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

Reade Fahs: Yes. And, Sam, just to be clear because we used the word trade down in two different ways, I just want to clarify. One, we are seeing trade down of wealthier consumers to our business. And two, which I think may have been like where you were going, we are not seeing trade down within our frame categories to cheaper — to shifting to less expensive products. We’re finding that, say that, a percentage to take our entry offers about even to where it was before. So, those are the two aspects. The two ways we use the term trade down in the company. Hope that…

Sam Reid: Awesome. Yes, I was referring to the latter. So, that’s super helpful. And then, maybe just one quick follow-up. Embedded within your 2023 guidance, can you talk through the trajectory for insured versus uninsured consumers? Apologies if I missed, but will uninsured still be a drag on comps?

Reade Fahs: So, two things, we do believe that our managed care percentage will continue to grow as a percentage of our business, as it was growing consistently in the years before the pandemic, and then — and it has been growing recently as well. So, the growth in managed care consumers has been steady for years and should continue and we’re great with that. And I believe that on the other side of your question, in terms of the uninsured consumers, I think the answer to that is, to the extent to which we continue to retain the doctors we have, recruit more doctors and leverage things like remote, then we should be able to generate positive comps on the uninsured side of our business as well.

Sam Reid: That’s super helpful guys. Really appreciate it. Will pass it along.

Reade Fahs: Thank you, Sam.

Operator: One moment for our next question. Our next question comes from Adrienne Yih with Barclays. Your line is open.

Adrienne Yih: Great. Thank you very much. Reade, I guess, I’m kind of back on the trade down, the literal trade down where you’re seeing sort of the higher household income kind of coming in. So, I know, historically, I think you’ve talked about better cars in the parking lot, but I’m sure that there is some sort of credit card like zip code analysis that you’re doing. How do you know that’s happening? And is it happening at an accelerating rate? Relative to 2008 and 2009, how is this sort of trade down the speed, the duration, the strength of that trade down happening? And then, very quickly how is the — like the lack of optometrist capacity, is that the walk-in that come in want a doctor in the office and he is not there? Or is there a capacity to hold on to that consumer by giving them other options or coming in a later date or something like that? Can you retain that potential loss kind of (ph) in this interim period? Thanks so much.

Reade Fahs: Good. So, Adrienne, the great thing is — about this moment is it reminds us just how much more sophisticated we are versus ’08 and ’09 when, in truth, our assessment in ’08, ’09 was literally about store managers telling us that were nicer cars in the parking lot, okay, because we did not have data on that. We do now, as you say, we can say what percentage of our customers are coming in from over $100,000 income households and we have seen steady improvements in that since — why don’t we call it, since about this time last year, since about March, April last year when the economy started to get tighter. So, yes, that is very data-driven, and in ’08, ’09, it was not. In terms of capacity, so let me take you through the patient journey.