National Vision Holdings, Inc. and its consolidated subsidiaries (National Vision) operate as an optical retailer in the United States ('U.S.') and a leader in the attractive value segment of the U.S. optical retail industry.
The company conducts substantially all of its activities through its indirect, wholly-owned subsidiary, National Vision, Inc. (NVI), and NVI’s subsidiaries.
The company had one reportable segment as of December 28, 2024: its Owned & Host segment. The company’s Owned & Hos...
National Vision Holdings, Inc. and its consolidated subsidiaries (National Vision) operate as an optical retailer in the United States ('U.S.') and a leader in the attractive value segment of the U.S. optical retail industry.
The company conducts substantially all of its activities through its indirect, wholly-owned subsidiary, National Vision, Inc. (NVI), and NVI’s subsidiaries.
The company had one reportable segment as of December 28, 2024: its Owned & Host segment. The company’s Owned & Host segment includes its two owned brands, America’s Best Contacts and Eyeglasses (“America’s Best”) and Eyeglass World, as well as its Host brands, Vista Optical locations within select Fred Meyer stores and Vista Optical locations on select military bases.
The company delivers exceptional value and convenience to its customers, with attractive price points that provide value for a range of consumers. The company reaches its customers through a diverse portfolio of retail stores across four brands and multiple consumer websites.
Business
As one of the largest purchasers of eyeglass frames, eyeglass lenses and contact lenses in the U.S., the company also benefits from centralized procurement efforts and purchasing economies of scale.
America’s Best Brand
America’s Best strives to be the value leader in virtually every market in which it operates. Its signature offers of ‘two pairs of eyeglasses for $89.95, including a free eye exam,’ is typically priced significantly lower than the competition and provides customers with a wide selection of frame choices at this entry point. In America’s Best stores, vision care services are provided by optometrists employed either by the company or by independent professional corporations or similar entities. This model facilitates the brand’s bundled offer and its Eyecare Club programs, which offer two free eye exams per year for the duration of the membership plus a discount on contact lenses and eyeglasses. By leveraging the company’s efficient centralized laboratory network, America’s Best stores are able to minimize processing costs and drive significant economies of scale. These stores typically stock eyeglass frame imports from low-cost overseas manufacturers, higher-margin private label brands and discounted well-known frame brands. America’s Best stores are primarily located in high-traffic strip centers next to other value-focused retailers.
Eyeglass World Brand
Eyeglass World also offers a value price point for customers, with an opening offer of ‘two pairs of eyeglasses for $99.’ This brand is positioned as an eyeglass superstore with a broad selection of designer brands and price points and offers a highly personalized level of service. The company’s source eyeglass frames for its Eyeglass World stores from leading designer brands, private label manufacturers and low-cost overseas manufacturers. Eyeglass World locations offer eye exams, primarily from independent optometrists and optometrists employed by independent professional corporations or similar entities and have on-site laboratories that enable stores to quickly fulfill customer orders and make repairs on site. Lens orders that are not completed in store are completed by the company’s centralized laboratory network. These stores are primarily located in freestanding or in-line locations near high-foot-traffic shopping centers.
Host Brands
The company has two Host brands consisting of 53 Vista Optical locations on military bases and 29 Vista Optical locations within select Fred Meyer stores as of December 28, 2024. The company’s Host brands compete within the value segment of the U.S. optical retail industry. These brands combine a broad selection of products and attentive customer service with the convenience of one-stop shopping. These brands also utilize the company’s centralized laboratories and provide eye exams principally by independent optometrists in nearly all locations.
Omni-Channel and E-Commerce Platforms
The company offers its customers an engaging digital shopping experience through an established platform of omni-channel store websites, and the company’s dedicated e-commerce consumer website, DiscountContacts.com. The company’s omni-channel store websites augment its America’s Best, Eyeglass World and Vista Optical in military brands and provide a customer experience that extends across the company’s in-store, mobile and e-commerce channels. The company offers a range of services to customers, including eyeglass purchasing, online scheduling and appointment reminders, contact lens purchasing, ‘buy-in-store and ship-to-home’ capabilities and online frame browsing, among others. The company’s omni-channel offerings work in concert with these brands to enhance the overall quality of the customer experience.
In the aggregate, sales from the company’s omni-channel and e-commerce platforms, which include ‘buy-in-store and ship-to-home’ transactions, represented approximately 7.3% of net revenue in fiscal year 2024.
Segment
The company operates Owned & Host segment.
The company’s Owned & Host segment includes its two owned brands, America’s Best Contacts and Eyeglasses (‘America’s Best’) and Eyeglass World, as well as its Host brands, Vista Optical locations within select Fred Meyer stores and Vista Optical locations on select military bases.
The company’s owned brands consisted of various America’s Best Contacts and Eyeglasses (‘America’s Best’) retail stores and Eyeglass World retail stores. In America’s Best stores, vision care services are provided by optometrists employed by the company or by independent professional corporations or similar entities. America’s Best stores are primarily located in high-traffic strip centers next to value-focused retailers. Eyeglass World locations offer eye exams, provided primarily by independent optometrists and optometrists employed by independent professional corporations or similar entities, and have on-site optical laboratories that enable stores to quickly fulfill many customer orders and make repairs on site. Eyeglass World stores are primarily located in freestanding or in-line locations near high-foot-traffic shopping centers. The company’s Host brands consisted of 53 Vista Optical locations on select military bases and 29 Vista Optical locations within select Fred Meyer stores as of December 28, 2024. The company has strong, long-standing relationships with its Host partners and have maintained each partnership for over 20 years. These brands provide eye exams primarily by independent optometrists. All brands utilize the company’s centralized laboratories. This segment also includes sales from the company’s America’s Best, Eyeglass World, and Military omni-channel websites.
Products and Services
Within the company’s store brands, it primarily offers two products and one service: eyeglasses, contact lenses and eye exams. Nonetheless, the company’s diverse product portfolio encompasses many brand names and thousands of stock keeping units (‘SKUs’). Offerings include both brand name designers, like Ray-Ban, Coach and Calvin Klein, and private label options at attractive prices. The company’s brand-name frame offerings are manufactured by market leaders, and it partners with several overseas factories to direct source the company’s private label products. The company also offers a broad portfolio of lenses, including single vision and bifocal lenses, with a variety of treatments to enhance vision. Through one-on-one consultative-selling, the company’s sales associates have a number of opportunities to share information about value-added lenses, including thinner, higher-quality lenses and photochromatic options, which carry higher margins. As a result, a significant number of America’s Best customers and Eyeglass World customers who purchase eyeglasses choose upgraded lenses and/or frames instead of each brand’s signature or opening offer. In the company’s America’s Best and Eyeglass World stores, it also offers accessories and contact lenses from all major contact lens manufacturers, including the company’s own private label brands (Sofmed and Natural Eyes HydraWear, made by CooperVision). Collectively, the company’s broad product offerings deliver consistent financial results and reduces its reliance on any individual product, style or trend.
Eye exam services are provided by optometrists employed by the company, or by professional corporations or similar entities owned by eye care practitioners with whom it has contractual arrangements or by independent optometrists with whom the company has contracted. In addition, as part of the company’s efforts to provide quality, accessible eye care, it has deployed a telehealth solution in certain locations that allows optometrists working remotely to provide eye exam services to patients. Through this remote medicine platform, patients still visit the company’s stores for eye care services, but instead of seeing the optometrists in person, the patients relate to optometrists licensed in their state through video conferencing technology.
The optometrists work with trained optometric technicians and clinical assistants to collect preliminary data, and then the optometrists control the optometric equipment remotely to conduct the refractions and eye health examinations while communicating with the patients in real time via 2-way synchronous audio and visual connection. As of December 28, 2024, this technology has been enabled in over 730 of the company’s America’s Best locations. The company believes remote medicine not only helps provide quality, accessible eye care to more patients, but also helps address constraints in exam capacity from optometrist availability in store. As part of the rollout, the company has also invested in the transition to an electronic health record (‘HER’) platform in all America’s Best locations.
Memberships can be purchased in stores or on the company’s America’s Best website.
Sales and Marketing
The company developed its marketing strategy based on the in-depth knowledge the company has of its customers. The company’s brands are positioned to stand for low prices and great value, both of which resonate with its target consumers and leave a lasting impression that is distinct from the competition.
Video is a key channel for connecting with the company’s customers. A significant portion of America’s Best and Eyeglass World’s advertising investments are on awareness-driving video advertisements, network television and digital platforms, which the company leverages broadly across multiple stores in each market to gain a larger share of voice, and in turn, drive traffic and margins. The company continues to benefit from America’s Best national advertising campaigns, which help raise the company’s brand awareness in both new and existing markets. Additional advertising investments include digital media, search engine, direct mail, email and local store marketing. The company is continually tracking consumer media consumption behaviors and adjusting its media plan accordingly.
For the company’s Host brands, it relies on the company’s Host partners’ marketing initiatives to drive traffic into their stores. The company develops and executes highly targeted local marketing campaigns within stores to create awareness of its service and product offerings.
The company’s Customer Relationship Management (‘CRM’) system is used to collect customer demographic data. With this information and the third-party data that it uses to supplement the customer information, the company enhances its customer relationships with communications based on their individual vision needs and interests to help improve existing customer retention. In fiscal 2025, the company expects to launch a new customer experience platform to centrally manage all customer data, communications and analytics, which would replace its previous CRM system. The company expects this new technology will allow it to build dynamic, omnichannel customer journeys based on individual behaviors and preferences to maximize customer engagement and increase customer retention through personalized experiences across the company’s brands.
In addition to the company’s CRM program, digital advertising is a critical component of its media mix, as both programs generate a high rate of return. Potential customers gain awareness of its brands through paid and organic digital efforts via content, video and social media that lead them to the company’s websites.
Sourcing and Supplier Relationships
The company purchases its frame merchandise from a wide variety of vendors, with a limited number of vendors supplying the majority of the company’s eyeglass lenses and contact lenses. The company is a large customer for most of its suppliers and the company strives to form meaningful, long-lasting and mutually beneficial relationships with its vendors. The company has long-term contracts with certain of its key suppliers, including Essilor and CooperVision. Under its agreement with Essilor, Essilor has the sole and exclusive right to supply certain eyeglass lenses to the company. The company is collaborative in its vendor negotiations so as to develop a partnership with the company’s vendors, and in time, a sense of loyalty to National Vision. Each of the company’s top 10 vendors has been with it for approximately 10 years. The company’s focus on sourcing low-cost products, including well-known frame brands, secondary frame brands, direct import and private label frames and private label contact lenses. The company’s well-developed capability of direct-to-factory sourcing and importing of frames allows it to offer high-quality, low-priced frames while generating strong margins.
Optical Laboratories and Distribution Network
The company uses a highly efficient mix of four domestic, company-operated processing facilities and have an outsourcing relationship with an international, third-party facility. The company has lens processing capabilities in its geographically diverse, company-operated production facilities in Lawrenceville, Georgia; St. Cloud, Minnesota; Plano, Texas; and Salt Lake City, Utah. The company’s centralized optical laboratories handle all aspects of customizing eyeglass lenses, and have digital capabilities for grinding, coating and edging to customer prescription and eyeglass frame specifications. The company has developed a high-volume, low-cost lens processing model to provide approximately seven- to 10-day turnaround service through its domestic owned laboratories and the company’s international partner laboratories. This network was created through significant investment by the company and is leveraged across its portfolio of brands to provide efficiency and scale. The company’s route eyeglass orders to both its owned and outsourced laboratories through an automated decision tree that incorporates information on (i) the nature of the job; (ii) the technical capabilities of each laboratory; (iii) the capacity of each laboratory; (iv) the inventory at each laboratory; and (v) the cost of that job at each laboratory. This architecture is integrated with the point-of-sale system and enables the company to minimize its processing costs, while ensuring on-time deliveries. The processing system is designed such that the more eyeglasses the company sells, the more efficient the laboratories become, creating significant cost savings over time.
In addition, the company’s Eyeglass World stores are equipped with on-site laboratories, which typically process less complicated customer orders with same-day service. All lens orders that are not processed or completed in store are processed or completed by the company’s centralized laboratory network.
As of December 28, 2024, the company had a 118,000 square foot distribution center in Lawrenceville, Georgia. The company utilizes third-party carriers to transport products from the distribution center to customers and store locations. The company has transitioned the contact lens fulfillment and distribution previously handled by AC Lens to a third-party vendor. The company is subleasing the warehouse in Columbus, Ohio that was previously used in its AC Lens operations.
Managed Vision Care
The company’s managed care business relates to vision care programs and associated benefits provided by stand-alone vision insurance entities, healthcare plans and government programs. National Vision participates as a provider of both vision care and related vision product solutions, including eyeglasses and contact lenses, and primarily participates in private managed care programs. While the company’s managed care business has continued to grow, it is underpenetrated in the managed care market relative to the broader optical retail industry, and the company believes that this continues to represent a growth opportunity.
Through the company’s point-of-sale system and its back-office electronic data interchange (‘EDI’) capabilities, the company attempts to create a seamless transactional experience for its managed care customers and have increased training for the company’s store associates with this goal in mind. From time to time, vision care insurance payors may make changes to their EDI claim systems or experience system outages. Such changes or outages may requires the company to update its processes and could impacts the company’s ability to submit claims or to timely receive reimbursements from its managed care partners. As such, when asked, the company assisted a number of its larger vision care insurance payors to either implement or improve claims transmission processes via application programming interfaces (‘APIs’).
Competition
In the broader optical retail industry, the company competes with large national retailers such as LensCrafters, Pearle Vision and Visionworks, both in physical retail locations and online.
Seasonality
The company’s business is moderately seasonal in nature. Historically, the company’s business has realized a higher portion of net revenue, operating income and cash flows from operations in the first half of the year, and a lower portion of net revenue, operating income and cash flows from operations in the fourth fiscal quarter. The first half seasonality is attributable primarily to the timing of the company’s customers’ income tax refunds and annual health insurance program start/reset periods. The company believes that many customers in its target market are value-seeking consumers who rely on tax refunds to pay for eyewear and eye care. A delay in the issuance of tax refunds can accordingly have a timing impact on the company’s quarterly financial results in the first half of the year. Consumer behavior with respect to the utilization of tax refund proceeds is also subject to change.
With respect to the company’s fourth quarter results, compared to other retailers, its products and services are less likely to be included in consumers’ holiday spending budgets, therefore reducing spending on personal vision correction during the weeks preceding December 25th of each year. Additionally, although the period between December 25th and the end of the company’s fiscal year is typically a high-volume period, the net revenue associated with substantially all orders of prescription eyeglasses and contact lenses during that period is deferred until January due to the company’s policy of recognizing revenue only after the product has been accepted by the customer, further contributing to higher revenue results in the first half of the year.
Intellectual Property
The company owns a number of registered and common law trademarks and pending applications for trademark registrations in the U.S., primarily through its subsidiaries.
Government Regulation
In connection with the company’s sales of contact lenses, it must comply with the FCLCA, and its implementing regulations, including the Contact Lens Rule, promulgated by the Federal Trade Commission (‘FTC’), which establish a national uniform standard in the U.S. with regard to issuing, releasing and verifying contact lens prescriptions.
The company’s e-commerce business must comply with various federal and state laws, most notably the FCLCA. The company’s online business must also be registered in various states as a non-resident contact lens seller.
The company is engaged in managed vision care, both as a managed care entity and as a provider to managed care payors and insurers. In California, its subsidiary, FirstSight, a specialized health maintenance organization (‘HMO’), is subject to the managed care laws of the State of California and is licensed and comprehensively regulated by the California Department of Managed Health Care (the ‘DMHC’).
The company is subject to the requirements of Occupational Safety and Health Administration (‘OSHA’) and other federal and state agencies that address employee health, including from infectious diseases and safety.
As a health care provider and as a business associate to health care providers, the company is subject to federal and state laws governing privacy and security, including the Health Insurance Portability and Accountability Act of 1996 (‘HIPAA’) and its implementing regulations, such as the Privacy Rule, the Security Rule and the Breach Notification Rule.
The company’s participation in federal reimbursement programs, such as Medicare and Medicaid, subjects it to state and federal laws and regulations with respect to anti-kickback, false claims and physician self-referral, among other similar areas.
The company engages in certain manufacturing, repackaging and relabeling activities at its optical laboratories and in certain Eyeglass World stores, which subject the company to the FDA’s registration, listing and quality requirements. The company is required to register its centralized laboratories with the FDA.
The company sources a significant portion of its products from outside of the U.S. The Foreign Corrupt Practices Act (FCPA) and other similar anti-bribery and anti-kickback laws and regulations generally prohibit companies and their intermediaries from making improper payments or offering anything of value to non-U.S. officials for the purpose of obtaining or retaining business.
History
National Vision Holdings, Inc. was founded in 1990. The company was incorporated in Delaware in 2014.
