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National Vision (EYE) Q1 Earnings Top Estimates, View Up

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·4 min read
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National Vision Holdings Inc. EYE delivered adjusted earnings per share (EPS) of 48 cents for the first quarter of 2021, a significant 72.8% rise from the prior-year quarter. The figure exceeded the Zacks Consensus Estimate by 45.5%.

The adjustment excludes the impact of certain non-recurring charges like asset impairment, amortization of acquisition intangibles and stock compensation expenses, among others.

GAAP EPS for the quarter was 48 cents as well compared with 12 cents in the year-earlier quarter.

Revenues in Detail

Revenues in the first quarter totaled $534.2 million, beating the Zacks Consensus Estimate by 3.1%. The top line improved 13.7% from the year-ago number. The company noted that net revenue growth was negatively impacted by 7.4% due to the timing of unearned revenues.

In the first quarter, comparable store sales growth was 18.2% whereas adjusted comparable store sales growth was 35.8%.

National Vision opened 25 new stores in first-quarter 2021 and closed one to reach 1,230 stores at the end of the quarter. Overall, store count grew 4.9% year over year.

Margins

Gross profit in the reported quarter was $309.5 million, up 23.2% from the prior-year quarter. Gross margin of 57.9% expanded 447 basis points (bps).

Meanwhile, selling, general and administrative expenses increased 15.4% to $223.6 million. Adjusted operating margin was 16.1%, implying a 386-bps expansion year over year.

Financial Position

National Vision exited the first quarter of 2021 with cash and cash equivalents of $453.7 million compared with $373.9 million at the end of the prior quarter.

National Vision Holdings, Inc. Price, Consensus and EPS Surprise

National Vision Holdings, Inc. Price, Consensus and EPS Surprise
National Vision Holdings, Inc. Price, Consensus and EPS Surprise

National Vision Holdings, Inc. price-consensus-eps-surprise-chart | National Vision Holdings, Inc. Quote

Cumulative net cash flow from operating activities at the end of the first quarter was $97.7 million compared with $86.1 million a year ago.

2021 Outlook Lifted

National Vision updated its 2021 guidance.

Net revenues are expected in the range of $1.975 - $2.025 billion (an improvement from the previously-announced view of $1.93-$1.98 billion). The Zacks Consensus Estimate for the same is currently pegged at $1.96 billion.

Adjusted EPS estimate guidance too has been raised to the band of $1.07-$1.12 (88-93 cents). The Zacks Consensus Estimate for the same is currently pegged at 90 cents.

Adjusted comparable store sales growth is expected to be within 16-19% (13-16%).

Our Take

National Vision reported better-than-expected first-quarter results. The company witnessed comparable growth on increased customer transaction in the quarter. According to the company, increased demand for low-cost eye exams, glasses and contact lenses contributed to making an outstanding first quarter. Expansion of both margins bodes well.

Despite the pandemic, based on the solid year-to-date momentum, the company has raised its full year guidance.

Zacks Rank and Key Picks

National Vision currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader medical space are Boston Scientific Corporation BSX, Illumina, Inc. ILMN and HCA Healthcare, Inc. HCA. All three stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific reported first-quarter 2021 adjusted EPS of 37 cents, beating the Zacks Consensus Estimate by 23.3%. Net revenues of $2.75 billion outpaced the consensus estimate by 5.3%.

Illumina reported first-quarter 2021 adjusted EPS of $1.89, beating the Zacks Consensus Estimate by 38.9%. Revenues of $1.09 billion outpaced the consensus estimate of $1.08 billion.

HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion exceeded the Zacks Consensus Estimate by 2.2%.

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