Shares of National Vision Holdings Inc. (EYE) witnessed a significant drop of over 11% during the extended trading session on Wednesday. The optical retailer, known for operating brands such as America’s Best and Eyeglass World, announced that its contract with Walmart Inc. (WMT) will not be renewed after it expires in February. This includes various services provided to Walmart, such as supplying and operating “vision centers” in select stores, distributing contact lenses and related services, and offering optometry services in certain Walmart locations in California.
Although the decision caught National Vision by surprise, Chief Executive Reade Fahs expressed gratitude for the partnership with Walmart that has played a crucial role in the company’s growth over the past three decades. Fahs stated, “While this decision was not expected, we look forward to embarking on a new chapter as a more streamlined company, focused on delivering value to our stakeholders through our mission of making eyewear and eye care more affordable and accessible.”
The specifics behind Walmart’s decision not to renew the contract were not disclosed by National Vision. However, alongside this announcement, the company unveiled its preliminary second-quarter earnings. These figures showcased an adjusted EPS of 17 cents per share, with sales totaling $525 million, marking a 3% increase compared to the same period last year. Despite falling just short of FactSet’s projected adjusted EPS of 15 cents per share, National Vision’s positive sales growth is promising.
As National Vision adjusts to the end of its partnership with Walmart, the company remains committed to its goal of making eyewear and eye care more accessible and affordable. This development marks a turning point for the optical retailer, one that will shape its future endeavors within the industry.