National Vision Exceeds Q2 Expectations; Lifts Guidance
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National Vision Exceeds Q2 Expectations; Lifts Guidance

National Vision Holdings, Inc. (EYE), an optical retail company in the U.S., reported better-than-expected second-quarter results aided by the rapid re-opening of its stores. Shares gained 2.9% in extended trading after closing 0.9% higher at $54.89 on August 12.

The company reported second-quarter adjusted earnings of $0.48 per share, up 217% year-over-year and much higher than analysts’ estimates of $0.22 per share.  

Net revenue climbed 111% to $549.49 million compared to the year-ago period and significantly outpaced the Street’s estimate of $482.51 million.

Moreover, compared to the prior-year period, comparable-store sales grew 99.1%, and the store count grew 5.5% to 1,249 stores. (See National Vision stock charts on TipRanks)

Commenting on the company’s performance, CEO Reade Fahs said, “We believe our continued operating momentum further demonstrates the benefit from the hastening of industry trends that favor our low-price model and strong store-level execution to meet heightened demand for affordable eyewear and eye care.”

Fahs added, “Given our consistent performance since re-opening last year and our safety-first approach, we are confident in our ability to navigate the challenging and dynamic environment and remain in a position of strength to drive long-term value for our stakeholders.”

Based on its solid quarterly performance and current economic environment, the company raised its guidance for the 52 weeks ending January 2022.

The company now forecasts net revenue and adjusted earnings to be in the range of $2.01 – $2.06 billion and $1.28 – $1.33 per share, respectively, while the consensus estimates for revenue and earnings are pegged at $2.01 billion and $1.10 per share, respectively.

In response to EYE’s solid performance, Wells Fargo analyst Zachary Fadem reiterated a Buy rating on the stock and lifted the price target to $60 (9.3% upside potential) from $55.

Fadem’s optimistic view on EYE is based on multiple factors, including a multi-pronged approach to growth and white-space opportunity, stability in comparables, and upside via long-term margin potential and improved capital efficiency.

The analyst believes that EYE’s beat-and-raise quarter has outperformed investors’ expectations and notes that the company is well-positioned to gain from structural tailwinds and increased post-pandemic share gains.

Overall, the stock has a Moderate Buy consensus rating based on 4 Buys and 2 Holds. The average National Vision price target of $54.83 implies that shares are fully valued at current levels. Shares have gained 52.6% over the past year.

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