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| And so converting the 20 Eyeglass World stores over to America's Best helps us reduce field overhead, leverage national advertising, leverage optometrist deployment, reduce travel, it makes the state more profitable and the company more profitable |
| This strong top line performance combined with disciplined expense management enabled us to deliver better-than-expected adjusted operating income for the quarter and the year |
| National Vision finished the year quite strong, with top and bottom line results above our expectations for both the quarter and the year |
| I will say this, even in light of us only taking it to 50 more ABs this year and that's basically mostly new stores there will be a few EGWs in there, we will continue to reap the benefits of getting better and better at remote for those 500-plus that we've already rolled it out to |
| We continue to maintain a strong balance sheet and healthy cash flow to support our growth and capital allocation priorities |
| These results reflect ongoing strength within America's Best and sequential improvement in the Eyeglass World further supported by crisp execution from our teams and successful marketing campaigns at the end of the year |
| We believe through this work we are well positioned to drive long-term profitable growth, create value for shareholders and further our mission to make quality eye care and eyewear more affordable and accessible for all |
| For the year, total net revenue grew 6% and adjusted comparable store sales grew nearly 3%, resulting in adjusted earnings per share of $0.64 for fiscal 2023 |
| Underlying our top line performance in Q4 and full year was ongoing strength in our managed care business, as our traditional budget conscious customer base continued to feel the impact of inflation and other macro-related headwinds |
| The high end of our full year guidance assumes further strengthening in trends as the year progresses supported by continued strong performance in America's Best and improved performance in Eyeglass World, as well as improved consumer backdrop |
| At the midpoint of our guidance range, we expect to deliver an adjusted operating income margin in line with fiscal 2023, which came in ahead of expectations due to operational improvement in America's Best and disciplined expense management |
| We also expect gross margin expansion of approximately 200 basis points for the year |
| And we believe more balanced between our managed care and cash-pay customers will make our business more resilient overall |
| We're pleased that it's been progressing in the way it has |
| When we started the year, we set out to enhance the foundation of ongoing profitable growth and we have made great progress |
| Specifically, we delivered improved retention of optometrists, record optometrist recruitment and continued success of our remote exam initiatives |
| The rate throughout the year, first quarter is historically a very strong quarter for us |
| This was the second year of improvement in retention and a record year in recruiting more experienced and student hires |
| The overall guide takes into consideration several scenarios at the high end, which include improved consumer sentiment the productivity expansion and improvement in our Eyeglass World performance |
| This assumes benefits from the pricing actions, margin expansion as we exit the lower margin Walmart and AC Lens businesses and improved productivity |
| Throughout the fiscal year, we made solid progress in improving exam capacity and mitigating the impact of dark and dense stores on our results |
| Our strong year-end results were driven by crisp execution of our strategic initiatives and disciplined expense management, driving both top line improvement in our growth brands and better-than-expected adjusted operating income |
| As Reade said, we are pleased to have delivered fourth quarter and full year results that came in ahead of our expectations |
| Looking further ahead, we believe we are well positioned to achieve our mid-single-digit adjusted operating margin target in 2025 |
| And we expect to get to that point based upon the initiatives that we started last year and continue to accelerate into this year, which includes the improved recruiting and retention and the remote benefit that we've been experiencing to date |
| However, we are encouraged by the sequential improvement in revenues from January into February |
| Remote is now more fully embedded in our normal course of business and as we have discussed is an important tool in delivering improved results within the America's Best brand, as reflected in our 2023 performance |
| And finally, we're very proud that our philanthropic efforts helped 1.4 million people around the world to see better |
| Now to your other question about Eyeglass World in general again positive comps in Q4, sequential growth in Q4, so that's nice |
| And frankly, Dylan, we've seen some really nice improvements thus far this year that we think will aid our performance |
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| On the low end, we have the opposite of that as far as decreased consumer sentiment which may lead to demand issues and less traction in improving our Eyeglass World brands |
| That said, our guidance which Melissa will soon review takes into account a softer-than-expected start to 2024 |
| Adjusted diluted EPS was negative $0.02 per share in the fourth quarter compared to negative $0.08 per share in the prior year period |
| The low end of our guidance assumes a weaker consumer environment impacting demand trends and less success in improving Eyeglass World's performance through the operational changes Reade discussed |
| In addition, we expect adjusted SG&A to deleverage approximately 150 basis points, primarily driven by the year-over-year decline in revenue given the termination of Walmart business |
| Adjusted operating margin declined 100 basis points compared with the prior year period, driven primarily by the expected deleverage of optometrist-related costs and the normalization of our incentive compensation program |
| And is there -- typically I know last year the cash customer, the cash comp was a little bit under pressure |
| However, we have in fact lost that business which is a top line impact |
| And those California Eyeglass World stores were underperformers versus the average of the fleet |
| The slowdown in the rollout this year or the deployment is really a function of our comfort level of taking our remote model into specific states |
| And with the loss of the Walmart -- with the loss of the Walmart and AC Lens business, while the adjusted margins will improve, we do have some factors incorporated in there with the top line revenue loss |
| This expectation incorporates a 40 to 50 basis point drag from Walmart performance |
| We expect first quarter adjusted comparable store sales to be flat to slightly negative compared to the prior year |
| At the midpoint, it's still lower than the prior year |
| We'll have continued pressure based on that |
| I guess at the midpoint, there's still year-over-year decline or pressure |
| Now with that being said if the first quarter comes in on the lower end it is harder to leverage that cost structure that we have in place |
| We're still seeing those stores hit the overall profitability metrics that we need |
| We were a little more skewed to second half last year due to some timing delays, but we're expecting less of those this year |
| The 1Q comp guidance so I guess when you guys have looked at sort of correlation to tax refunds I assume -- I mean, they're down right? They're kind of double-digit |
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