National Vision Holdings, Inc. (NASDAQ:EYE) Q3 2022 Earnings Call Transcript

They’ve gotten accustomed to the change around it. Folks are trained and it’s a way of life.” In those stores, I think we’ve referred to double-digit productivity lifts in those older markets. And by the time we get to midyear next year, a lot of those will be older markets. So expecting to see good results out of that next year.

Anthony Chukumba: Got it. And then one tangentially related follow-up. What was the impetus for the, I guess, the $2 million retention bonus that you had mentioned in the fourth quarter?

Reade Fahs: Yes. So with sales down versus expectations for our store managers and field teams, they aren’t getting the bonuses they’ve been used to, and we wanted to say to them, “Hey, we are going to — we realize that this is a tough environment to work in, and we wanted to make up some of the loss to their compensation. We have traditionally had a heavy incentive compensation there.” And we wanted to make sure that our team knew that they were appreciated and invest in them in the long haul. This is we’re the game about retaining your account. And we are good at that and pleased with that, but we wanted to make sure people knew they were appreciated and recognized that there was a financial hit, and we want to make up a little bit of that. So a very cultural thing, in my opinion. It’s about long-term orientation and keeping yourself surrounded by the community of talent that you’ve assembled.

Operator: Our next question comes from the line of Paul Lejuez. Our next question comes from the line of Brandon Cheatham of Citi.

Brandon Cheatham: Hey, everyone. Brandon on for Paul. So I was just wondering, could we kind of dig in a little bit on how consumer behavior has changed, especially around your uninsured customer. Do you get a sense of how much time they’re extending between their last appointment and what is typical? I assume we get to a point where you just can’t put off that eye exam any longer. I was just wondering if you have any kind of insights there.

Reade Fahs: Yes. So again, this is such a key point around our business. Our consumers are very budget conscious, many living paycheck-to-paycheck. These are the people most affected by the inflation that we’re also so aware of. And as we like to reinforce our managed care customers for whom this is not as much their money because they’ve got insurance, we are comping positively amongst our managed care customers, but managed care is roughly 1/3 of our business. So for the nonmanaged care customers, it is a lot tighter on what we found in the last recession and we’re seeing this now also is our lowest income customers have to drop out of the category. They stop going out to restaurants, they thought be viewed the necessities.

They just don’t have the cash to do it, but we’ve started to see trade down. Our internal phrase is nicer cars in the parking lot. And that is what happens typically in the dynamics of our business and many other businesses that service a budget-conscious Americans during tough economic times.

Brandon Cheatham: Got it. What is the percentage of insured customers now versus what’s typical?

Reade Fahs: So what we said when we went public was that, that was about 5 years ago, we said 25% to 30% of our business came from insured customers. It has been growing at a faster rate. So we reference it as just over 1/3 of our customers.

Brandon Cheatham: Got it. Okay. And I was wondering if we could talk a little bit more about the remote medicine initiative. Just does that ultimately kind of solve the no-show problem. How many of your appointments now that customer ends up not showing up for the appointment? And where do you think that can ultimately like change your throughput from today to — if you eventually have remote medicine in most of your doors?