管理層發言
Good day, and thank you for standing by. Welcome to the Q2 2026 National Vision Holdings Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tamara Gonzalez, Head of Investor Relations. Please go ahead.
Thank you, and good morning, everyone. Welcome to National Vision's Second Quarter 2026 Earnings Call. Joining me on the call today are Alex Wilkes, CEO; and Chris Laden, CFO. Our earnings release issued this morning and the presentation accompanying our call are both available in the Investors section of our website, ir.nationalvision.com. A replay of the audio webcast will be archived in the Investors section after the call. Before we begin, let me remind you that our earnings materials and today's presentation include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the release and our filings with the Securities and Exchange Commission.
The release and today's presentation also includes certain non-GAAP measures. Reconciliation of these measures is included in our release and the supplemental presentation. We would like to draw your attention to Slide 2 in today's presentation for additional information about forward-looking statements and non-GAAP measures. As a reminder, National Vision provides investor presentations and supplemental materials for investor reference in the Investors section of our website. I will now turn the call over to Alex. Alex?
Thanks, Tamara, and good morning, everyone. Thank you for joining us today for our second quarter earnings call. The second quarter marked an important step forward for National Vision. We completed a significant technology milestone following the implementation of our e-commerce replatform. And most importantly, we delivered underlying results in line with our strategic framework, driving growth through underdeveloped customers, underpenetrated products and an enhanced customer experience, all while delivering meaningful improvement in profitability. This is the flywheel we are building: a stronger customer mix, better product attachment and a more connected experience and a store base that supports sustainable growth, margin expansion and increased profitability. For the quarter, net revenue grew 2.5% to $499 million and adjusted Comp Store sales increased 2.2%, in line with our expectations discussed on our last quarter call, with accelerated ticket growth helping to offset the temporary replatform impact and broader pressure on lower value transactions.
Our trend analysis suggests the replatform impacted total adjusted Comp Store sales by approximately 150 basis points. Excluding this impact, we estimate America's Best would have delivered slightly over 4% adjusted Comp Store sales growth, a result we are really proud of, especially in light of the current environment and represents another proof point that our strategy to build a more profitable and durable business is taking hold. We sustained momentum with higher-value customers, a key segment that we have deliberately focused our customer acquisition efforts against. This is reflected in our positive Comp growth with managed care driven by strength in both ticket and traffic. And in product categories that we have prioritized, anti-reflective coatings, Transitions lenses, polycarbonate lenses and premium progressive lenses each grew meaningfully this quarter. Importantly, our average ticket expansion is coming from the quality of sale and consumers raising their hands to opt into premium offerings versus simply passing price through to drive growth.
The bottom-line benefits of our strategy are evident in our profitability. Adjusted operating margin expanded 140 basis points to 6.3% in the quarter, and adjusted EPS increased to $0.25 per share from $0.18 in the prior year quarter. Perhaps the clearest evidence that our strategy to become a more profitable company is working is reflected in our updated outlook. Our strategic initiatives continue to perform as expected, and we're seeing the benefits in customer mix, premium product attachment and consequently in profitability. Given this, we are meaningfully increasing our adjusted operating income outlook. As the replatform disruption faded and we gained greater insight into underlying demand patterns, it became clear that the lower-value customer continues to somewhat defer their purchases, leading us to take a more measured view of the top end of our Comparable Store sales range. And this was particularly evident at the introductory bundled offer price point.
While we are never satisfied with losing transactions, those transactions are among the least profitable in our portfolio. We remain fully committed to serving these customers through our compelling entry-level offer and are confident they will continue to find great value offerings at our banners when the environment improves. At the same time, we're seeing our strategic initiatives perform as expected as we continue to strengthen higher-value customer transactions, premium attachment and ticket growth. We believe this growth in higher-value customers insulates us from the macro challenges so many other retailers are experiencing with their most budget-focused customers. This combination gives us increasing confidence in the quality of our growth and the earnings power of the business. Just as importantly, we're increasing our investment in marketing in the back half of the year to drive awareness at America's Best and Eyeglass World and support customer acquisition.
For example, this fall, America's Best will have a national presence through Fox College Football Saturdays as the sponsor of Fox Weather segments across Big Ten Tailgate, pre-game broadcast, all complemented by on-site activations and live broadcast integrations designed to increase awareness and engagement with the brand. This sort of high-profile media initiative is a first ever for National Vision. As I reflect on our performance, I think it is important to take a moment to explain why the e-commerce replatform was such a milestone achievement in the quarter. While it certainly created some short-term headwinds, it sets the organization up for growth and to capitalize on our long-term aspirations. We now have moved from a legacy digital experience to a modern commerce platform that gives us capabilities we have never had before. The new website platform significantly enhances the customer experience with faster, more intuitive shopping, a meaningful step-up in functionality from our previous platform.
This is not simply a technology upgrade. It is a foundational growth platform that we believe will drive higher conversion, deeper engagement, stronger retention and more personalized customer relationships for years to come. This modernization is also foundational to a world where we expect AI to play a greater role in consumer buying habits. More modern approaches to our website and unified commerce is one of the most significant opportunities in front of National Vision and one that can reshape how customers engage with us across the full optical journey. Each year, tens of millions of users interact with our brands online, primarily starting their journey by booking an eye exam. What an opportunity we have in front of us as we can marry this level of interaction with a best-in-class commercial experience and access to incredible eye care. That is what we are creating: a unified commerce platform supported by our employee doctor model that will connect the exam, prescription, product selection and purchase experience in a way that is more seamless, more personalized and more relevant to each consumer.
Unified commerce gives us the opportunity to turn millions of annual consumer interactions into more connected, higher-value relationships. We believe we are the first optical retailer able to combine online purchasing with in-store eye care at this scale, and we see that combination as a winning one and a key differentiator for our model going forward. Now let me turn to more near-term plans as we look to the second half of the year. First, we continue to see growth driven by durable ticket expansion as we have seen throughout this year. We're attracting premium frame brands that now view National Vision as a strong fit, reflecting the evolution of our customer base toward higher income cohorts and the momentum we're seeing in higher-value categories. Premium product attachment continued to improve in the second quarter, supported by stronger branded frame performance, growing adoption of premium branded lenses and superior materials, all key categories where we continue to close the gap against the overall market.
Earlier this year, we outlined a path to grow premium materials and anti-reflective attachment, and we are already demonstrating meaningful progress against those ambitions. Our expanded assortment of premium and performance frame brands include Versace, Burberry, Persol and Costa, and it's helping us attract a higher-value customer to support continued premiumization. Ray-Ban continued to be a strong contributor, supported by dedicated branded presentations and new frame launches. We're also advancing product innovation through initiatives such as the launch of Nikon Eyes, Stellest lenses and continued store segmentation. Nikon Eyes, our newest branded premium lens, is exceeding expectations with strong customer adoption, validating demand for higher value lens solutions. Early results show significant mix shift in frames to more premium products, generating significant average ticket lift.
Building on that momentum, our store segmentation initiative is helping us put the right brands, products and price points in the right stores. Store segmentation was rolled out in America's Best at the end of Q2, with plans on track for Eyeglass World by Q4. These efforts allow us to better tailor assortments by customer need, local demand, lifestyle and price point while supporting stronger premium attachment and more personalized engagement across our store base. We're also seeing strong momentum in newer categories that align with where consumer demand is headed. Smart Eyewear is one of the clearest examples. Our Smart Eyewear category continues to do very well, demonstrating our ability to be a clear leader in smart glasses with the strong customer adoption we are seeing with Ray-Ban Meta. At the beginning of the quarter, we expanded Ray-Ban Meta and added Oakley Meta smart glasses to each of our over 1,200 locations, and they are continuing to perform above expectations.
Although the number of frames still represent a small portion of our SKUs, Smart Eyewear is our fastest-turning branded category. A differentiator for National Vision is that we are at scale with this distribution of this rapidly emerging category. We can fit these devices with prescription lenses through our 2,000-plus licensed optometrists and then help customers apply their managed care benefits to make them more affordable. That combination of distribution and scale and clinical expertise puts us in a structurally advantaged position as the category continues to scale. For Q2, adjusted Comp Store sales at Eyeglass World increased to 0.4% as we continue to lay the foundation for the brand's next phase. The biggest opportunity at Eyeglass World is still ahead of us. And this quarter, we took three important steps towards that. First, brand repositioning. We've developed a new brand identity, and we're thrilled with where it's landed.
We'll be live online in just a couple of weeks, and our store teams are excited about what's ahead. This new identity gives us the opportunity to refresh our advertising and marketing message for the first time in several years in a way that's fully aligned with our lab, lens and frame strategy. Second, our lab operating model. During the quarter, we moved lens surfacing from stores into a larger centralized lab. Historically, doing this work in stores limited our ability to offer premium progressive lenses. This change gives us the capacity to expand that offering and better supports future growth. Third, segmentation and ticket growth. Store segmentation is on track to roll out at Eyeglass World by the fourth quarter, and we expect that together with the new brand and lab strategy to be a meaningful driver of ticket growth in the back half of the year. Similar to what we did with America's Best, we are applying a bold but disciplined approach unique to Eyeglass World that is focused on clear brand differentiation, stronger customer engagement and profitable growth.
We're really excited about what's ahead for Eyeglass World and look forward to sharing more in the coming weeks as we bring this evolution to market including a refreshed brand identity and updated marketing and messaging designed to better reflect the brand's differentiated position and growth opportunity. For a preview of where we're headed, I encourage you to look at our earnings presentation which highlights elements of the brand evolution currently underway. The key takeaway is that Eyeglass World is another example of how we're leveraging a repeatable transformation playbook to unlock value across our portfolio and drive durable long-term growth. To close, the second quarter was an important step forward and provided further evidence that our strategy is working. We're delivering against the priorities we outlined with measurable progress across our key growth vectors and meaningful runway still ahead.
The progress is visible in the business, stronger managed care momentum, higher premium attachment, continued ticket growth, a more modern e-commerce platform and meaningful operating margin expansion. As we enter the third quarter, while traffic trends with our lower-value transactions continue to be deferred, our America's Best comp is performing in line with our Q2 performance ex replatform. We are building a stronger National Vision, one with better customer engagement, more durable ticket growth, a healthier mix and a more modern platform for long-term growth. With that, I'll turn the call over to Chris to walk through our second quarter financial results and updated outlook in more detail. Chris?
Thank you, Alex, and good morning, everyone. Before I review our results, as a reminder, our remarks will include certain non-GAAP metrics, and I would refer you to today's press release for reconciliations of all non-GAAP financial measures to their most comparable GAAP financial measures. Our second quarter results represent another proof point that our strategic approach is working as we delivered adjusted operating margin expansion of 140 basis points in a period marked by traffic headwinds. Our deliberate shift toward higher-value customer mix and enhanced product attachment resulted in strong average ticket and operating profit growth despite traffic headwinds, particularly among lower-value transactions related to our entry-level bundle offer. This is precisely the flywheel we unpacked at our Investor Day last year: stronger customer mix, better product attachment and more durable profitability, and we're seeing the financial proof points clearly in our results.
Now turning to our results in more detail. For the second quarter, net revenue increased 2.5% with adjusted Comparable Store sales growth of 2.2% and a positive 0.8% impact from the timing of unearned revenue. We ended Q2 with a total of 1,281 stores reflecting 9 openings and 2 closures of America's Best stores during the period. Adjusted Comparable Store sales growth was driven by an increase in average ticket of 7.1%, offsetting a 4.9% decline in overall customer traffic. As Alex discussed, we had two clear dynamics impacting our traffic performance this quarter. First, the e-commerce replatform created temporary headwinds as we entered the quarter, impacting our total Q2 comp performance by approximately 150 basis points. As our search signals were reconnected and online bookings recovered to pre-replatform rates, we saw the underlying momentum of our business become clearer. The replatform was a significant technology milestone.
And while it created some near-term disruption, it sets up our organization for long-term growth and positions us to capitalize on our strategic aspirations in digital commerce. Second is the deliberate evolution in our customer mix to higher value, more profitable transactions, which was accelerated by current category trends that continue to see many lower-value transactions deferred. As a result, our growth in ticket has accelerated across our combined managed care, progressive and outside Rx customer cohort as well as with our cash-pay customer cohort. Now turning to profitability. Costs applicable to revenue increased approximately 4% compared to the prior year, and gross profit increased 1.5% or $4.4 million, driven by the strength in our average ticket. In line with our strategy, this did result in gross margin rate dilution given the impact of a mix shift towards higher value product offerings.
Adjusted SG&A was $236.2 million in the second quarter and as a percentage of revenue, leveraged 200 basis points. This performance reflects efficiencies in store labor, lower variable incentive compensation and a timing shift of marketing investments from Q2 into Q3 and in connection with the replatform that enabled about 50 basis points of leverage in the quarter. Adjusted operating income increased to $31.6 million compared to $23.8 million in the prior year period. Adjusted operating margin increased 140 basis points to 6.3% for the quarter. This expansion was driven by both our strong execution in our cost controls and improved profitability from our higher-value customer mix. Net interest expense was $3.3 million compared to $4.2 million in the prior year. This year-over-year decrease was primarily driven by a reduction in debt with the maturity of our $85 million in convertible notes in May of 2025 and a year-over-year reduction in SOFR rates.
Adjusted earnings per share was $0.25 per share in the second quarter, up from $0.18 per share last year. For the first half of fiscal 2026, we delivered adjusted Comparable Store sales growth of 3.4%, adjusted operating income margin expansion of 180 basis points, and nearly 37% growth in adjusted EPS compared to the prior year. Turning to our balance sheet. We ended the second quarter with a cash balance of $36 million and total liquidity of $329.3 million, including available capacity from our revolving credit facility. During Q2 2026, we repaid $3.3 million in long-term debt, bringing our total debt outstanding net of unamortized discounts to $237.7 million at the end of the quarter. For the trailing 12 months, our net debt to adjusted EBITDA ratio was approximately 0.9x. Year-to-date, we generated operating cash flow of $69.8 million and invested $39.8 million in capital expenditures, primarily driven by investments in new and existing stores and information technology.
During the second quarter, we repurchased approximately 1.2 million shares for $20 million, which was an opportunistic use of capital given the underlying performance of the business. As of July 2026, the share repurchase authorization had a remaining capacity of $30 million. Throughout the quarter, we continued our strategic investments in inventory to support our store segmentation strategy. As of the end of the quarter, inventory increased approximately 37% compared to the prior year. As Alex mentioned, we are deploying our store segmentation approach across the portfolio, and we've built our assortment to support tailored offerings by location, customer profile and lifestyle. Additionally, we're positioned with the right inventory to capitalize on the strong performance we're seeing in premium materials, branded frames and advanced lens technologies like Nikon Eyes. Looking forward, we expect the pace of inventory growth to moderate as we move through the rest of 2026 and reach optimal levels in support of our segmented store strategy.
Before I turn to our outlook, I wanted to highlight two more actions taken in the quarter. As Alex discussed, we are laying the foundation for Eyeglass World's next phase. During the quarter, we optimized our in-store lab capabilities at Eyeglass World by transitioning in-store lab surfacing to our centralized operations. This enables us to better reflect customer expectations on turnaround time, while expanding our capacity to offer more premium products at scale. As a result, we incurred approximately $3 million in noncash charges during the quarter and may incur up to an additional $1 million in charges related to the completion of this initiative. Separately, we applied for approximately $5 million in tariff refunds, which is expected to benefit costs applicable to revenue in the third quarter. We have incorporated these refunds into our outlook for the year. Now moving to our outlook.
Year-to-date progress on our strategic initiatives and the evolution of our customer mix is translating into a healthier and more profitable business. As such, we are raising our full year outlook for profitability while narrowing our top line expectations to reflect a more prudent view on traffic given the dynamics we've seen to date with lower-value transactions. For the full year, we now expect net revenue between $2.03 billion and $2.08 billion, supported by adjusted Comparable Store sales growth of 3% to 5%. This outlook reflects our Q3 quarter-to-date trends as well as the expectation that ticket expansion remains a strong and consistent driver of growth. In the second half, we expect initiatives, including Nikon Eyes, store segmentation and continued enhancements to our premium frame and lens assortments to contribute approximately 100 to 200 basis points to ticket growth, helping to further offset traffic headwinds.
Turning to profitability for 2026. We now expect adjusted operating income between $119 million and $139 million, which includes a range for depreciation and amortization of $92 million to $93 million. At the midpoint, we expect adjusted operating margin expansion of approximately 120 basis points for fiscal 2026 relative to 2025, excluding the 53rd week, driven primarily by SG&A leverage. With respect to quarterly cadence, we now expect Q3 and Q4 to reflect flat-to-modest adjusted operating margin expansion as we plan to reinvest our tariff refunds into incremental marketing initiatives in the back half of the year to support growth. Our full year guidance takes into account our multiyear cost savings plan, and we remain on track to realize approximately $10 million in annualized savings this year. Interest expense is expected to be between $11 million and $13 million. We expect our effective tax rate to be approximately 30%, excluding the impact of vesting on restricted stock units and stock option exercises.
Bringing this all together, we continue to expect adjusted diluted EPS to be between $0.90 and $1.09 per share, which assumes approximately 80.9 million weighted average diluted shares outstanding. We expect CapEx to be between $72 million and $76 million for fiscal 2026, which includes investments to open approximately 30 to 35 new America's Best and Eyeglass World stores this year, and excludes the expansion of our military locations completed at the end of the first quarter. As a reminder, our openings are weighted towards America's Best branded stores and based on current timing of openings, we are currently tracking towards the lower end of that range. We also expect to close approximately 15 stores as part of our ongoing fleet optimization efforts, resulting in net new store growth of approximately 15 to 20 stores. We expect store openings to have a relatively balanced cadence throughout the remainder of the year, while the remaining store closures will be more skewed to the third quarter.
In closing, I want to underscore the progress our entire organization is making to transform this business. We are executing a stronger, more disciplined and more profitable business model. At our expected midpoint, we will see adjusted operating income double from our 2024 AOI performance and we'll do so while continuing to provide customers and patients with best-in-class eye care and eyewear and a value offering that remains second to none. And with that, operator, we're now ready for questions.
分析師問答
And our first question comes from Simeon Siegel of Guggenheim.
So Alex, anything more you can share on the website replatforming — maybe address specifics of how it impacted the business negatively — and then maybe how and when you think we should be seeing the benefits from the initiative on the other side. Maybe just let us know how you calculated the related pressure that you had mentioned. And I think I caught it sounded like you suggested we may already be through the pressure with the quarter-to-date commentary. Maybe just flesh that out a little more. And then just clarifying maybe, Chris, just the slightly lower full year comp guidance, is that just reflecting the Q2 and for the year is held as you had previously expected? Or just anything else we should think about from a lingering impact?
Thanks, Simeon. How we looked at defining the 150 basis points of headwind that we got from the replatform is really related to our ingoing trend rate on new customer acquisition versus that of repeat customers and doing a test versus base versus control to see the delta in acquisition and then marry that with our cost per acquisition increasing from a marketing perspective. We saw that go on for about a six-week time period. It was a trough in new customer acquisition around the beginning parts of April through mid-May. Then we started to see sequential improvement both in new customer acquisition, and we saw our CPAs return to normal. That gives us a high degree of confidence that after the six weeks, we were through the replatform noise, our acquisition engine had turned back on to the degree that we wanted it to, and we started to see the consumer return sequentially as we stepped through the quarter and as we've moved into Q3.
We're already starting to see some of the benefits come through the replatform that are more tactical in nature. The intention with it is that we become a more forceful e-commerce participant in the optical category. Ultimately, that required us to build a much more flexible, bolder e-commerce platform that allows us to do that. Even in the near term, we're seeing key metrics such as completion rates improve. For example, consumers who come to our website and then purchase and schedule an exam — those completion rates are already trending in a positive direction. More consumers are visiting us, and those visits are turning into exams booked because we're making the booking process more seamless through a more joyful online experience. So we're starting to see early traction from the replatform in our exam funnel. The longer-term aspiration is that this sets us up for a more significant play in unified commerce.
Thanks, Alex, and thanks, Simeon. We're excited to be raising our adjusted operating income guide for the rest of the year despite some of the traffic headwinds we've seen year-to-date. On the narrowing of the top line and bringing down the top end of the comp guide by about one point, there are really two main scenarios. Number one, we feel confident about the ticket-driving initiatives that we have in place year-to-date and what we've got lined up in the back half of the year with the launch of store segmentation and Nikon Eyes growing as a percent of the platform. The open variable remains if and when the lower-value transaction consumers choose to reengage. We've seen a deferral of the purchase cycle and so we're being prudent on the top end of assumptions of when they might come back and begin shopping again.
Our next question comes from the line of Michael Lasser of UBS.
So if we add back the quantified impact from the platform transition, the e-commerce platform transition, traffic did still take a noticeable step down from Q1 to Q2. You mentioned several times about deferrals of purchases by the lower-income consumer. What evidence do you have that it's simply a result of the deferral cycle rather than either some impact from the elasticity of the price changes that have been made and/or other factors that are contributing to this? And at what point do you think traffic can turn positive in order to drive the growth from here?
Michael, great question. We're not actually seeing the deferral happen among low-income consumers specifically. We're seeing the deferral occur across the psychographic of value-seeking consumers, which is an important nuance. We're not seeing any meaningful deceleration at any income level across the income cohorts we track. Specifically, we are seeing lower participation and lower traffic in transaction points below the median — typically consumers that engage in our bundle offer only. Those consumers have decelerated, which is a little bit of a benefit to us because it's the least profitable consumer in our portfolio. That started to occur in a more accelerated basis toward mid-Q2. Our data to support that this is a deferral challenge versus a share challenge or consumers stepping out is that we've seen about a two-week increase in the purchase cycle between retained customers that participate in our business.
Two weeks doesn't sound like a lot, but it provides about a two-point headwind to traffic on a full year basis. So that's what we're tracking — months between purchase for consumers engaging with lower-value transactions. That being said, we have seen meaningful traffic increases for those customers who are purchasing above the median from a transaction value perspective. We triangulate around all of those data points, which gives us confidence in the business, and it's part of the reason that we saw the profit accretion in the quarter.
Got you. Very helpful. My follow-up question is on the full year profitability outlook. The midpoint of the adjusted operating income was up by $9 million or 7.5%. I think Chris mentioned that about $5 million of that came from the tariff refund that's expected in the third quarter. What drove the remainder of the increase? And to what degree is the shift in marketing that I think you said accounted for 50 basis points in Q2 fully going to be realized in Q3? Or is there a net benefit from some of the changes in marketing spend this year?
Thanks, Michael. From a marketing perspective, between what we deferred in Q2 into Q3 and beyond and the reinvestment we're planning, taking those tariff dollars and putting them toward customer acquisition, we actually expect to grow advertising spending in the second half versus our original plan. In terms of why adjusted operating income is growing in aggregate even with some of these reinvestments, the team has done a phenomenal job with cost execution and cost controls from the $10 million savings we announced heading into the year. We've also demonstrated better ability to execute, particularly on the store labor line. As demand softened in Q2, the operating team and our stores pivoted labor to match demand. That's the main driver of the adjusted operating income lift for the rest of the year.
Our next question comes from the line Jack Slevin of Jefferies.
Maybe to just take a step back. I imagine there's going to be a lot of focus on traffic, and I think you're giving helpful color on it. But thinking a little more structurally, you have some changes in the consumer base in your stores. If I think on a couple-of-year basis and look at gross margin performance and what you're doing on G&A, can you speak to whether this current composition of slightly slower traffic but still getting ticket — how long can this run paired with some of the G&A discipline to sustainably grow gross profit and earnings in the business?
This is one of the things we unpacked at our Investor Day last November: we have years of runway ahead in terms of ticket expansion through mix. Historically, we were laggards in taking price and under-indexed the category on underdeveloped products, premium lenses and premium frames. We are still at significant discount relative to the category measured in multiples, not percentage points in average transaction value. As we continue to skew more premium, particularly with the managed vision care customer who has more spending power through their plan, we have continued runway to take advantage of that for multiple years to come. We have an internal playbook for the next several years of actions to lean into that: introduction of premium lenses, training teams in stores on the benefits of anti-reflective and Transitions, and the introduction of store segmentation across our fleet where we're tailoring assortments to local demand. We think we're in early innings of executing these strategies to continue to drive premiumization within the category. Once we run these plays, we will still be an obvious destination for value based on our price architecture. That's how we are thinking about average transaction growth over the next several years.
Our next question comes from the line of Simeon Gutman of Morgan Stanley.
Hello. This is Skylar Tennant on for Simeon Gutman. On the raised EBIT guide, can you talk a bit more as to how much is left for the annualized SG&A cost savings? And how much more of a lever is that to pull into the back half?
We're really excited to say that we're fully annualizing the cost savings initiatives so they're in place. You can bank about $2.5 million a quarter coming out of that initiative. Our performance on cost controls and performance management has given us the ability to reinvest some of the dollars in the back half. We plan to reinvest more in marketing and customer acquisition, and we're also investing in items that will give us tailwinds into 2027 and beyond as part of our long-term strategic plan.
Okay, great. Stepping back, as you think about the right underlying algorithm for the business when initiatives like store segmentation and premium brand and lens launches are fully ramped, how much is ticket versus traffic getting to a healthier place?
Our long-term target of mid-single-digit comps and 50 to 150 basis points of profit accretion per year is still in place, and we remain committed to delivering that over the long term. In the near term through 2027, we expect outsized impact from ticket versus traffic. We anticipate reaccelerating store growth north of the recent cadence as we move into 2027 and 2028, and that will be a traffic generator in the later phases of the long-range plan. In the short to medium term, you'll see more ticket growth relative to traffic. The things we're putting in place — different marketing, investments in college football Saturdays, CRM investments — are traffic-driving in nature, but in the near term the upside from ticket is more pronounced because we have considerable headroom on product and mix in the short to medium term.
Our next question comes from the line of Dylan Carden of William Blair.
Let's stay on ticket here. Alex, can you speak to the split between like-for-like price increases versus mix shift for ticket increases both this quarter and over the last two to three years? Let's start there.
So far year-to-date, more than half of our ticket lift has come from mix shift. That's encouraging because these consumers are opting into more premium products. We still have over 40% of our frames priced under $99 and we still offer every prior lens option for consumers to choose. The ticket lift coming from mix is a result of store teams getting more comfortable with lifestyle selling and consumers opting into better products. Compared to prior years, where average ticket increase was predominantly price driven, our recent ticket growth has come more from mix, which we view as a healthier approach.
It's kind of interesting you're seeing traffic decline across income cohorts and value-seeking customers. Does the guide anticipate that could get worse — that the consumer more broadly sits out the market for a bit?
Yes. The primary variable in the range of our comp guide is exactly that: when does the value-seeking consumer come back into consideration? Do they reengage and accelerate back into the business, or do they take another step back? The 3% to 5% range reflects that variability.
Our next question comes from the line of Robert Ohmes from Bank of America.
Two questions. First, on the increased marketing for the back half, can you give more color on the focus? Is it more exam-focused, more frames-focused, or highlighting smart glasses? Second, on store segmentation testing, what have you seen so far and do you think different segments will have similar lifts?
From a media perspective, we're increasing spend in connected TV (digital TV), social and search. Our linear media plan is already comping positive to last year given the investment in the college football program, and the incremental investment will meaningfully increase digital spend across search, social and connected TV. Content will fall into three buckets: our anthemic Every Eye Deserves Better platform, and more specific content geared toward managed care, outside Rx and progressive consumers — the growth segments we're pursuing. We're also going to begin marketing directly to online purchase consumers, encouraging visits to americasbest.com to engage in virtual try-on and make online purchases. That's one of the reasons for the strategic investment in replatforming the e-commerce site. Regarding store segmentation, we've developed five segments for America's Best and three for Eyeglass World. The five segments for America's Best range from luxury to value with approximately 200 stores per segment. We expect higher average ticket lift in the luxury locations in early innings, and we're already seeing average frame purchases increase in each segment once the new assortments are layered in. The most accelerated results are where more premium SKUs were introduced. It's performing as designed, and we're pleased with the initial results after just a few weeks.
Our next question comes from the line of Zachary Fadem of Wells Fargo.
How do you think the optical category as a whole is performing this year? And how do you gauge your year-to-date performance in terms of market share with both managed care and cash pay?
From our channel checks, formal and informal, we believe we are holding our own or taking share in the market. The market is seeing similar dynamics: growth in managed care and deferrals in the cash-pay value-seeking segment. We're likely outperforming in managed care because we had room to improve product and price points to better serve that consumer. Overall, we believe we're holding our own or outperforming in key cohorts, especially managed care.
On Eyeglass World, it seems some changes bring the business model closer to America's Best. Do you agree with that? Strategically, what's the long-term value of having multiple brands rather than focusing on one brand?
We actually see Eyeglass World moving further apart from America's Best in its commercial offer, assortment and products. Eyeglass World will have an even more premium assortment once segmentation is complete in the back half of the year, and the refreshed brand identity launching online soon will position it more premium and more joyful — arguably more luxurious — in the optical market. We believe having a second, differentiated brand makes sense, especially once Eyeglass World has a more clearly differentiated experience.
Our next question comes from the line of Matt Koranda of ROTH Capital.
Regarding America's Best segmentation that rolled out at the end of Q2, you mentioned a ticket benefit from resegmentation. Can you unpack that a bit more — what you're seeing, is it more in the higher-end segments, and is that sustainable into 2027 and beyond?
We expect between the introduction of Nikon Eyes and segmentation about another 100 to 200 basis points of ticket growth over the next 12 months post-implementation. We think there's tailwind into 2027. Early innings show higher ticket growth in higher-tier segments, but even entry-level segments are seeing ticket growth. This demonstrates the power of providing frames tailored to local markets. As store associates become more accustomed to selling against the new assortments, benefits extend beyond the year of introduction; you get mechanical impact in year one and multi-year benefits as teams become acclimated.
Now that segmentation at America's Best is in place, does that put broader store expansion into play next year? You had previously talked about stepping on the gas in 2028; could this accelerate into late 2027?
It's a scenario we're contemplating. Given the strong cash flow we're generating and the profitability improvement at the store level from our target customers, new store growth is something we're thinking hard about. We continue to evaluate how best to deploy capital and will consider faster expansion if conditions and returns support it.
Our next question comes from the line of Adrienne Yih of Barclays.
This is Angus Kelleher on for Adrienne Yih. I wanted to ask about premium lens attachment. Anti-reflective was a major contributor to ticket growth last year. Is AR doing as much heavy lifting this year? Could you rank order the relative contribution from your key drivers and where you see the greatest remaining runway?
We're pleased with performance across all elements of lens premiumization. Internally we focus on lens quality of sale, and we're seeing anti-reflective, Transitions, multifocal and premium multifocal all trending positively. Anti-reflective attachment is trending in the mid-single-digit positive versus last year, beyond our expectations. In rank order of contribution to lens leadership: anti-reflective lenses first; premium progressives second; Transitions third. All three are contributing to our lens strategy and show substantial runway.
Our next question comes from the line of Paul Lejuez of Citi.
Curious what percent of your stores are actually seeing positive traffic. You mentioned five segments; how different are they from a traffic and ticket perspective? Also, any color on the Meta product — how much of a sales driver has it been, and what's next for smart glasses?
It's a bit early to tell traffic drivers by segment — we rolled segmentation out only five weeks ago. We are seeing traffic increases among consumers purchasing above the median transaction value, while decreases are concentrated among those engaging at the lower end of our commercial scale. Regarding product and smart eyewear, both frame premiumization and lens premiumization are driving the product mix. We're pleased consumers are opting into better products even though a significant portion of our assortment remains at entry-level price points. Ray-Ban Meta adoption has been strong, and we introduced an Oakley Meta frame as well. Our store associates are getting better at selling these products and consumer demand remains strong. Smart Eyewear is not yet material to overall sales but is among the most valuable average transaction types and customers purchasing them also opt into premium lenses. More players entering the category should accelerate its contribution over time.
When do you think Smart Eyewear will be material enough to move the dial from a top-line and ticket perspective?
I think once we see a few more players come into the category, we'll start to see a more material contribution. We remain optimistic about the category's long-term potential.
Our next question comes from the line of Anthony Chukumba of Loop Capital.
I'm going to start with more of a comment than a question. I was going through the presentation slides, and I saw the new Eyeglass World advertising, 'Change your glasses, change your world.' I'm happy to see that Mr. World will no longer be haunting my dreams. Anyway, sticking with Eyeglass World, clarification: you mentioned moving lens surfacing from stores to larger centralized labs. My understanding has always been part of the reason for in-store lens surfacing was to offer same-day eyeglasses. Will you still offer same-day eyeglasses in Eyeglass World?
Good question. In-store lab surfacing enabled same-day service but limited the ability to offer premium progressives and advanced coatings like Nikon Eyes and anti-reflective because those capabilities weren't available in-store. We're balancing same-day service versus offering more premium products. The market trend favors the more premium offering. That said, we will still offer same-day single-vision service in stores for customers needing a replacement pair or urgent single-vision needs. We are changing the lab operating model from doing full surfacing for progressives to doing finishing work for single vision in-store, which supports turnaround expectations and enables premium product offerings at scale.
One quick follow-up. You mentioned moving managed vision care penetration from around 40% to 50%. Any update on where you stand through the first half of this year?
We're proud of the progress growing managed care penetration. A headwind last year was that cash-pay was also comping positive. Because of the weakness in cash-pay in Q2, the mix of managed care grew as a part of the portfolio as managed care grew in both traffic and ticket. Strategies to grow our value proposition for managed care continue to be strong. The availability of Nikon Eyes in a Tier 4 lens and broader premium frames in stores will continue to make us a strong option for managed care consumers.
I'm showing no further questions at this time. I'll now turn it back to Alex Wilkes for closing remarks.
Great. Before I close, I want to thank all of our National Vision team members and our affiliated doctors. Q2 presented some challenges to the business, and I couldn't be prouder of the execution and focus this team has put forward every single day to take great care of our patients and customers. The work you're doing is helping to drive our results and our ongoing transformation. Thank you also to all of you who joined our call today and for the thoughtful questions. As always, we appreciate your dedication, time, focus and the thoughtfulness you bring to these calls. Thanks so much, everyone.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.