Good day, and thank you for standing by. Welcome to the Q1 2025 National Vision Holdings Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a Q&A session. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tamara Gonzalez. Please go ahead.

Thank you, and good morning, everyone. Welcome to National Vision's first quarter 2025 earnings call. Joining me on the call today are Reade Fahs, CEO; Alex Wilkes, President; and Chris Laden, CFO. Our earnings release issued this morning and the presentation accompanying our call are both available in the Investors section of our website, nationalvision.com. A replay of the audio webcast will be archived in the Investors section after the call. Before we begin, let me remind you that our earnings materials and today's presentation include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the release and our filings with the Securities and Exchange Commission. The release and today's presentation also include certain non-GAAP measures. Reconciliation of these measures is included in our release and the supplemental presentation. We would like to draw your attention to Slide 2 in today's presentation for additional information about forward-looking statements and non-GAAP measures. Further, please note that all financial measures in today's commentary are based on a continuing operations basis unless otherwise noted. As a reminder, National Vision provides investor presentations and supplemental materials for investor reference in the Investors section of our website. I will now turn the call over to Reade. Reade?

Thank you, Tamara, and good morning, everyone. Thank you for joining us today. Last week, Alex and I met with over 1,200 store managers, along with our field and optometric leadership, to ensure that they were all fully enrolled, engaged and aligned with our transformation strategies and tactics. As so many of the company's leaders were uniquely all in one place, it was an ideal time to share the news of our CEO succession plans live and in-person that as of August 1, Alex Wilkes will be succeeding me as CEO, and I will be transitioning to the role of Executive Chair. The Board, Alex and I have done a lot of research and had a lot of mindful conversations about best practices associated with CEO transition. That combined with Alex and my natural compatibility and chemistry has helped us to ensure a smooth and orderly transition. As such on this, my last earnings call after 23 years and 30 earnings calls as CEO, I'm pleased to be able to share that the strength of our first quarter results are further evidence that National Vision's transformation is working and should continue to be successful well into the future. Our entire team's disciplined approach to executing on our strategic initiatives was evident in the strong continued growth we saw this quarter in our three target customer cohorts: managed care, progressive, and outside Rx customers, leading to a return to mid-single digit comp performance and achieving solid bottom line performance. We are pleased with the ongoing momentum we've seen and are confident we are headed in the right direction. We believe that our value offering positions us well, particularly in this environment, and the results in the quarter reinforce our confidence in the long-term potential of our go-forward strategy and initiatives. Recall…

Thank you, Reade, and thank you for the partnership over these past nine months and going forward. I'll start with saying just how honored I am to be given the opportunity to lead National Vision during this important time of transformation. I've shared that I've always been impressed by the remarkable growth of National Vision by our special culture and by the strength of our brands. This was especially evident at our store manager, doctor and field leadership meeting last week. I'm privileged to lead the company as we define our next chapter of growth. I also recognize that I am in a unique position to continue to benefit from Reade's involvement in the business as Executive Chairman. These past few months, Reade and I have worked closely to prepare for this next phase of our transformation. With this in mind, I'd like to take a moment to give you a sense for how I'm thinking about National Vision and what my priorities will be as CEO. National Vision is uniquely positioned to capitalize on the growing need for value that we see across income demographics, particularly in this environment. National Vision has truly differentiated characteristics. Our fantastic optometry network provides patients with an eye exam experience that we believe is unmatched, including using industry-leading exam technology, both for in-store and remote exams. We are unique in how we go-to-market with our optometrist network and in the phenomenal quality of the exams they provide. When you pair this up with our scale and market recognition as a leading value provider, you have a winning combination. With these characteristics and the strength of the team we have in place, I'm confident in our ability to drive sales and improve our profitability going forward. Over the past two quarters, we've outlined specific…

Thank you, Alex, and good morning, everyone. I'm excited to be joining the team and talking with you today. I look forward to meeting many of you in the weeks to come. Over the past months, I've been immersed in the business and getting to know all of our team members. I've admired National Vision and its leadership position in the optical industry for some time, and I'm excited to be joining at such a pivotal time for the organization while also partnering once again with Alex. I am also grateful to be able to continue to work with Reade in his new capacity. Reade, I only have 29 earnings calls to go to catch up to your record with NVI. Let's jump right in. For reference, my comments today will focus on comparisons to the prior year period, unless otherwise noted. For the first quarter, net revenue increased 5.7% to $510 million, driven by adjusted comparable store sales growth of 5.5% and growth from new store sales, partially offset by a 150 basis point negative impact from the timing of unearned revenue. The spread between net revenue and adjusted comparable sales was impacted by the timing of store activity. During the quarter, we opened nine new America's Best stores while also executing our fleet optimization plan by closing three America's Best stores and nine Fred Meyer stores to end the quarter with a total of 1,237 stores, reflecting a 3% increase in store count year-over-year. Adjusted comparable store sales were driven by an increase in average ticket of 4.5%, supported by our transformation initiatives, including the pricing actions we've taken, modernization of our customer experience and enhanced selling techniques. The positive response to these initiatives from both store teams and customers occurred faster than our original estimates, resulting in…

Thank you, Alex and Chris. In summary, I hope you took away that we feel our Q1 results are further confirmation that the strategy the new team has developed and is in the early stages of implementing, involving targeting our most valuable segments, has put us back on the right course, a course we believe is both durable and sustainable. I hope you took away that although tariffs may end up being disruptive to the macro, that we have plans at the ready to mitigate their impact, and we believe we are among the best positioned in our category to handle them. I hope you took away that through a methodical study of best practices, coupled with mutual respect and natural chemistry between Alex and I that we are implementing a successful transition of leadership. I'm just so pleased that I'm transitioning the leadership to a person and a team who have proven they can get National Vision back on the sort of long-term growth trajectory that we enjoyed for so long. It feels great to be transitioning during such an upswing. As mentioned previously, this will be my last call as CEO. I would like to sincerely thank our analysts and the entire investment community. When we went public, I was told that you all with your probing questions would make us better, and you did just that. And for that, I'm appreciative. But mostly, I want to end the call by saying that it's been an honor to serve in this role with National Vision for the past 23 years. I leave proud of the millions of patients whose lives and vision have been saved and improved by the thousands of optometrists practicing alongside our stores. Optometry is such an admirable profession, and I'm pleased with the work we do to help enable them to provide the patient care they do. I leave proud of the tens of millions of customers who we have helped save money while improving their lives and self-images with great eyeglasses and contacts. I leave proud of the tens of thousands of associates who have found life-giving fulfillment working here and advanced up our career ladder, thus helping them to have happier, more successful lives. And I leave proud of the millions of ultra-low-income people in America and abroad who we have helped to see again philanthropically. I've witnessed the multiple ways this has improved their lives, their family's life and their communities. Over the years, I am delighted in saying that National Vision is a people business. We just happen to be selling eye exams, eyeglasses and contact lenses. Our people make the business successful and the people we serve and care for are what makes it life-giving for all of us. I move on in my new role, pleased and confident in the knowledge that all this and more will continue in National Vision's future chapters. And with that, I'll turn it over for questions.

Thank you. At this time, we'll conduct the question-and-answer session. [Operator Instructions] Our first question comes from Simeon Gutman with Morgan Stanley. Your line is now open.

Hey, good morning, everyone. Reade and Alex, congratulations. My first question is, if you assume -- sorry for the noise. If you assume no conversion degradation, like you said, like you're getting the ticket, is the run rate for what ticket can become in the next couple of quarters, is it -- are we seeing it, or it should accelerate given the mix changes that are still occurring? Thanks.

Yes, Simeon. Good morning, and thanks for the question. Thanks for the congratulations. Certainly, a big day for all of us at National Vision. Yes, look, we're super happy with the ticket acceleration that we've seen in both the fourth quarter and the first quarter. And logically, if you look at the things that we're going to do go forward, we said that pricing is an ongoing muscle, and we have not yet kind of achieved the point on the elasticity curve where we're seeing degradation in conversion. So we think there's runway. Ticket expansion has been fairly proliferated across the category over the last several years. We have not necessarily kept up with the market. Now I think we're leveraging our strength, and we're seeing positive response. Again, super proud of the fact that we're seeing ticket grow without degradation, not only in conversion but also in the NPS rate. So our customers are saying, guys, we appreciate what you're doing. We like the stuff that you're introducing, and we're seeing a high take rate on it. So yes, we absolutely think we have runway left.

And then as a follow-up, if you decompose the revenue growth between managed care and customer pay, are you now optimizing some of the managed care budgets that you just weren't fully optimizing before? Or is it customer pay side that's driving it as the customer has more choice and potentially higher price points to choose from?

Yes. I think it's actually a bit of both. So certainly, by introducing some more premium product, it's product that the managed care customer is hungry for. And introducing those products and those capabilities is actually raising the experience for the totality of our customer base. So we know that the managed care customer has a higher degree of spending power, and that's giving us the right to introduce some products that really benefits our customer base in totality, the progressive customer, the outside Rx customer, those three segments that we know have a higher resiliency in the market. And frankly, again, we're seeing great response there.

Okay. Good color. Good luck.

Thank you.

Thank you. Our next question comes from Zachary Fadem with Wells Fargo. Your line is now open.

Hey, good morning. Reade, first of all, it's been a pleasure; wishing you all the best. Alex and Chris, congrats to you. So first of all, as you think through all the drivers of your Q1 comp, particularly the nearly 6% at America's Best, first of all, could you walk us through the cadence in the quarter? And then, perhaps, any color on income demographics and whether the gap between your cash pay customers and managed care customers widened or narrowed in the quarter?

Yes. So thank you for that, Zach. So first of all, the quarter was a strong January, and then we had that two weeks in February that were particularly peculiar, which happened to be right before our call. And so on that, we said that made us cautious on our last call and then March came back strong. So we had a weird anomaly of two weeks in February that just happened to coincide with our last earnings call. And as we've suggested, healthy trends have continued into April. In terms of the demographic side, we did see a trade into us of higher income customers, so sort of more higher income customers and some of the lower income customers dropping out, which happens in tough economic times. We've seen that before, but it was very much offsetting and the key thing is we are providing great value to all. If they -- that's a -- this is the moment when people are seeking value, and that's who we are, and that's what our brand has always been known for.

Yes. On that note, we had always talked about, Reade, how the value segment of the industry was an outperformer in terms of growth relative to the rest of the industry. And as you think about all the opportunities across the business today, how would you compare industry growth rates across some of the new buckets like managed care, progressive, et cetera, relative to your core value offering?

So the key thing about our three segments, the managed care, the progressives, and the outside Rx is we are underdeveloped to the category in all of those. We do think that sort of the when we hit 40% last year, it was sort of a tipping point and thus having sort of designing things a bit more for that managed care customer made a lot of sense. And a lot of things Alex and the team are doing to bring in new products to make sure that people are getting their full benefits worth is helping us, and we see that continuing to help us going forward. So overall, one, yes, value should continue to be an ever more important trend as the macro gets more uncertain. And two, we have picked the right segments where we're underdeveloped and are showing great growth with them and great success.

Appreciate the time. Thanks so much.

Thank you. Our next question comes from Paul Lejuez with Citi. Your line is now open.

Hey everyone, this is Brandon Cheatham on for Paul. Reade, I'll add my congratulations. It's been great working with you. And Alex, also congratulations on your new role. I was wondering if you could share where your private label product is made and how much of your third-party product might be exposed to China tariffs? Depending on what happens, do you have the ability to switch away from third-party frames that might be made in China and carry something else? And then the product cost increases, you mentioned the $10 million to $15 million. How much of that is private label versus third-party frames?

Yes. So we said that less than 10% of our cost of goods is exposed to China. And we've done, I think, a really nice job over the last several years to reduce our reliance on China and move our supply chain around some of the rest of Asia to mitigate some of the risk that we're now seeing. So I think a great job by the team having the foresight to work on this over a number of years. In terms of the mix, that's something we really don't go into a huge degree of detail publicly. But we do have, as we've shown historically, we have flexibility to move, especially as it pertains to private label. That is where we have made the majority of our sourcing shifts over the last several years.

And as I said, we're pleased its several countries, which gives us a bit of diversity.

Okay. Got it. And then, yes, I know this might be hard to parse out, but the ticket performance during the quarter, how much of that is driven by some of the pricing actions you've taken, better frames going up that value ladder versus, like, the selling practices that you've implemented and being able to kind of cater more to that managed care customer? And if you could expand on where you think you are in getting your sales force up that curve of approaching that managed care customer with better selling practices?

Yes. Brandon, actually, we're quite pleased that all the actions that we put in place are contributing to the expansion of ticket. Approximately two-thirds of the ticket increase is attributable to the no regrets pricing decisions that we introduced in Q4 and Q1 that I talked about a bit more in detail last quarter. And the remaining third is coming from assortment changes and through the selling behaviors and the selling techniques that we're introducing at the store level. So again, we're super pleased that really, it's all of those things pulling in the right direction and delivering, frankly, as expected.

Appreciate it. Good luck.

Thank you. Our next question comes from Kate McShane with Goldman Sachs. Your line is now open.

Hi, good morning. Thanks for taking our question. I just wanted to clarify one thing on the tariff commentary. I think you had mentioned $10 million to $15 million in incremental product costs for the year as of today or May 1 tariffs. And I also think you said this is not in guidance. But is it right to think that this would be fully mitigated based on what your earlier comments were before?

Hey Kate, this is Chris Laden. Yes, confirming that your commentary is accurate. The tariff guidance is based off of the May 1 tariff policies that are in place and the impact for the balance of the year largely in the second half. And we do believe that we can offset the incremental costs there either with additional actions to increase average ticket as well as other cost mitigation efforts. And none of those are in guidance.

Okay. Thank you. And then unrelated, we wanted to ask about remote exams. We wondered if there was a way to quantify how remote exams did during the quarter or how they comped relative to the company comp. It sounds like profitability there, too, is still lower. So how much of a headwind is that from a mix standpoint? And does that improve at all as you grow that business?

Yes. Remote is now -- thank you, Kate, by the way. Remote is now sort of an ongoing part of how we do business. And in terms of percentage of exams, it was roughly the same as it was in Q4. And it is just part of how we do things now. We do think -- so what we're trying to communicate is we think we've got our coverage under control, and you're not going to be hearing us talk about being hurt by exam coverage. We have less than five stores are totally dark right now. So it's really a small number. We use remote as needed throughout the system. But what we're saying is we do think over time, there is going to be an opportunity for greater efficiency in the entire exam ecosystem. So that's just going to be improvement overall, but we think we've got the base coverage we need, and we think we can just make it more cost efficient over time as we leverage the various tools we have, live, remote, hybrid remote, and a few other things we're trying here and there.

Thank you.

Thank you. Our next question comes from Robert Ohmes with Bank of America. Your line is now open.

Hey, thanks for taking my question. Reade, congrats on just an unbelievable career in the industry in 23 years at National Vision. And I hope you have a great happy birthday next week. And we have the same birthday. That's why I always remember your birthday. And Chris and Alex, welcome. A couple of questions. Just the first question is just on the low-income consumer weakness, I mean, obviously, it's the position they're in, but are they going somewhere else, or are they just deferring? And in general, are you seeing any change in replacement or exam cycles across different demographics?

So a few things. One, Robbie, I will have a happy birthday because we're paying off our convertible loans on that day. So that will be a real nice milestone. I don't know what you're doing to celebrate, we're paying off $85 million in debt. That's great. And Robbie, thank you. You've been with us since the beginning in 2017, our very first roadshow in Salt Lake City, which was a really great and exciting time for us. So thank you for that. The low-income consumer is tighter and more strapped in this environment than ever more. We do believe that there are increasing trends in terms of the number of people who are insured in terms of total insured lives out there. So it's a shift into managed care part of a broader trend that actually is just another proof point as to why insured customers are a great target for us. And the managed care purchase cycle remains quite normal along the way. But again, even managed care customers are seeking value, and we provide great value for them, which is why we've had a steady ongoing increase there.

That's helpful. And then, maybe for Alex, can you just talk a little bit more about the recruitment and retention things you're doing and maybe weave into that how the optometrist cost outlook looks from here?

I've been sort of focused a bit on that. Retention is really healthy now. We do oftentimes find in when times of economic uncertainty, retention is healthy, and we also think we are doing a number of things just to make it an ever better place to practice optometry. Our recruitment is also quite healthy, and we're pleased with that, especially in the students arena. That's going very well. So both those are good along the way and costs are in line, nothing, and we aren't seeing increases there.

Terrific. Thank you.

Thank you. [Operator Instructions]. Our next question comes from Adrienne Yih from Barclays. Your line is now open.

Hi, this is Angus Kelleher on for Adrienne Yih. Congrats Reade, and Alex and Chris, congrats on your first joint call. My question is given the what -- given the testing of smaller format America's Best stores and learnings from the Sleep review, what early insights can you share about optimal store economics and potential changes to store growth trajectory and the penetration of remote-enabled capabilities at these smaller locations?

Yes. So we shared last call that we have a couple new prototype stores we're testing smaller square foot design. We look to understand the results of that better as the year plays out. One of the things that we are currently evaluating is our store design and our store kind of build in totality. So we have signed an agreement with a world-class design firm to help us review our store design, store footprint of the future. Again, that's a more forward-looking statement than something impacting '25. But certainly, our working hypothesis is that there is opportunity for a smaller store footprint than what we have historically built.

Got it. Great. Thanks. And then I think you touched on this in the prepared remarks, but what's been the feedback from doctors regarding the shift to target managed care customers? And how do you see this playing out over time and at scale?

Yes. I mean, I think our doctors are super excited about the direction that we're going in general. And the ability to see more managed care patients that also have an insurance benefit for that, that allows them to visit us more frequently. The managed care consumer purchase cycle is generally shorter than the cash pay consumer. They tend to be more compliant patients, which is something doctors love, right? I mean doctors love the idea of patients that believe in an annual eye exam. And the managed care plans are architected around that. So there's really great alignment between what the managed care providers are allowing in terms of benefit and the belief that doctors have of just how important an annual eye exam is.

Got it. Thank you.

Thank you. Our next question comes from Simeon Siegel with BMO. Your line is now open.

Hi, this is Jon Elias on for Simeon. Also adding our congratulations to Reade, Alex and Chris. Can you elaborate on the improved product margins from eyeglass frames and lenses? How much of the benefit was mix shift versus like-for-like improvements? And how do you think about product margins going forward?

Yes. It's really a combination of both. The ticket impact that we saw in the first quarter, as Alex said, about two-thirds overall was driven by price increases, about one-third mix. As we've introduced new products into the assortment and mix has shifted there a bit driving ticket, all those mix shifts have been at a minimal margin percentage neutral, if not accretive. So we feel good about the trajectory there. What we are going to be comping in the back half of this year is a one-time non-recurring event in Q4, which is why our outlook for the total year is flat. But we are seeing the benefit we expected through the first quarter and expect to see through the first half.

Great. And then for my follow-up, how are you thinking about advertising expense for the rest of the year?

Yes. So as previously shared, we're super excited about having a new agency of record to bring a fresh perspective on our creative platform. We generally aren't making any plans to reduce or accelerate our advertising investment. That being said, we are in the process of creating new creative, creating new campaigns, and we are certainly looking at ways to have our marketing investment be more efficient. We are strongly going to consider ways to evolve our media mix to become more efficient purchasers of media and point our marketing investment to the channels that are yielding the highest return. Historically, we haven't talked much about this, but we are also taking a harder look at our media mix model and really making decisions on how we're going to invest across linear, how we're going to invest across digital and search and continuously optimizing. Also from a channel mix perspective, we do know that once we have our CRM platform go live second half of the year, that's really going to make all of our marketing investment just work so much harder for us. So again, we feel great about what we're doing from a marketing strategy perspective. And as we evolve our media mix go forward, given that we're going to have stronger capabilities to help us drive consumer acquisition and loyalty.

Thanks for the color, and all the best.

Thank you. Our next question comes from Anthony Chukumba with Loop Capital. Your line is now open.

Good morning. Thanks for taking my questions. Congrats on the strong start to the year. And Alex and Chris, welcome to the party. And obviously, Reade, thank you for everything that you've done over the last 23 years for the company. So my first question, as I looked at your comps, obviously, the average ticket -- increase in average ticket, very encouraging. But I was pleasantly surprised by the increase in traffic, right, the 0.7% increase in traffic. What do you attribute that to? What was the driver there?

Yes. So I think it's a combination of things. I think it is really leaning into these customer segments that we spoke of. We're doing a better job being a place of consumption for the managed care customer, for the outside Rx customer and for the progressive customers. So seeing the growth in those segments is frankly contributing to that, that overall traffic or that overall customer count number. So really first step was around how do we become more relevant to that consumer that as we've talked about, we've been attracting that, that consumer anyway. But now that we're just starting some effort against them, we think we have a right to win. And I think that is exactly showing up in that 0.7% increase in traffic during which time, which we all know it's an uncertain time with a lot of macro headwinds. So Anthony, I really do appreciate you calling out on that. We're incredibly proud of that 0.7% customer increase, especially given the uncertainty that we live in today. Also last point here, our value offering and our value messaging resonates across customer types. And again, we think that that is something that in this particular moment matters a lot.

Got it. That's very helpful perspective. And then just one follow-up. I know in the past you sort of at least directionally talked about the difference between your managed vision care comp versus your cash pay comp. I was just wondering if you had any commentary in terms of first quarter.

Like I said before, the cash pay has not quite shown the resiliency of the other customer segments. Managed care continues to grow at or above the high-single digit range that we've talked about in the past and the cash pay consumer is certainly more strapped. But again, that is a bit of a dynamic, too, of the managed care ecosystem has grown year-over-year by a good margin as well. So yes, there is some degree of the cash pay consumer pool shrinking, the managed care pool increasing. But we still have seen even on the ticket side, the cash pay consumer has also traded up, and we're seeing some of the ticket benefit with our cash pay consumers as well.

That's helpful. Thank you.

Thank you. Our next question comes from Michael Lasser with UBS. Your line is now open.

Good morning. Thank you so much for taking my question and best of luck to everybody. You raised the midpoint of your top line guidance by $9 million. You raised your operating income outlook by $6 million. Is it reasonable and realistic for us to expect that type of flow-through moving forward? And at what point does National Vision need to make further investments, especially as it attracts this new customer base that arguably is going to have higher expectations that will need to be met? Thank you very much.

Hey, thanks for that question. Good morning. We did raise our guidance on AOI for the balance of the year. That was largely attributed to the performance we saw in the first quarter. The initiatives that were put in place in Q4, super happy to report that they actually were adopted both by our store teams and our consumers at a faster pace than we had initially projected. So a lot of what you're seeing in the AOI guidance increase is driven by that accelerated performance. I think you're absolutely right as we think through the balance of the year from a capital investment perspective, we're going to continue to contemplate what initiatives we have on the table that are going to drive the highest ROI and are certainly open as we introduce our new CRM activity in the second half to invest more if we're seeing the results drive out of it. On the flip side, right, we're operating in an uncertain environment. So we want to make sure that we're balancing the positive momentum we've seen with the uncertainty in the second half of the year.

My follow-up question is the pattern you described on how the quarter played out is not dissimilar to what many other retailers have experienced over the last few months. So the question is, is there any evidence that you're seeing that the consumer is trying to go in and get a pair of eyeglasses ahead of what could be a more inflationary environment as the tariffs take hold. And so -- and when would you expect to see that play out if indeed there is some pull forward?

It's a great question, and we look at that internally as well. I mean the short answer is no. We haven't seen a change in the customer purchase cycle, and we don't believe that our first quarter traffic change was driven by any pull forward of purchase cycle.

Got you. Thank you very much, and good luck.

Thank you.

Thank you. Our next question is from Dylan Carden with William Blair. Your line is now open.

Thanks. Kind of, I guess, a related question, the 5.5% comp in the first quarter relative to the full year guide, albeit raised, can you sort of speak to the conservatism that seems to be embedded over the next three quarters? Is that just the environment we're in, or is there something else that's sort of nuanced there?

No, that's exactly it. It's really largely attributable to just the uncertainty in the environment. Consumer confidence has been reported down month-over-month, and we just want to make sure that we are being prudent about our expectations for the second half given a lot of uncertainty from a macro perspective.

Fair. And the new store openings this year, are you closer to understanding maybe what the cadence would be go forward?

Yes. We've said that we believe about half of the stores will be opened in the first half of the year, half the new store to be in the second half. We typically see Q4 a little bit heavier in the second half, but we're still guiding to 30 to 35 new stores opening in the year.

Sorry, I was unclear. I meant sort of go forward in the sort of coming years, what you might open per year?

I apologize, misunderstanding your question. No, we don't have guidance yet in terms of 2026 forward in terms of new store openings.

Great. All right. Thank you.

Thank you. Our final question comes from Brian Tanquilut with Jefferies. Your line is now open.

Good morning. This is Meghan Holtz on for Brian. I'd like to reiterate our congratulations to Reade and Alex as well. Just for our first question, as the tariff situation likely put some pressure on some of your peers, do you think there's opportunity for you guys to capture some additional market share?

Yes. So we've said that we believe that we are very well-positioned in terms of the market from a tariff perspective. And again, I think that goes to the decisions that we've taken over a multi-year time horizon to shift our country of origin and country of sourcing and not be so heavily reliant on one market. So we're very, very thankful for that approach that we took. So yes, I mean, we absolutely think the work that we've done best positions us to potentially take advantage of the coming tariffs.

Thank you. And then just as a follow-up on the labor commentary. Some jobs data has pointed to a little bit of elevated wages in the mid-single digit range for optometry. Is that similar to the labor wage rate that you guys are seeing with internally?

Yes. I'll just a quick comment here. I don't think we have any excessive concerns about any wage rate compression on optometrists. And again, I'll reiterate something we shared earlier. Reade shared this. We're super happy with the fact that we've driven our dark stores down to really just a handful of stores. So we're always managing doctor pay and incentives. Of course, it's a balance to make sure that we're attracting the best doctors to join our company. And we think that strategy is working. And again, as evident by seeing the dark stores be reduced to a handful. Again, I think it speaks to the offering that we have to doctors that they can practice in a hybrid world, they can practice in a remote world, and they can practice in store, and we provide them great opportunities for career advancement. One thing, and I'll just share this -- and sorry, I'll share this on Reade's behalf. Last week when we were at our meeting with all of our Eyeglass World and Vista and Military and America's Best associates, Reade was able to share the team how great is it that in this organization, we have a doctor who is now the General Manager of one of our brands. So talk about a great place for optometrists to build their career. We allow them to practice in the mode that they want to practice, and we provide opportunities for them to sit at the executive table and to lead one of our biggest brands in the company. So I think it's just a testament to how we feel about doctors within our organization.

Thank you, and congrats on a good quarter.

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Reade Fahs for closing remarks.

Thank you, Hope, and thank you all for your ongoing support over the years. Alex, Chris and Tamara, we'll be back with you -- to you in August. Thank you all. Bye-bye.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.