It has been about a month since the last earnings report for National Vision (EYE). Shares have lost about 6.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is National Vision due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

National Vision Q2 Earnings Beat Estimates, 2024 View Down

National Vision delivered an adjusted earnings per share of 15 cents in the second quarter of 2024 compared with 17 cents in the year-ago period. The figure surpassed the Zacks Consensus Estimate of 6 cents.

The GAAP loss from continuing operations was 1 cent per share compared to an EPS of 5 cents in the prior-year quarter.

Revenues in Detail

On Feb 23, 2024, National Vision completed the termination of the Walmart Management and Services Agreement and discontinued the former Legacy reportable segment. During the second quarter of 2024, the company wound down its remaining AC Lens operations, including the closure of its Ohio distribution center. Following this development, Walmart stores and AC Lens operations are now accounted for in discontinued operations.

As of Jun 29, 2024, the company’s operations consisted of one reportable segment, Owned & Host.

Net revenues from continuing operations in the second quarter totaled $451.7 million, which missed the Zacks Consensus Estimate by 2.8%.

The top line rose 4.6% from the year-ago quarter’s number, primarily driven by growth from new store sales and Adjusted Comparable Store Sales Growth, partially offset by the effect of converted and closed stores.

In the second quarter, comparable store sales growth was 2.2% year over year. Adjusted comparable store sales growth was 2.4%. National Vision opened 17 new stores and ended the period with 1,216 stores. Overall, the store count rose 5.6% year over year.

Margins

On a consolidated basis, the gross profit in the second quarter rose 2.7% from the prior-year quarter’s level to $258.2 million. Yet, the gross margin contracted 109 basis points (bps) due to a 7.4% rise in the cost of revenues (comprising products, services and plans).

SG&A expenses rose 3.8% year over year to $231.4 million. The adjusted operating margin was 5.9%, which contracted 68 bps year over year.

Financial Position

National Vision exited the second quarter with cash and cash equivalents of $150.1 million compared with $149.9 million at the end of 2023.