Optical retailer National Vision (NYSE:EYE) missed analysts' expectations in Q1 CY2024, with revenue down 3.5% year on year to $542.5 million. On the other hand, the company's outlook for the full year was close to analysts' estimates with revenue guided to $1.99 billion at the midpoint. It made a non-GAAP profit of $0.30 per share, down from its profit of $0.31 per share in the same quarter last year.

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“We delivered first quarter results in line with our expectations, reflecting a sequential improvement in the second half of the period. While weather and a slower start to the tax refund season at the beginning of the quarter adversely impacted sales, our teams remained focused on the areas of our business that we can control and continued to make progress on our strategic initiatives. We built upon the actions we put in place to improve doctor recruitment and retention, and we furthered our rollout of remote technology and electronic health records in our stores. Thanks to our team’s dedication and agility, we delivered increased revenues and profitability on a continuing basis despite operating in what remains a challenging macroeconomic environment. We are committed to continuing to build our foundation for growth to drive shareholder value,” said Reade Fahs, National Vision’s CEO.

Operating under multiple brands, National Vision (NYSE:EYE) sells optical products such as eyeglasses and provides optical services such as eye exams.

Specialty Retail

Some retailers try to sell everything under the sun, while others—appropriately called Specialty Retailers—focus on selling a narrow category and aiming to be exceptional at it. Whether it’s eyeglasses, sporting goods, or beauty and cosmetics, these stores win with depth of product in their category as well as in-store expertise and guidance for shoppers who need it. E-commerce competition exists and waning retail foot traffic impacts these retailers, but the magnitude of the headwinds depends on what they sell and what extra value they provide in their stores.

Sales Growth

National Vision is a small retailer, which sometimes brings disadvantages compared to larger competitors that benefit from economies of scale.

As you can see below, the company's annualized revenue growth rate of 5.8% over the last five years was weak , but to its credit, it opened new stores and expanded its reach.

This quarter, National Vision missed Wall Street's estimates and reported a rather uninspiring 3.5% year-on-year revenue decline, generating $542.5 million in revenue. Looking ahead, Wall Street expects revenue to decline 6% over the next 12 months, a deceleration from this quarter.

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Same-Store Sales

National Vision's demand has been shrinking over the last eight quarters, and on average, its same-store sales have declined by 1.2% year on year. This performance is quite concerning and the company should reconsider its strategy before investing its precious capital into new store buildouts.

In the latest quarter, National Vision's same-store sales rose 1.4% year on year. This performance was more or less in line with the same quarter last year.

Key Takeaways from National Vision's Q1 Results

It was good to see National Vision beat analysts' EPS expectations this quarter despite a revenue miss. On the other hand, its full-year earnings forecast missed analysts' expectations. Overall, the results could have been better. The company is down 1% on the results and currently trades at $17.69 per share.

National Vision may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.