National Vision Holdings, Inc. (NASDAQ:EYE) Q4 2022 Earnings Call Transcript

Melissa Rasmussen: Hi, Taji. Good morning. So, the midpoint of our guidance is we’re going out with larger ranges just due to the uncertainty around the environment. And the high end of our range assumes — as I laid out in our prepared comments, the high end of the range assumes that the macroeconomic backdrop has improved slightly, customer sentiment has improved slightly, and we see the continued improvement on the capacity constraints that we’ve been working through. And the low end of that range assumes that there is continued pressure on our core value-conscious consumer and we don’t — we are not as successful at managing that doctor capacity constraints that we are seeing. And the midpoint is just the math between the two.

Reade Fahs: And I’ll say, for the first two months of this year, we’ve been performing better than our original expectations. We — March is such an important part month for us, because it’s tax return season. Whenever our customer gets found money like from a tax return, it’s generally very good for us. So, we don’t want to get too excited by the first two months until we see how March plays out because that’s really defining for us in Q1.

Taji Phillips: Great. Thanks. And then, Reade, just referencing your commentary, I think I remember hearing you say that to make sure that you’re promoting flexibility for optometrists, right, you have to restrict hours to improve optometrist recruitment and retention. Just curious how do you balance that decision right between just a lack of availability in time from restricting hours and then also making sure that you’re able to effectively recruit more optometrists? Like, what does that flow through look like? Has that directly impacted your ability to recruit optometrists?

Reade Fahs: So, what — so it used to be, we were very, very strict and we said, “Hey, if you want to be a five-day doctor with us, these are the five-days you’re working, and you can take Wednesday off, and you can take Sunday off, but these are the five days. And I’m sorry, you have to work every Saturday.” In today’s optometric markets, given changing demographics and the like, we have found that was a turn-off to our recruitment efforts and also a factor in why people left us. So, now we have a menu of options of which days they are able to practice with us. And if its greater variety there, we do tend to — we’ve always paid additional for weekends and holidays and found that the resulting sales and flow through justify that incremental expense.

As doctors sort of trade off and say, I’d like to take some Saturdays off and maybe work Wednesday, instead of Saturday, we tried to fill in the Saturday, and there is expense related to that. It is expense that is fully justified and pays out with sales flow through. But that’s what we’re talking about here is offering options to shift what days you work around your lifestyle and your schedule and trying to fill in where there is customer demand if that’s what they trade-off. And this is part of flexibility that I think is a key part of the workforce going forward that we’re all going to be watching. And yes, since we started doing this, we are seeing both recruitment and retention benefits associated with it, that have been encouraging. This is something that we started testing in Q4 of last year and we made some — we said, wow, this is encouraging for us.

And we decided to put another chunk of stores into it later in the year. And then, early this year decided, hey, let’s just do it across America’s Best and we’re looking at similar options for other brands now. And frankly, the last few months of recruitment and retention as we’ve been announcing or since we’ve announced that has been the best in the past year and half or so.