National Vision Holdings, Inc.

Thank you for standing by, and welcome to National Vision's fourth quarter 2021 earnings conference call. At this time, all participants are on a listen-only mode. After the speakers' presentations, there will be a question-and-answer session. To ask a question at that time, please press star then 1 on your touch-tone telephone. As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Mr. David Mann, Vice President of Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. Welcome to National Vision's fourth quarter 2021 earnings call. Joining me on the call today are Reid Fahs, Chief Executive Officer, and Patrick Moore, Chief Financial Officer. Our earnings release issued this morning and the presentation which will be referenced during the call are both available on the Investors section of our website, nationalvision.com, and a replay of the audio webcast will be archived on the Investors page after the call. Before we begin, let me remind you, that our earnings materials in 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 in our filings with the Securities and Exchange Commission. The release in today's presentation also includes certain non-GAAP measures. Reconciliation of these measures are included in our release and the supplemental presentation. We also would like to draw your attention to slide two in today's presentation for additional information about forward-looking statements and non-GAAP measures. As a reminder, National Vision expects to provide certain supplemental materials or presentations for investor reference on the investor section of our website. Now, let me turn the call over to Reed.

Thank you, David, and good morning, everyone. I'd like to thank you all for joining us today. I hope you're all staying safe and healthy. I'd like to begin by sharing my heartfelt appreciation to the entire National Vision team for their continued resilience, hard work, and their commitment to patient care and customer service during these ever-changing times. I've said it repeatedly over the past two years, and I'll say it again, I am just so impressed with this team. Turning to slide four. Net revenue in 2021 exceeded $2 billion for the first year ever with record adjusted EPS of $1.48. We are confident that we continue to outperform the industry in 2021 and believe that this should continue. We increased our white space target for America's Best by 300 stores in 2021 and see a long runway for expansion for both our growth brands. We invested in and progressed key strategic initiatives including the improvement of iGlass World's ROIC and the ongoing digitization of America's best stores with remote medicine and electronic health records, which we expect to continue driving growth in 2022 and beyond. We generated record operating cash flow, paid down $167 million in debt, and returned nearly $70 million to stockholders through share repurchases. We released our first corporate responsibility report and greenhouse gas inventory, Our corporate responsibility efforts have been well-received by investors and other stakeholders and have been reflected in improved ESG ratings. All in all, 2021 was a record-setting year on a variety of dimensions. Turning to slide five and a summary of Q4 results, as noted in today's press release, our results are being compared to the fourth quarter of fiscal 2019, just as we did in our Q2 and Q3 releases. Due to the significant recovery following the reopening of our stores in 2020, we believe that 2019 is the most helpful basis for comparison. We're pleased to have delivered another quarter of consistent performance in Q4. Net revenue increased nearly 19% over the fourth quarter of 2019, with adjusted comparable store sales growth of 11.5% over the same period. The top-line strength continues to be led by our growth brands, America's Best and Eyeglass World. We opened 16 new stores during the quarter and ended with 1,278 locations. Adjusted operating income increased approximately 2%, and adjusted EPS increased 35% to 13 cents. Overall, our fourth quarter results reflect the ongoing strength and durability of our business model. In a few minutes, Patrick will take you through our Q4 results and 2022 outlook in more detail. Turning to slide six. We're proud of the strength and resilience that our business has demonstrated both during the pandemic chapter and over the last two decades. Our business performance has been consistent across strong and weak economic periods. Our performance is aided by ongoing positive trends such as an aging population, migration from mall shopping, and increased eye strain from such things as increased screen usage. We expect these trends, combined with other macro environmental factors, to continue to favor our value positioning and help us to drive market share gains. The optical industry remains highly fragmented, and we're confident that we have a significant opportunity to continue to grow our market share. In the fourth quarter, we were pleased with our positive comp performance versus 2020, as we lapped the difficult comparison from last year when we had the tailwinds from pent-up demand from store closures, the benefit of government stimulus, and an elevated average ticket. We're encouraged by the fact that our average ticket has stabilized at a higher level than we expected, primarily helped by 2021 pricing actions and successful product introductions like blue light lenses. With the current inflationary environment, we expect our target customer will more than ever seek out value offerings. We completed an evaluation of our pricing and implemented some peripheral pricing actions in Q4 that we believe are appropriate while continuing to save our customers money versus competitors. As noted in today's earnings release, short-term macro headwinds have affected store operations and customer traffic thus far in 2022. The Omicron variant impacted our ability to staff stores based on optometrists and associate illness. This, coupled with unusually severe winter weather, has led to a slower than anticipated start to 2022 for us, and we believe this slowdown has been felt in most of the category during the optical industry's typically high seasonality period. Taking a step back from the volatility thus far in Q1, we believe our foundation is solid and are confident in the health of our business model. As we've been saying for years, this is a benefit of being a low-cost provider of a medical necessity. Shifting to slide seven, as we move into 2022, we are continuing to execute on our core growth initiatives and investments that we expect will position us to continue to build market share. New stores remain a primary driver for growth, and we're fortunate to have two attractive growth engines in America's Best and Eyeglass World. Both brands delivered strong sales performance last year, especially Eyeglass World. As a result, we're increasing our annual growth target and intend to open at least 80 stores in 2022 with a plan to double the unit growth of Eyeglass World. Our real estate team has developed a solid pipeline of specific locations to support this plan. Let's talk for a minute about iGlassWorld. We're especially excited about iGlassWorld's runway for growth and improved return profile. The brand is at an inflection point. Our investments in people and processes have paid off with a strong momentum experience throughout the pandemic. iGlassWorld has really hit its stride with strong performance week in and week out since early 2020. On these calls, you've repeatedly heard me say that we are always seeking more optometrists. Optometrists play a key role in our company's ongoing success because the optical customer journey typically begins with an eye exam. That's why we've always been so focused on making sure we are offering great places for optometrists to practice and thereby increase exam accessibility for our patients. This means continuing to invest in programs that attract optometrists and maintain high retention rates. In 2021, new initiatives related to optometrist compensation and recruiting were implemented, and thus far we've been encouraged with the early results of these initiatives. These initiatives will continue to be a focus area in 2022. Another key focus to ensure we can serve ever-increasing patient demand has been our remote medicine pilots. We've spent significant time working to develop these offerings and are very pleased with the progress. Given the success of these pilots, I'm pleased to report remote exams are currently offered in over 100 locations. In 2022, we plan to expand the remote medicine offering and expect to have a total of at least 200 store locations by year-end. Simply put, we believe everybody wins with remote medicine. Optometrists like the flexibility that it provides, while patients benefit from the increased exam availability. As a result, we're excited by the role that remote medicine can play in serving more patients across both geography and time. With the remote medicine rollout, we are concurrently adding a proprietary electronic health record system, further digitizing the patient-customer experience. Marketing, along with the positive word of mouth from happy patients and customers, continues to be a key factor in driving traffic to our stores. We compete in a marketing-intensive category given the infrequent purchase cycle for eyeglasses, and we believe our results in 2021 and our acquisition of many new customers demonstrate the effectiveness of our marketing. In 2021, we leaned in to invest more aggressively to maximize share growth during a period of disruption caused by the pandemic. Our marketing team also used the opportunity to run additional marketing tests and we believe we're more sophisticated in our CRM and digital marketing efforts than ever before. Our participation in vision insurance programs continues to be a positive revenue driver. We remain underdeveloped relative to the category and continue to see an ongoing opportunity here as managed care dollars and co-pays tend to go further in our stores than elsewhere. Lastly, as it pertains to the current supply chain environment, Our efforts to mitigate supply chain disruption continue to be effective to date. We've extended our order lead times and are benefiting from our strong long-term vendor relationships, market clout, and financial strength. Our merchandise inventories are currently in a solid position as our merchandising and supply chain teams continue to effectively navigate the ongoing challenge. At this point, let me turn the call over to Patrick for a more detailed discussion of our financial results.