate total comparable store sales from continuing operations based on consolidated net revenue from continuing operations excluding the impact of (i) other segments revenue, (ii) sales from stores opened less than 13 months, (iii) stores closed in the periods presented, (iv) sales from partial months of operation when stores do not open or close on the first day of the month and (v) if applicable, the impact of a 53rd week in a fiscal year. Brand-level comparable store sales growth and net revenue are calculated based on cash basis revenues consistent with what the CODM reviews, and consistent with reportable segment revenues presented in Note 9. "Segment Reporting" in our unaudited condensed consolidated financial statements included in Part I. Item 1. of this Form 10-Q.
(2)Percentages reflect line item as a percentage of net revenue, adjusted for rounding.
Total net revenue of $996.7 million for the six months ended June 28, 2025 increased $62.2 million, or 6.7%, from $934.5 million for the six months ended June 29, 2024. Of the $62.2 million increase, approximately 80% was driven by Adjusted Comparable Store Sales Growth from continuing operations and approximately 50% of the increase was driven by growth from new store sales, partially offset by approximately 20% from closed stores and approximately 10% by effects of unearned revenue for the period. Net revenue includes a negative (0.5)% impact from the timing of unearned revenue for the six months ended June 28, 2025 as compared to six months ended June 29, 2024.
Comparable store sales growth from continuing operations and Adjusted Comparable Store Sales Growth from continuing operations for the six months ended June 28, 2025 were 5.2% and 5.7%, respectively, both reflecting a higher average ticket, a slight increase in customer traffic and continued strength in the Company's managed care cohort.
In the six months ended June 28, 2025, we opened 17 new America's Best stores, closed nine Fred Meyer stores and eight America's Best stores. We also converted four Eyeglass World stores to America's Best stores from June 29, 2024 to June 28, 2025. Overall, store count grew 2.0% from June 29, 2024 to June 28, 2025 (exclusive of the aforementioned conversions, we had 38 net new America's Best stores, nine net closures of Fred Meyer stores, four net closures of Eyeglass World stores, and one net closure of a Military store).
Net product sales comprised 81.0% and 80.3% of total net revenue for the six months ended June 28, 2025 and June 29, 2024, respectively. Net product sales increased $57.3 million, or 7.6%, in the six months ended June 28, 2025 compared to the six months ended June 29, 2024, primarily due to pricing and product mix initiatives in eyeglass sales of $51.5 million, contact lens sales of $4.6 million and other add-on sales.
Net sales of services and plans for the six months ended June 28, 2025 increased $4.9 million, or 2.7%, compared to the six months ended June 29, 2024, driven primarily by higher exam revenues of $5.3 million, or 4.4%.
Owned & Host segment net revenue.Net revenue increased $72.8 million, or 7.9%, driven primarily by comparable store sales growth and new store openings, partially offset by closed stores.
Effects of unearned and deferred revenue. Unearned and deferred revenue negatively impacted net revenue by $5.6 million in the six months ended June 28, 2025 compared to the six months ended June 29, 2024, primarily driven by $4.6 million due to the timing of unearned revenue.
Costs applicable to revenue
Costs applicable to revenue of $405.6 million for the six months ended June 28, 2025 increased $16.4 million, or 4.2%, from $389.1 million for the six months ended June 29, 2024. As a percentage of net revenue, costs applicable to revenue decreased from 41.6% for the six months ended June 29, 2024 to 40.7% for the six months ended June 28, 2025. This decrease of 90 basis points as a percentage of net revenue was primarily driven by a margin improvement of 60 basis points for eyeglass frames, lenses and bundled packages, a favorable shift in product and services mix related to average customer ticket of 80 basis points and leveraging of optometrist-related costs of 20 basis points, partially offset by lower growth in eye exam margin and other add-ons revenue margin of 60 basis points and a 10 basis point decrease in margins of contact lenses.
Costs of products as a percentage of net product sales decreased from 29.9% for the six months ended June 29, 2024 to 28.7% for the six months ended June 28, 2025 primarily driven by margin improvement of eyeglass frames, lenses and bundled packages and a favorable product mix shift related to average customer ticket, partially offset by a slight decrease in margins of contact lenses.
Owned & Host segment costs of products. Costs of products as a percentage of net product sales decreased from 28.9% for the six months ended June 29, 2024 to 27.8% for the six months ended June 28, 2025, primarily driven by margin improvement of eyeglass frames, lenses and bundled packages, partially offset by a slight decrease in margins of contact lenses.
Costs of services and plans as a percentage of net sales of services and plans increased from 89.3% for the six months ended June 29, 2024 to 91.9% for the six months ended June 28, 2025. The increase was primarily driven by lower growth in eye exam margin and other add-ons revenue.
Owned & Host segment costs of services and plans. Costs of services and plans as a percentage of net sales of services and plans increased from 88.3% for the six months ended June 29, 2024 to 90.4% for the six months ended June 28, 2025. The increase was primarily driven by lower growth in eye exam margin and other add-ons revenue.
Selling, general and administrative
SG&A of $502.7 million for the six months ended June 28, 2025 increased $31.2 million, or 6.6%, from the six months ended June 29, 2024. As a percentage of net revenue, SG&A decreased from 50.5% for the six months ended June 29, 2024 to 50.4% for the six months ended June 28, 2025. SG&A as a percentage of net revenue was impacted by lower advertising investments of 60 basis points and a non-recurring litigation settlement from prior year of 50 basis points and other expenses of 10 basis points, partially offset by increases in variable incentive compensation expenses of 60 basis points primarily related to revenue and profitability growth and an increase in stock-based compensation of 50 basis points.
Owned & Host SG&A. SG&A as a percentage of net revenue decreased from 38.6% for the six months ended June 29, 2024 to 37.3% for the six months ended June 28, 2025, driven primarily by lower advertising investments and other operating expenses.
Depreciation and amortization
Depreciation and amortization expense of $45.5 million for the six months ended June 28, 2025 decreased $0.4 million, or 0.9%, from $45.9 million for the six months ended June 29, 2024 primarily driven by lower amortization of intangible assets.
Asset impairment
We recognized $0.5 million primarily for impairment related to tangible long-lived assets and ROU assets associated with our retail stores during the six months ended June 28, 2025, compared to $4.0 million impairment recognized during the six months ended June 29, 2024 for tangible long-lived assets and ROU assets associated with our retail stores. The store asset impairment charge is related to our Owned & Host segment and is driven by lower than projected customer sales and profitability in certain stores, and other entity-specific assumptions. We considered multiple factors including, but not limited to: forecasted scenarios related to store performance and the likelihood that these scenarios would be ultimately realized; and the remaining useful lives of the assets. Asset impairment expenses were recognized in corporate and other.
Interest expense, net
Interest expense, net was $8.8 million for the six months ended June 28, 2025, compared to $7.5 million for the six months ended June 29, 2024. The change was primarily a result of lower income on cash balances of $2.1 million, partially offset by lower interest expense on our debt of $0.7 million.
Income tax provision
Our effective tax rates for the six months ended June 28, 2025 and June 29, 2024 were 32.2%and 35.4%, respectively. The change in effective tax rates reflects tax impacts of consolidated VIEs, non-deductible compensation, discrete effects related to stock-based compensation and other effects of permanent items.
Discontinued Operations
Loss from discontinued operations, net of tax, of $2.2 million for the six months ended June 29, 2024 represents loss prior to the termination of our partnership with Walmart and the wind-down of the AC Lens operations. There were no discontinued operations results for the six months ended June 28, 2025.
Non-GAAP Financial Measures
Adjusted Operating Income, Adjusted Operating Margin, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Diluted EPS
We refer to these measures as the "Company Non-GAAP Measures." We define Adjusted Operating Income as net income (loss), plus interest expense (income), net and income tax provision (benefit), further adjusted to exclude stock-based compensation expense, (gain) loss on extinguishment of debt, asset impairment, litigation settlement, secondary offering expenses, management realignment expenses, long-term incentive plan expenses, amortization of acquisition intangibles, ERP and CRM implementation expenses, shareholder activism costs, severance and employee-related costs associated with organizational restructuring and certain other expenses. We define Adjusted Operating Margin as Adjusted Operating Income as a percentage of net revenue. We define EBITDA as net income (loss), plus interest expense (income), net, income tax provision (benefit) and depreciation and amortization. We define Adjusted EBITDA as
net income (loss), plus interest expense (income), net, income tax provision (benefit) and depreciation and amortization, further adjusted to exclude stock-based compensation expense, (gain) loss on extinguishment of debt, asset impairment, litigation settlement, secondary offering expenses, management realignment expenses, long-term incentive plan expenses, amortization of acquisition intangibles, ERP and CRM implementation expenses, shareholder activism, severance and employee-related costs associated with restructuring and certain other expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of net revenue. We define Adjusted Diluted EPS as diluted earnings (loss) per share, adjusted for the per share impact of stock-based compensation expense, (gain) loss on extinguishment of debt, asset impairment, litigation settlement, secondary offering expenses, management realignment expenses, long-term incentive plan expenses, amortization of debt discounts and deferred financing costs of our term loan borrowings, amortization of the conversion feature and deferred financing costs related to our 2025 Notes when not required under U.S. GAAP to be added back for diluted earnings (loss) per share, derivative fair value adjustments, ERP and CRM implementation expenses, shareholder activism, severance and employee-related costs associated with restructuring, and certain other expenses, less the tax effect of these adjustments, including tax expense (benefit) from stock-based compensation.
When presenting Adjusted Operating Income from continuing operations, EBITDA from continuing operations and Adjusted EBITDA from continuing operations we use the same definitions for Adjusted Operating Income, EBITDA and Adjusted EBITDA, respectively, and also exclude income (loss) from discontinued operations, net of tax. When presenting Adjusted Diluted EPS from continuing operations, we use the same definition for Adjusted Diluted EPS, and also exclude diluted earnings (loss) per share from discontinued operations. When presenting Adjusted Operating Margin from continuing operations, we use Adjusted Operating Income from continuing operations as a percentage of total net revenue. When presenting Adjusted EBITDA Margin from continuing operations, we use Adjusted EBITDA from continuing operations as a percentage of total net revenue.
The Company Non-GAAP Measures can vary substantially in size from one period to the next, and certain types of expenses are non-recurring in nature and consequently may not have been incurred in any of the periods presented below.
The Company Non-GAAP Measures have been presented as supplemental measures of financial performance that are not required by, or presented in accordance with U.S. GAAP, because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes The Company Non-GAAP Measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. We also use The Company Non-GAAP Measures to supplement U.S. GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation and to compare our performance against that of other peer companies using similar measures. Management supplements U.S. GAAP results with Non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than U.S. GAAP results alone. We continue to evaluate our use of the Company Non-GAAP measures in the context of the development of our business, and may introduce or discontinue certain measures in the future as we deem appropriate.
The Company Non-GAAP Measures are not recognized terms under U.S. GAAP and should not be considered as an alternative to net income or income from operations as a measure of financial performance or cash flows provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with U.S. GAAP. Additionally, these measures are not intended to be a measure of free cash flow available for management's discretionary use as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements. In evaluating The Company Non-GAAP Measures, we may incur expenses in the future that are the same as or similar to some of the adjustments in this presentation. Our presentation of The Company Non-GAAP Measures should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on our U.S. GAAP results in addition to using The Company Non-GAAP Measures.
The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:
•they do not reflect costs or cash outlays for capital expenditures or contractual commitments;
•they do not reflect changes in, or cash requirements for, our working capital needs;
•EBITDA, Adjusted EBITDA and Adjusted Operating Income do not reflect the interest expense (income), net, or the cash requirements necessary to service interest or principal payments, on our debt;
•EBITDA, Adjusted EBITDA and Adjusted Operating Income do not reflect period to period changes in taxes, income tax provision or the cash necessary to pay income taxes;
•they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and
•other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.
Because of these limitations, The Company Non-GAAP Measures should not be considered as measures of discretionary cash available to invest in business growth or to reduce indebtedness.
The following table reconciles our Adjusted Operating Income from continuing operations, Adjusted Operating Margin from continuing operations, EBITDA from continuing operations, Adjusted EBITDA from continuing operations, and Adjusted EBITDA Margin from continuing operations to net income (loss) from continuing operations; and Adjusted Diluted EPS from continuing operations to diluted EPS from continuing operations for the periods presented:
Three Months Ended Six Months Ended
In thousands June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024
Net income (loss)
$ 8,725 1.8 % $ (3,125) (0.7) % $ 22,911 2.3 % $ 8,560 0.9 %
Loss from discontinued operations, net of tax (See Note 2) - - % (2,084) (3.9) % - - % (2,152) (1.6) %
Income (loss) from continuing operations
8,725 1.8 % (1,041) (0.2) % 22,911 2.3 % 10,712 1.1 %
Interest expense, net 4,210 0.9 % 3,196 0.7 % 8,782 0.9 % 7,452 0.8 %
Income tax provision (benefit)
3,514 0.7 % (1,564) (0.3) % 10,893 1.1 % 5,869 0.6 %
Stock-based compensation expense (a)
5,306 1.1 % 4,750 1.1 % 12,335 1.2 % 7,164 0.8 %
Asset impairment (b)
- - % 3,519 0.8 % 502 0.1 % 3,975 0.4 %
Litigation settlement (c)
- - % - - % - - % 4,450 0.5 %
Amortization of acquisition intangibles(d)
169 0.0 % 382 0.1 % 338 0.0 % 763 0.1 %
ERP and CRM implementation expenses (g)
1,846 0.4 % 2,141 0.5 % 4,161 0.4 % 2,657 0.3 %
Other (h)
31 0.0 % 2,690 0.6 % 5,154 0.5 % 4,925 0.5 %
Adjusted Operating Income from continuing operations / Adjusted Operating Margin from continuing operations $ 23,801 4.9 % $ 14,073 3.1 % $ 65,076 6.5 % $ 47,967 5.1 %
Note: Percentages reflect line item as a percentage of net revenue, adjusted for rounding.
Some of the percentage totals in the table above do not foot due to rounding differences.
Three Months Ended Six Months Ended
In thousands June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024
Net income (loss)
$ 8,725 1.8 % $ (3,125) (0.7) % $ 22,911 2.3 % $ 8,560 0.9 %
Loss from discontinued operations, net of tax (See Note 2) - - % (2,084) (3.9) % - - % (2,152) (1.6) %
Income (loss) from continuing operations
8,725 1.8 % (1,041) (0.2) % 22,911 2.3 % 10,712 1.1 %
Interest expense, net 4,210 0.9 % 3,196 0.7 % 8,782 0.9 % 7,452 0.8 %
Income tax provision (benefit)
3,514 0.7 % (1,564) (0.3) % 10,893 1.1 % 5,869 0.6 %
Depreciation and amortization 22,536 4.6 % 22,692 5.0 % 45,499 4.6 % 45,913 4.9 %
EBITDA from continuing operations 38,985 8.0 % 23,283 5.2 % 88,085 8.8 % 69,946 7.5 %
Stock-based compensation expense (a)
5,306 1.1 % 4,750 1.1 % 12,335 1.2 % 7,164 0.8 %
Asset impairment (b)
- - % 3,519 0.8 % 502 0.1 % 3,975 0.4 %
Litigation settlement (c)
- - % - - % - - % 4,450 0.5 %
ERP and CRM implementation expenses (g)
1,846 0.4 % 2,141 0.5 % 4,161 0.4 % 2,657 0.3 %
Other (h)
31 0.0 % 2,690 0.6 % 5,154 0.5 % 4,925 0.5 %
Adjusted EBITDA from continuing operations / Adjusted EBITDA Margin from continuing operations $ 46,168 9.5 % $ 36,383 8.1 % $ 110,237 11.1 % $ 93,117 10.0 %
Note: Percentages reflect line item as a percentage of net revenue, adjusted for rounding.
Some of the percentage totals in the table above may not foot due to rounding differences.
Three Months Ended Six Months Ended
In thousands, except per share amounts June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024
Diluted EPS $ 0.11 $ (0.04) $ 0.29 $ 0.11
Diluted EPS from discontinued operations - (0.03) - (0.03)
Diluted EPS from continuing operations 0.11 (0.01) 0.29 0.14
Stock-based compensation expense (a)
0.07 0.06 0.15 0.09
Asset impairment(b)
- 0.04 0.01 0.05
Litigation settlement (c)
- - - 0.06
Amortization of acquisition intangibles (d)
0.00 0.00 0.00 0.01
Amortization of debt discount and deferred financing costs(e)
0.00 0.01 0.01 0.02
Derivative fair value adjustments(f)
- 0.04 - 0.07
ERP and CRM implementation expenses (g)
0.02 0.03 0.05 0.03
Other (h)
0.00 0.03 0.07 0.06
Tax effects (i)
(0.02) (0.05) (0.06) (0.09)
Adjusted Diluted EPS from continuing operations $ 0.18 $ 0.15 $ 0.52 $ 0.44
Weighted average diluted shares outstanding 80,057 78,575 79,658 78,774
(a)Non-cash charges related to stock-based compensation programs, which vary from period to period depending on the timing of awards and performance vesting conditions.
(b)Reflects write-off related to non-cash impairment charges of long-lived assets, primarily impairment of property, equipment and lease-related assets on closed or underperforming stores.
(c)Expenses associated with settlement of certain litigation.
(d)Amortization of the increase in carrying values of finite-lived intangible assets resulting from the application of purchase accounting following the acquisition of the Company by affiliates of KKR & Co. Inc.
(e)Amortization of deferred financing costs and other non-cash charges related to our debt. We adjust for amortization of deferred financing costs related to the 2025 Notes only when adjustment for these costs is not required in the calculation of diluted earnings per share under U.S. GAAP.
(f)The adjustments for the derivative fair value (gains) and losses have the effect of adjusting the (gain) or loss for changes in the fair value of derivative instruments and amortization of AOCL for derivatives not designated as accounting hedges. This results in reflecting derivative (gains) and losses within Adjusted Diluted EPS during the period the derivative is settled.
(g)Costs related to the Company's ERP and CRM implementation.
(h)Other adjustments include amounts that management believes are not representative of our operating performance (amounts in brackets represent reductions in Adjusted Operating Income, Adjusted Diluted EPS and Adjusted EBITDA), which are primarily related to shareholder activism costs of $2.1 million and severance and employee-related costs associated with organizational restructuring of $2.1 million for the six months ended June 28, 2025, costs associated with the digitization of paper-based records of $2.3 million and $4.1 million for the three and six months ended June 29, 2024, respectively, and other expenses and adjustments.
(i)Represents the income tax effect of the total adjustments at our combined statutory federal and state income tax rates, including tax expense (benefit) from stock-based compensation.
Liquidity and Capital Resources
Our primary cash needs are for inventory, payroll, store rent, advertising, capital expenditures associated with new stores and updating existing stores, as well as information and remote medicine technology and infrastructure, including our corporate office, distribution centers, and laboratories. When appropriate, the Company may utilize excess liquidity towards debt service requirements, including voluntary debt prepayments, or required interest and principal payments, if any, as well as repurchases of common stock or other securities, based on excess cash flows. The most significant components of our operating assets and liabilities are inventories, accounts receivable, prepaid expenses and other assets, accounts payable, deferred and unearned revenue and other payables and accrued expenses. We exercise prudence in our use of cash and closely monitor various items related to cash flow including, but not limited to, cash receipts, cash disbursements, payment terms and alternative sources of funding. We continue to be focused on these items in addition to other key measures we use to determine how our consolidated business and operating segments are performing. We believe that cash on hand, cash expected to be generated from operations and the availability of borrowings under our revolving credit loans in an aggregate principal amount of $300.0 million (the "Revolving Loans") will be sufficient to fund our working capital requirements, liquidity obligations, anticipated capital expenditures, and payments due under our existing debt for the next 12 months and thereafter for the foreseeable future. Depending on our liquidity levels, conditions in the capital markets and other factors, we may from time to time consider the prepayment, refinancing or issuance of debt, issuance of equity or other securities, the proceeds of which could provide additional liquidity for our operations, as well as modifications to our $247.6 million outstanding principal first lien term loan ("Term Loan A") where possible.
Our ability to maintain sufficient liquidity may be affected by numerous factors, many of which are outside of our control. We primarily fund our working capital needs using cash provided by operations. Our working capital requirements for inventory will increase as we continue to open additional stores.
During the three months ended June 28, 2025, we fully repaid the $84.8 million outstanding principal balance of the 2025 Notes using a combination of cash on hand and liquidity from our Revolving Loans.
As of June 28, 2025, we had $48.5 million in cash and cash equivalents, $15.0 million borrowings under our Revolving Loans with $278.6 million of remaining availability, which includes $6.4 million in outstanding letters of credit.
As of June 28, 2025, we had $247.6 million of Term Loan A outstanding under our credit agreement. We were in compliance with all covenants related to our debt as of June 28, 2025.
The following table summarizes cash flows provided by (used for) operating activities, investing activities and financing activities for the periods indicated:
Six Months Ended
In thousands June 28, 2025 June 29, 2024
Cash flows provided by (used for):
Operating activities $ 86,500 $ 75,448
Investing activities (32,924) (38,043)
Financing activities (78,825) (7,440)
Net change in cash, cash equivalents and restricted cash $ (25,249) $ 29,965
Net Cash Provided by Operating Activities
Cash flows provided by operating activities increased by $11.1 million to $86.5 million, during the six months ended June 28, 2025 from $75.4 million for the six months ended June 29, 2024 as a result of an increase in net income of $14.4 million and changes in net working capital and other assets and liabilities of $1.9 million. These were partially offset by a decrease in non-cash adjustments of $5.2 million primarily driven by changes in deferred income taxes and asset impairment.
Working capital was primarily impacted by year-over-year changes in other liabilities, accounts payable, other assets, inventory and trade receivables. Increases in other liabilities contributed $34.3 million in year-over-year cash, primarily due to increases in compensation-related and other accruals. Increases in accounts payable contributed $29.0 million in year-over-year cash due to working capital initiatives. These were partially offset by increases in other assets which used $28.1 million in year-over-year cash, primarily due to increased cloud-based software investments related to CRM and ERP. Increases in inventory used $23.5 million in year-over-year cash due to product mix initiatives. Increases in trade receivables used $20.7 million in year-over-year cash and were primarily driven by year-over-year changes in sales. Year-over-year cash changes in working capital were also impacted by the AC Lens wind down and the termination of the Walmart partnership in 2024 that did not recur in 2025.
Net Cash Used for Investing Activities
Net cash used for investing activities decreased by $5.1 million, to $32.9 million, during the six months ended June 28, 2025 from $38.0 million during the six months ended June 29, 2024. The year-over-year decrease was primarily due to lower store openings, partially offset by higher investments in doctor and other in-store equipment in existing stores.
Net Cash Used For Financing Activities
Net cash used for financing activities was $78.8 million during the six months ended June 28, 2025 as compared to $7.4 million during the six months ended June 29, 2024. The $71.4 million year-over-year increase was primarily due to the repayment of the 2025 Notes in the second quarter of 2025, partially offset by borrowings on our Revolving Loans of $15.0 million.
There were no material changes outside the ordinary course of business in our material cash requirements and commercial commitments from those reported in the 2024 Annual Report on Form 10-K.
We follow U.S. GAAP in making the determination as to whether to record an asset or liability related to our arrangements with third parties. Consistent with current accounting guidance, we do not record an asset or liability associated with long-term purchase, marketing and promotional commitments, or commitments to philanthropic endeavors. We have disclosed the amount of future commitments associated with these items in the 2024 Annual Report on Form 10-K. We are not a party to any other material off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Management has evaluated the accounting policies used in the preparation of the Company's unaudited condensed consolidated financial statements and related notes and believes those policies to be reasonable and appropriate. Certain of these accounting policies require the application of significant judgment by management in selecting appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on historical experience, trends in the industry, information provided by customers and information available from other outside sources, as appropriate. The most significant areas involving management judgments and estimates may be found in the 2024 Annual Report on Form 10-K, in the "Critical Accounting Policies and Estimates" section of "Management's Discussion and Analysis of Financial Condition and Results of Operations." There have been no material changes to our critical accounting policies as compared to the critical accounting policies described in the 2024 Annual Report on Form 10-K.
Adoption of New Accounting Pronouncements
There have been no material changes due to recently issued or adopted accounting standards since those disclosed in our 2024 Annual Report on Form 10-K.
National Vision Holdings Inc. published this content on August 07, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on August 07, 2025 at 12:34 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]