National Vision to close 39 stores by FY26

National Vision (EYE) announced the results of its store fleet review. In August, the company announced it had identified an initial list of less than 5% of its total fleet that were not meeting its profitability thresholds and said it was considering potential actions for those underperforming stores. The company plans to take action on 43 stores, including closing 39 stores by the end of fiscal 2026 and converting four Eyeglass World stores to America’s Best by the end of fiscal 2024. The company expects that closing these stores will improve the overall health of the core business. Further, the company announced that in FY25 it will temporarily moderate new store openings to 30-35 new stores, after which time the company expects to return to its more recent store opening cadence as its initiatives begin to take hold. The combination of these actions is expected to provide the company increased flexibility to invest in existing operations and deploy capital to initiatives that will drive increased revenue and improved profitability. The company has significant whitespace opportunity for continued growth. As detailed earlier this year, the total whitespace opportunity is believed to be at least 2,500 stores, more than double the existing store count across its brands. the company plans to close 39 stores by the end of FY26. Additionally, the company will convert four Eyeglass World stores to America’s Best stores during fiscal 2024. Going forward, the company will continue to closely monitor store performance and store profitability as part of its ongoing real estate portfolio strategy to maximize returns. The company expects the store closures described above to deliver approximately $4M of annualized adjusted EBITDA improvement by the end of FY26, of which approximately $2M to $3M is expected by the end of fiscal 2025. These closures are expected to negatively impact revenue by $11M to $13M in FY25 and $2M to $3M in FY26. The company recorded approximately $1M of one-time, non-recurring exit charges during the third quarter of 2024 related to lease terminations, severance, and other charges associated with the fiscal 2024 and fiscal 2025 closures. In addition, the company recorded noncash impairment charges of approximately $14M in the third quarter of 2024. Approximately $11M was related to the Fred Meyer intangible asset and the remaining $3M was for tangible long-lived assets primarily related to the portfolio review.