Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We have market risk exposure from changes in interest rates. When appropriate, we may use derivative financial instruments to mitigate the risk from such exposure. A discussion of our accounting policies for derivative financial instruments is included in Note 1. “Business and Significant Accounting Policies” and Note 12. “Fair Value Measurement” to our consolidated financial statements.
A portion of our debt bears interest at variable rates. If market interest rates increase, the interest rate on our variable rate debt will increase and will create higher debt service requirements, which would adversely affect our cash flow and could adversely impact our results of operations. In December 2025, we entered into an interest rate swap agreement to help manage interest rate exposure by economically converting a portion of our variable-rate debt to fixed-rate debt. Our interest rate swap is intended to mitigate some of the effects of increases in interest rates. See Note 13. “Interest Rate Derivatives” to our consolidated financial statements for more information on our interest rate swap.
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As of January 3, 2026, our total borrowing consisted of $237.6 million of term loan borrowings subject to variable interest rates with a weighted average borrowing rate of 5.6%. An increase to market rates of 1.0% would result in a $1.3 million impact to interest expense as of January 3, 2026. A decrease to market rates of 1.0% would result in a $1.3 million impact to interest expense as of January 3, 2026.
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Item 8. Consolidated Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 )
62
Consolidated Balance Sheets as of January 3, 2026 and December 28, 2024
63
Consolidated Statements of Operations and Comprehensive (Loss) Income for the Fiscal Years Ended January 3, 2026, December 28, 2024, and December 30, 2023
64
Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended January 3, 2026, December 28, 2024, and December 30, 2023
65
Consolidated Statements of Cash Flows for the Fiscal Years Ended January 3, 2026, December 28, 2024, and December 30, 2023
66
Notes to Consolidated Financial Statements
67
Schedule I – Condensed Financial Information of Registrant
98
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of National Vision Holdings, Inc. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of National Vision Holdings, Inc. and subsidiaries (the “Company”) as of January 3, 2026 and December 28, 2024, the related consolidated statements of operations and comprehensive (loss) income, stockholders' equity, and cash flows, for each of the three years in the period ended January 3, 2026, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 3, 2026 and December 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended January 3, 2026, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 3, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 4, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ Deloitte & Touche LLP
Atlanta, GA
March 4, 2026
We have served as the Company's auditor since 2002.
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National Vision Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
In Thousands, Except Share Data
As of
January 3, 2026 As of
December 28, 2024
ASSETS
Current assets:
Cash and cash equivalents $ 38,708 $ 73,948
Accounts receivable, net 57,322 49,938
Inventories 89,318 93,918
Prepaid expenses and other current assets 40,374 32,024
Total current assets 225,722 249,828
Noncurrent assets:
Property and equipment, net 344,619 362,175
Goodwill 700,642 698,305
Trademarks and trade names 240,547 240,547
Other intangible assets, net 7,554 8,269
Right of use assets 394,896 408,589
Other assets 69,698 40,058
Total noncurrent assets 1,757,956 1,757,943
Total assets $ 1,983,678 $ 2,007,771
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 78,999 $ 53,643
Other payables and accrued expenses 109,674 109,036
Unearned revenue 52,279 42,002
Deferred revenue 64,560 62,507
Current maturities of long-term debt and finance lease obligations 16,583 101,392
Current operating lease obligations 90,313 99,694
Total current liabilities 412,408 468,274
Noncurrent liabilities:
Long-term debt and finance lease obligations, less current portion and debt discount 229,327 248,610
Noncurrent operating lease obligations 358,377 366,335
Deferred revenue 22,517 22,082
Other liabilities 8,944 8,228
Deferred income taxes, net 82,572 77,909
Total noncurrent liabilities 701,737 723,164
Commitments and contingencies (See Note 11)
Stockholders’ equity:
Common stock, $ 0.01 par value; 200,000,000 shares authorized; 86,278,538 and 85,444,263 shares issued as of January 3, 2026 and December 28, 2024, respectively; 79,416,050 and 78,775,117 shares outstanding as of January 3, 2026 and December 28, 2024, respectively
862 854
Additional paid-in capital 834,000 807,048
Accumulated other comprehensive loss ( 121 ) —
Retained earnings 255,717 226,117
Treasury stock, at cost; 6,862,488 and 6,669,146 shares as of January 3, 2026 and December 28, 2024, respectively
( 220,925 ) ( 217,686 )
Total stockholders’ equity 869,533 816,333
Total liabilities and stockholders’ equity $ 1,983,678 $ 2,007,771
Note: Fiscal year 2025 includes 53 weeks. Fiscal year 2024 includes 52 weeks.
The accompanying notes are an integral part of these consolidated financial statements.
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National Vision Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive (Loss) Income
In Thousands, Except Per Share Amounts
Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Revenue:
Net product sales $ 1,604,592 $ 1,463,139 $ 1,423,229
Net sales of services and plans 382,896 360,181 333,142
Total net revenue 1,987,488 1,823,320 1,756,371
Costs applicable to revenue (exclusive of depreciation and amortization):
Products 461,213 433,194 424,011
Services and plans 358,256 330,862 310,644
Total costs applicable to revenue 819,469 764,056 734,655
Operating expenses:
Selling, general and administrative expenses 1,016,251 938,524 904,757
Depreciation and amortization 91,152 91,349 89,874
Asset impairment 1,991 39,851 2,699
Other expense (income), net ( 204 ) ( 101 ) ( 104 )
Total operating expenses 1,109,190 1,069,623 997,226
Income (loss) from operations 58,829 ( 10,359 ) 24,490
Interest expense, net 17,148 16,184 14,339
(Gain) loss on extinguishment of debt — ( 859 ) 599
Earnings (loss) from continuing operations before income taxes 41,681 ( 25,684 ) 9,552
Income tax provision
12,081 1,481 6,006
Income (loss) from continuing operations
29,600 ( 27,165 ) 3,546
Income (loss) from discontinued operations, net of tax (See Note 2) — ( 1,334 ) ( 69,447 )
Net income (loss) $ 29,600 $ ( 28,499 ) $ ( 65,901 )
Basic Earnings (loss) per share:
Continuing operations $ 0.37 $ ( 0.35 ) $ 0.05
Discontinued operations $ — $ ( 0.02 ) $ ( 0.89 )
Total $ 0.37 $ ( 0.36 ) $ ( 0.84 )
Diluted Earnings (loss) per share:
Continuing operations $ 0.37 $ ( 0.35 ) $ 0.05
Discontinued operations $ — $ ( 0.02 ) $ ( 0.88 )
Total $ 0.37 $ ( 0.36 ) $ ( 0.84 )
Weighted average shares outstanding:
Basic 79,131 78,592 78,313
Diluted 80,576 78,592 78,596
Comprehensive income (loss):
Net income (loss) $ 29,600 $ ( 28,499 ) $ ( 65,901 )
Unrealized gain (loss) on hedge instruments
( 161 ) 548 1,019
Tax provision of unrealized gain (loss) on hedge instruments
( 40 ) 129 259
Comprehensive income (loss) $ 29,479 $ ( 28,080 ) $ ( 65,141 )
Note: Fiscal year 2025 includes 53 weeks. Fiscal years 2024 and 2023 include 52 weeks.
The accompanying notes are an integral part of these consolidated financial statements.
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National Vision Holdings, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity
In Thousands
Common Stock Additional
Paid-In
Capital Accumulated
Other
Comprehensive
Loss Retained
Earnings Treasury
Stock Total
Stockholders’
Equity
Shares Amount
Balances at December 31, 2022 78,992 $ 842 $ 767,112 $ ( 1,179 ) $ 320,517 $ ( 186,179 ) $ 901,113
Issuance of common stock (1)
558 6 1,832 — — — 1,838
Stock-based compensation — — 20,023 — — — 20,023
Purchase of treasury stock ( 1,239 ) — — — — ( 28,415 ) ( 28,415 )
Unrealized gain on hedge instruments, net of tax — — — 760 — — 760
Net income (loss) — — — — ( 65,901 ) — ( 65,901 )
Balances at December 30, 2023 78,311 848 788,967 ( 419 ) 254,616 ( 214,594 ) 829,418
Issuance of common stock (1)
613 6 1,501 — — — 1,507
Stock-based compensation — — 16,580 — — — 16,580
Purchase of treasury stock ( 149 ) — — — — ( 3,092 ) ( 3,092 )
Unrealized gain on hedge instruments, net of tax — — — 419 — — 419
Net income (loss) — — — — ( 28,499 ) — ( 28,499 )
Balances at December 28, 2024 78,775 854 807,048 — 226,117 ( 217,686 ) 816,333
Issuance of common stock (1)
834 8 3,387 — — — 3,395
Stock-based compensation — — 23,565 — — — 23,565
Purchase of treasury stock ( 193 ) — — — — ( 3,239 ) ( 3,239 )
Unrealized gain (loss) on hedge instruments, net of tax
— — — ( 121 ) — — ( 121 )
Net income — — — — 29,600 — 29,600
Balances at January 3, 2026 79,416 $ 862 $ 834,000 $ ( 121 ) $ 255,717 $ ( 220,925 ) $ 869,533
(1) Consists primarily of the vesting of shares issued under the Company’s stock incentive plans and Associate Share Purchase Plan.
Note: Fiscal year 2025 includes 53 weeks. Fiscal years 2024 and 2023 include 52 weeks.
The accompanying notes are an integral part of these consolidated financial statements.
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National Vision Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
In Thousands
Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Cash flows from operating activities:
Net income (loss) $ 29,600 $ ( 28,499 ) $ ( 65,901 )
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization 91,152 92,680 98,252
Amortization of debt discount and deferred financing costs 1,217 2,121 3,351
Amortization of cloud computing implementation costs 8,741 6,402 3,170
Asset impairment 1,991 40,099 82,413
Deferred income tax expense (benefit) 4,663 ( 9,975 ) ( 5,989 )
Stock-based compensation expense 23,686 16,708 20,174
(Gains) on change in fair value of derivatives
— ( 34 ) ( 1,274 )
Inventory adjustments 5,327 4,391 3,707
Other ( 56 ) ( 1,013 ) 3,891
Changes in operating assets and liabilities:
Accounts receivable ( 8,069 ) 36,399 ( 7,817 )
Inventories ( 728 ) 21,598 ( 457 )
Operating lease right of use assets and liabilities ( 1,822 ) ( 2,321 ) 524
Other assets ( 45,656 ) ( 7,286 ) ( 3,171 )
Accounts payable 25,356 ( 13,913 ) 2,280
Deferred and unearned revenue 12,766 ( 5,852 ) 7,401
Other liabilities ( 1,875 ) ( 17,856 ) 32,479
Net cash provided by operating activities 146,293 133,649 173,033
Cash flows from investing activities:
Purchase of property and equipment ( 72,840 ) ( 95,505 ) ( 114,774 )
Other ( 3,766 ) ( 589 ) ( 1,048 )
Net cash used for investing activities ( 76,606 ) ( 96,094 ) ( 115,822 )
Cash flows from financing activities:
Repayments on long-term debt ( 126,337 ) ( 222,064 ) ( 103,000 )
Borrowings on long-term debt
25,000 115,000 —
Payments of debt issuance costs — ( 1,703 ) ( 3,312 )
Payments on finance lease obligations ( 3,475 ) ( 2,993 ) ( 3,918 )
Proceeds from issuance of common stock 3,395 1,507 1,837
Purchase of treasury stock ( 3,205 ) ( 3,092 ) ( 28,415 )
Net cash used for financing activities ( 104,622 ) ( 113,345 ) ( 136,808 )
Net change in cash, cash equivalents and restricted cash ( 34,935 ) ( 75,790 ) ( 79,597 )
Cash, cash equivalents and restricted cash, beginning of year 75,237 151,027 230,624
Cash, cash equivalents and restricted cash, end of year (See Note 3)
$ 40,302 $ 75,237 $ 151,027
Supplemental cash flow disclosure information:
Cash paid for interest $ 19,091 $ 13,398 $ 11,735
Capital expenditures accrued at the end of the period $ 12,186 $ 9,248 $ 5,412
Note: Fiscal year 2025 includes 53 weeks. Fiscal years 2024 and 2023 include 52 weeks.
The accompanying notes are an integral part of these consolidated financial statements.
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National Vision Holdings, Inc. and Subsidiaries
Index to Notes to Consolidated Financial Statements
1. Business and Significant Accounting Policies
68
2. Discontinued Operations
76
3. Details of Certain Balance Sheet Accounts
77
4. Goodwill and Intangible Assets
79
5. Debt
80
6. Stock Incentive Plan
81
7. Income Taxes
84
8. Revenue from Contracts with Customers
86
9. Deferred Revenue
87
10. Leases
88
11. Commitments and Contingencies
89
12 Fair Value Measurement of Financial Assets and Liabilities
91
13. Interest Rate Derivatives
93
14. Earnings Per Share
94
15. Segment Reporting
94
16. Accumulated Other Comprehensive Loss
97
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National Vision Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
1. Business and Significant Accounting Policies
Nature of Operations
National Vision Holdings, Inc. (“NVHI,” the “Company,” “we,” “our,” or “us”) is a holding company whose operating subsidiaries include its indirect wholly owned subsidiary, National Vision, Inc. (“NVI”) and NVI’s direct wholly owned subsidiaries. We are a leading value retailer of eyeglasses and contact lenses in the United States (“U.S”). We operated 1,250 and 1,240 retail optical locations in the U.S. and its territories as of the fiscal years ended January 3, 2026 and December 28, 2024, respectively, through our four store brands, including America’s Best Contacts and Eyeglasses (“America’s Best”), Eyeglass World, Vista Optical locations on select U.S. Army/Air Force military bases (“Military”) and within select Fred Meyer stores. We also operate omni-channel websites for our America’s Best, Eyeglass World and Military brands, as well as a dedicated e-commerce website.
We also operate a specialized health maintenance organization (“HMO”) that is licensed as a single-service health plan under California law. The HMO issues individual vision plans in connection with our America’s Best operations in California.
Fiscal Year
We operate on a retail fiscal calendar that results in a given fiscal year consisting of a 52-week or 53-week period ending on the Saturday closest to December 31. In a 52-week fiscal year, each quarter contains 13 weeks of operations; in a 53-week fiscal year, each of the first, second and third quarters include 13 weeks of operations and the fourth quarter includes 14 weeks of operations.
References herein to “fiscal year 2025” relate to the 53 weeks ended January 3, 2026. References herein to “fiscal year 2024” and “fiscal year 2023,” relate to the 52 weeks ended December 28, 2024, and December 30, 2023, respectively. Unless otherwise stated, references to years in this report relate to fiscal years rather than calendar years.
Basis of Presentation and Principles of Consolidation
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include our accounts and those of our subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts within the consolidated financial statements and footnotes to the financial statements for fiscal year 2024 and fiscal year 2023 have been reclassified to conform to the fiscal year 2025 presentation.
The Company has consolidated certain entities meeting the definition of a variable interest entity (“VIE”) as the Company concluded that it is the primary beneficiary of the entities under the provisions of Accounting Standards Codification 810, Consolidation. As of January 3, 2026, the variable interest entities include 29 professional corporations. The total assets of the consolidated VIEs included in the accompanying Consolidated Balance Sheets as of January 3, 2026 and December 28, 2024, were $ 4.6 million and $ 7.0 million, respectively, and the total liabilities of the consolidated VIEs were $ 6.9 million and $ 8.4 million, respectively.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Share Repurchases
On February 23, 2022, our Board of Directors authorized a $ 100 million increase to the share repurchase authorization, resulting in total authorization of $ 200 million. During fiscal year 2023, the Company repurchased 1.1 million shares of its common stock for $ 25 million under the share repurchase program. The Company’s original share repurchase authorization expired on December 30, 2023, and had remaining capacity of $ 25 million. Effective February 23, 2024, the Board authorized the Company to repurchase up to $ 50 million aggregate amount of shares of the Company’s common stock until January 3, 2026. No additional shares were repurchased in fiscal years 2024 and 2025. The share repurchase authorization expired on January 3, 2026, and had remaining capacity of $ 50 million. Effective March 2, 2026, the Board authorized the Company to repurchase up to $ 50 million aggregate amount of shares of the Company’s common stock until December 28, 2030. The authorization permits the Company to make purchases of its common stock from time to time in the open market or privately negotiated transactions, and pursuant to pre-set trading plans meeting the
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requirements of all applicable securities laws and regulations. The timing and amounts of any such repurchases will depend on a variety of factors, including the market price of the Company’s shares, general market and economic conditions, legal requirements and tax implications. The Company expects to fund the share repurchases using cash on hand.
CARES Act
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, accelerates a company’s ability to recover Alternative Minimum Tax (“AMT”) refundable credits that otherwise could have been claimed in 2020 and 2021, to 2018 and 2019, with an option to elect recovery of the full credit amount for 2018. The Company recognizes government grants for which there is a reasonable assurance of compliance with grant conditions and receipt of credits. Amounts receivable under the CARES Act were $ 9.0 million as of January 3, 2026 and December 28, 2024. Credits recognized under the CARES Act offset deferred payroll taxes that would otherwise have been payable as of January 1, 2022. In January 2026, subsequent to the balance sheet date, the Company received the full payment of these CARES Act credits.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, demand deposits, and highly liquid investments with original maturities of three months or less at the date of purchase. Substantially all our cash and cash equivalents are held at a limited number of financial institutions and may exceed federally insured limits.
Accounts Receivable, Net
Accounts receivable associated with revenues consist primarily of trade receivables, which include credit card receivables from credit card companies. Trade receivables consist primarily of receivables from managed care payors. While we have relationships with almost all vision care insurers in the U.S. and with all of the major carriers, currently, a relatively small number of payors comprise the majority of our managed care revenues, subjecting us to concentration risk. Accounts receivable are reduced by allowances for credit losses. Estimates of our allowance for credit losses are based on our historical and current operating, billing, and collection trends, as well as current conditions and reasonable and supportable forecasts about the future. Accounts receivable are written off after all collection attempts have been exhausted. Credit loss expense recognized on our receivables, which is presented in Selling, general and administrative expenses (“SG&A”) in the Company’s Consolidated Statements of Operations, was approximately $ 1.0 million, $ 0.4 million and $ 0.6 million for the fiscal years 2025, 2024 and 2023, respectively.
Inventories
The cost of inventory is determined using the weighted average cost method. Inventories at retail stores consist of finished goods and are valued at the lower of cost or estimated net realizable value (“NRV”). Manufactured inventories are valued using absorption accounting which includes material, labor, other variable costs and other applicable manufacturing overhead. Inventory values are adjusted for estimated obsolescence and written down to NRV based on estimates of current and anticipated demand, customer preference, and merchandise age. Shrinkage is estimated and recorded throughout the period in costs applicable to revenue based on historical results and current inventory levels. Actual shrinkage is recorded throughout the year based upon periodic physical counts. See Note 3. “Details of Certain Balance Sheet Accounts” for further details.
The Company’s inventory consists primarily of eyeglass frames, contact lenses, and unprocessed eyeglass lenses. A significant portion of our inventory is supplied by a small number of key vendors. During fiscal year 2025, approximately 96 % of contact lens expenditures were with three vendors and approximately 86 % of lens expenditures were with one vendor. This exposes us to vendor concentration risk. We are less exposed to a supplier risk for our eyeglass frames as only approximately 55 % of frame expenditures were with two vendors.
Property and Equipment
Property and equipment (“P&E”) is stated at cost less accumulated depreciation. Depreciation associated with P&E is included in Depreciation and amortization in the accompanying Consolidated Statements of Operations. When we retire or otherwise dispose of P&E, we remove the cost and related accumulated depreciation from our accounts and recognize any gain or loss on the sale of such assets in SG&A in the Consolidated Statements of Operations and Comprehensive (Loss) Income. We capitalize major replacements and remodeling, and recognize expenditures for maintenance and repairs in SG&A.
We depreciate P&E for financial accounting purposes using the straight-line method over the following estimated useful lives:
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Buildings 34 years
Equipment 3 - 10 years
Information technology hardware and software (a)
2 - 5 years
Furniture and fixtures 6 years
Leasehold improvements (b)
5 - 10 years
P&E under finance leases (b)
10 years
____________
(a) Costs of developing or obtaining software for internal use, such as direct costs of materials or services and internal payroll costs related to the software development projects, are capitalized to information technology hardware and software.
(b) Depreciation of leasehold improvements is recognized over the shorter of the estimated useful life of the asset or the term of the lease. The term of the lease includes renewal options for additional periods if the exercise of the renewal is considered to be reasonably assured.
Cloud Computing Arrangements
The Company capitalizes certain costs related to the acquisition and development of internal use software, including implementation costs incurred in a cloud computing arrangement during the application development stages of projects. Capitalized implementation costs are amortized on a straight-line basis over the expected term of the hosting arrangement, which includes consideration of the non-cancellable contractual term and reasonably certain renewals. Costs incurred during the preliminary project or the post-implementation stages of the project are expensed as incurred. Capitalized implementation costs are included in Other assets in our Consolidated Balance Sheets. Amortization of capitalized implementation costs is included in SG&A in the Consolidated Statements of Operations and Comprehensive (Loss) Income.
Goodwill and Intangible Assets
Indefinite-lived intangible assets include goodwill and our trademarks and tradenames; we evaluate these assets annually for impairment, or more frequently if events and circumstances indicate that it is more likely than not that goodwill or intangible assets are impaired. Our annual testing date for impairment of goodwill and indefinite-lived intangible assets is the first day of the fourth fiscal quarter, which for fiscal year 2025 was September 28, 2025. Costs to renew intangible assets are expensed as incurred.
Goodwill is impaired if a reporting unit’s carrying value exceeds its fair value, and impairment is calculated as the excess between carrying value over fair value. We consider each of our operating segments to be reporting units. We estimate the fair value of our reporting units using a combination of income and market approaches. The income approach is based on a discounted cash flow analysis and involves estimating after-tax cash flows that are discounted using a weighted average cost of capital that considers both market risk and company-specific risk. The cash flows used in the analysis are based on financial forecasts developed internally by management and require significant judgment. Significant unobservable inputs used in the fair value measurement of the reporting units include, but are not limited to, revenue growth rates, costs applicable to revenue, SG&A and discount rates. These assumptions are sensitive to future changes in the business profitability, changes in our business strategy and external market conditions, among other factors. A decrease to the long-term revenue growth rate assumption or an increase to the expense growth rate assumptions could require us to record goodwill impairment charges. The market approach estimates fair value using market‑based multiples for comparable companies and requires significant management judgment. Changes to the comparable company set or selected market‑based inputs can materially affect the estimated fair value of our reporting units. Both the income and market approaches incorporate entity‑specific inputs (Level 3) and observable market information (Level 2) within the fair value hierarchy.
We use the relief-from-royalty method to estimate fair value of our trademarks and trade names, which involves estimating a royalty rate based on comparable licensing arrangements, applying that rate to the revenue projections for the subject asset, and then estimating fair value using a discounted cash flow analysis; the discounted cash flow analysis uses a weighted average cost of capital that considers both market risk and company-specific risk. We record an impairment charge as the excess of carrying value over estimated fair value.
Finite-lived, amortizing intangible assets consist of our Fred Meyer contracts and relationship. We amortize finite-lived intangible assets on a straight-line basis over their estimated useful lives. Amortization expense associated with finite-lived intangible assets is included in Depreciation and amortization in the accompanying Consolidated Statements of Operations.
If impairment indicators related to amortizing intangible assets are present, we estimate cash flows expected to be generated over the remaining useful lives of the related assets based on current projections. If the projected net undiscounted cash flows are less than the carrying value of the related assets, we then measure impairment based on a discounted cash flow model and record an impairment charge as the excess of carrying value over estimated fair value.
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See Note 4. “Goodwill and Intangible Assets”, and Note 12. “Fair Value Measurement” for further detail on impairment of goodwill and intangible assets.
Investments
In the second quarter of fiscal year 2023, we completed an investment in an entity specializing in applying artificial intelligence-powered screening and diagnostic tools to retinal imaging. During fiscal years 2024 and 2023, we invested $ 1.5 million and $ 1.8 million, respectively. The investment is valued at cost. In fiscal year 2024, we completed an investment in a convertible promissory note issued by this entity. The investments are recognized in Other assets in the Consolidated Balance Sheets and in Other in the investing section of the Consolidated Statements of Cash Flows for fiscal years fiscal years 2025, 2024 and 2023. In the fourth quarter of fiscal year 2025, the investee entered into an agreement and plan of merger pursuant to which it will be acquired by the Company’s co-preferred investor in the entity. In connection with the sale, the Company anticipates receiving full repayment in cash of its capital and promissory note investment balances, and no gain or loss is expected to be recognized. Refer to No te 12. “Fair Value Measurement ” for more information on the investments in this entity.
Fair Value Measurement of Assets and Liabilities
The Company accounts for certain assets and liabilities at fair value. The Company generally uses a market approach, when practicable, in valuing financial instruments. For certain assets the Company may also use a valuation technique consistent with the income approach whereby future cash flows are converted to a single discounted amount. The carrying value of the Company’s cash equivalents and restricted cash, accounts receivable, accounts payable and other payables and accrued expenses, approximate fair value due to their short-term nature.
Non-financial assets such as P&E, right of use (“ROU”) assets and intangible assets are subject to nonrecurring fair value measurements if impairment indicators are present. Factors we consider important that could trigger an impairment review include a significant under-performance compared to expected operating results, a significant or adverse change in customer business climate, and a significant negative industry or economic trend.
Refer to “Long-lived Asset Impairment” section below and Note 12. “Fair Value Measurement” for the Company’s recurring and non-recurring fair value measurements.
Deferred Financing Costs and Loan Discounts
Costs incurred in connection with long-term debt, which are paid directly to the Company’s lenders and to third parties, are presented as reductions to our long-term debt balance, except for the costs related to our revolving credit facility which are presented as assets. These costs are amortized over the term of the related financing agreement and included in Interest expense, net in the accompanying Consolidated Statements of Operations.
Self-Insurance Liabilities
We are primarily self-insured for workers’ compensation, associate health benefits and general liability claims. We record self-insurance liabilities based on claims filed, including the development of those claims and an estimate of claims incurred but not yet reported. Should a different amount of claims occur compared to what was estimated, or costs of the claims increase or decrease beyond what was anticipated, liabilities may need to be adjusted accordingly. We periodically update our estimates and record such adjustments in the period in which such determination is made. Self-insurance liabilities are recorded on an undiscounted basis in the accompanying Consolidated Balance Sheets. Refer to the following table and Note 3. “Details of Certain Balance Sheet Accounts” for further details.
We reinsure worker’s compensation and medical claims above our retention levels with a highly rated financial institution that can be expected to fully perform under the terms of the arrangement. Estimated recoveries from reinsurance as of fiscal year end 2025 and 2024 are shown in the following table.
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In thousands Balance Sheet Classification As of
January 3, 2026 As of
December 28, 2024
Current portion Prepaid Expenses and Other Current Assets $ 973 $ 854
Noncurrent portion Other Assets 2,538 1,281
Total estimated recoveries from reinsurance $ 3,511 $ 2,135
Derivative Financial Instruments
The Company uses interest rate derivatives to manage the exposure of its Term Secured Overnight Financing Rate (“Term SOFR”)-based debt to fluctuations in interest rates. If our derivatives are designated as cash flow hedges, we formally document our hedge relationships, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking the hedge transactions. We record all interest rate derivatives in our Consolidated Balance Sheets on a gross basis at fair value. Fair value represents estimated amounts we would receive or pay upon a termination of interest rate derivatives prior to their scheduled expiration dates. The fair value is based on information that is model-driven and whose inputs were observable (Level 2 inputs) such as Term SOFR forward rates. We do not hold or enter into financial instruments for trading or speculative purposes.
The gain or loss resulting from fair value adjustments for highly effective cash flow hedges is recorded in Accumulated other comprehensive loss (“AOCL”) in the accompanying Consolidated Balance Sheets until the hedged item is recognized as Interest expense, net in the Consolidated Statements of Operations. The gain or loss resulting from fair value adjustments of derivatives not deemed to be highly effective cash flow hedges is recognized in Interest expense, net immediately. We perform assessments of the effectiveness of our derivative contracts designated as hedges on a quarterly basis at a minimum and may perform the assessment more often, if deemed applicable.
To manage credit risk associated with our interest rate hedging program, we select as counterparties major financial institutions with investment grade credit ratings. The impact of credit risk, as well as the ability of each party to fulfill its obligations under our derivative financial instruments, is considered in determining the fair value of the contracts. We were party to an interest rate collar to offset the variability of cash flows in Term SOFR-indexed debt interest payments. The interest rate collar matured on July 18, 2024. On December 23, 2025, we entered into an interest rate swap that fixed the variable benchmark component (SOFR) on $ 100 million of variable rate debt through May 2027. See Note 13. “Interest Rate Derivatives” for further details.
Accumulated Other Comprehensive Loss
AOCL is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Accumulated other comprehensive loss, net of income tax, is entirely composed of the cumulative unrealized loss on our hedging instruments. See Note 16. “Accumulated Other Comprehensive Loss” for details of reclassifications out of AOCL.
Revenue Recognition
Net product sales include sales of prescription and non-prescription eyewear, contact lenses and related accessories to retail customers (including those covered by managed care). Net sales of services and plans include sales of eye exams, eye care club membership fees, product protection plans (i.e. warranties) and HMO vision plan fees.
The majority of our revenues are recognized at a point in time, either at the point of sale or upon delivery and customer acceptance. Consideration is generally paid at the time of sale in cash, credit card, or on account with managed care payors, which typically have payment terms between 14 and 120 days, with most paying within 60 days. Point in time revenues include retail sales of prescription and non-prescription eyewear, contact lenses, and related accessories to retail customers (including those covered by managed care), as well as stand-alone eye exams. Revenues recognized over time primarily include product protection plans (i.e. warranties) and eye care club memberships.
At our America’s Best brand, our signature offer is an eye exam plus two pairs of eyeglasses for one great price (“two-pair offer”). Since an eye exam is a key component in the ability for acceptable prescription eyewear to be delivered to a customer, we concluded that the eye exam service, while capable of being distinct from the eyeglass product delivery, was not distinct in the context of the two-pair offer. As a result, we do not allocate revenue to the eye exam associated with the two-pair offer, and we record all revenue associated with the offer in Owned & Host net product sales when the customer has received and accepted the merchandise.
Our retail customers generally make payments for prescription eyewear products at the time they place an order. Amounts we collect in advance for undelivered merchandise are reported as Unearned revenue in the accompanying Consolidated Balance Sheets. Unearned revenue at the end of a reporting period is estimated based on processing and delivery times throughout the current month which generally within two weeks; all unearned revenue at the end of a reporting period is recognized in the next fiscal period.
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Revenue is recognized net of sales taxes and returns and includes amounts billed to customers related to shipping and handling costs. The returns allowance is based on historical return patterns. Provisions for estimated returns are established and the expected costs continue to be recognized as reductions to revenue when the products are sold. Shipping and handling costs are accounted for as fulfillment costs and are included in costs applicable to revenue.
An increasing percentage of our customers receive vision insurance coverage through managed care payors. The managed care business represents an increasingly significant portion of our overall revenues and our revenue growth and represented 42 % of our revenues from continuing operations in fiscal 2025.
We record reductions in revenue for estimated price concessions granted to managed care providers. The Company considers its revenue from managed care customers to include variable consideration and estimates such amounts associated with managed care customer revenues using the history of concessions provided and cash receipts from managed care providers. We reduced our net revenue for variable considerations of $ 8.8 million, $ 17.7 million and $ 14.7 million during the fiscal years 2025, 2024 and 2023, respectively.
Refer to Note 8. “Revenue from Contracts with Customers” for further details of our revenues.
Costs Applicable to Revenue
Costs applicable to revenue consist primarily of cost of products sold and costs of administering services and plans. Costs of products sold include (i) costs to procure non-prescription eyewear, contacts and accessories which we purchase and sell in their finished form, (ii) costs to manufacture finished prescription eyeglasses, including direct materials, labor and overhead and (iii) remake costs, warehousing and distribution expenses and internal transfer costs. Costs of services and plans include costs associated with warranty programs, eye care club memberships, HMO vision plan fees, eye care practitioner and eye exam technician payroll, taxes and benefits and optometric and other service costs. Depreciation and amortization are excluded from costs applicable to revenue and are presented separately on the accompanying Consolidated Statements of Operations and Comprehensive (Loss) Income.
As a component of the Company’s procurement program, the Company frequently enters into contracts with its vendors that provide for payments of rebates or other allowances. These vendor payments are reflected when earned or as progress is made toward earning the rebate or allowance and, depending on the terms of the agreement with the vendor, are treated as a reduction of the carrying value of the inventory and a reduction of cost of products. Rebates that have been earned but not yet received are recognized as an increase to Accounts receivable, net or a reduction to Accounts payable, depending on the nature of the agreement with the vendor, until the payment has been received.
Selling, General and Administrative
SG&A includes store associate (including optician) payroll, taxes and benefits, occupancy and other store expenses, advertising and promotion, field services, and corporate support. Advertising and promotion costs, including online marketing arrangements, direct mail, television and radio, are recorded in SG&A and expensed at the time the advertising first occurs. Production costs of future media advertising and related promotional campaigns are deferred until the advertising events occur. Non-capital expenditures associated with opening new stores, including rent, marketing expenses, travel and relocation costs, and training costs, are recorded in SG&A as incurred. Certain vendor contracts provide for marketing co-op allowances; such allowances are reflected when earned or as progress is made toward earning the allowance and are treated as a reduction of SG&A.
Advertising expenses were $ 138.8 million, $ 138.6 million and $ 137.2 million for fiscal years 2025, 2024 and 2023, respectively.
Severance benefits
During fiscal years 2025, 2024 and 2023, we recognized $ 3.6 million, $ 0.1 million and $ 1.8 million, respectively, in SG&A in the Consolidated Statements of Operations and Comprehensive (Loss) Income, in the corporate and other category, related to termination benefits for certain associates; these charges were recognized in accordance with Financial Accounting Standards Board (“FASB”) guidance on employers’ accounting for post-employment benefits and guidance on accounting for costs associated with exit or disposal activities, as appropriate.
Leases
We lease our stores, distribution center, corporate offices, and most of our laboratories. These leases generally have noncancelable lease terms of between five and 10 years, with an option to renew for additional terms of one to 10 years or more. The lease term includes renewal option periods when the renewal is deemed reasonably certain after considering the value of the leasehold improvements at the end of the noncancelable lease period. Most leases for our stores provide for a minimum rent and typically include escalating rent over time with the exception of Military for which lease payments are variable and based on a percentage of sales. For Vista Optical locations in Fred Meyer stores, we pay the greater of fixed rent or a percentage of sales after certain minimum thresholds are achieved. The Company’s leases generally
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require us to pay insurance, real estate taxes and common area maintenance expenses, substantially all of which are variable and not included in the measurement of the lease liability. Our lease arrangements frequently include tenant improvement allowances (“TIAs”), which are contractual amounts received or receivable from a lessor for improvements made to leased properties by the Company. For operating leases, TIAs are treated as a reduction of the lease payments used to measure the ROU assets in the accompanying Consolidated Balance Sheets and are amortized as a reduction in rental expense over the life of the respective leases. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The lease liability is measured at the present value of future lease payments over the lease term less TIAs receivable, and the ROU asset is measured at the lease liability amount, adjusted for prepaid lease payments, TIAs received and the lessee’s initial direct costs. As the rate implicit in the Company’s leases is not easily determinable, the Company’s incremental borrowing rate is used in calculating the present value of the sum of the lease payments. Factors incorporated into the calculation of the lease incremental borrowing rate include lease term, borrowing rates on the Company’s long-term debt, Term SOFR margins for issuers of similar credit rating to NVI and effect of collateralization.
For finance leases, the related ROU assets are recorded within Property and equipment, net on the Consolidated Balance Sheets. The corresponding finance lease obligations are recorded within Current maturities of long-term debt and finance lease obligations for the current portion and within Long-term debt and finance lease obligations, less current portion and debt discount for the noncurrent portion on the Consolidated Balance Sheets. Finance lease obligations are measured at the present value of lease payments due over the lease term at lease commencement.
Stock-Based Compensation
We measure stock-based compensation cost, which consists of grants of stock options, performance stock units (“PSUs”), and restricted stock units (“RSUs”), to associates and non-employee directors, based on the estimated grant date fair value of the awards. We recognize compensation expense for all awards containing a service requirement over the requisite service period using a straight-line recognition method. PSUs granted by the Company contain vesting conditions based on either performance or market conditions, in addition to a service requirement. For PSUs with performance conditions, we record compensation expense based on the portion of the award’s total fair value attributable to the service period already completed. The recognized expense is based on the number of units expected to vest, which is estimated by assessing expected performance against our defined metrics, which include Adjusted Operating Income and return on invested capital. These estimates may change over time and may result in reversals of previously recognized expense. For PSUs with market conditions, vesting is based on relative total shareholder return compared to a defined peer group. The fair value of these awards is estimated using the Monte Carlo simulation model and compensation expense is recognized based on the fair value on a straight-line basis over the requisite service period and is not adjusted for subsequent changes in actual or expected performance. We account for forfeitures as they occur. See Note 6. “Stock Incentive Plan” for further details related to our stock-based compensation plans.
Long-lived Asset Impairment
Non-financial assets such as P&E, ROU assets and intangible assets are subject to nonrecurring fair value measurements if impairment indicators are present. We evaluate impairment of long-lived tangible and ROU store assets at the store level, which is the lowest level at which independent cash flows can be identified, when events or conditions indicate the carrying values of such assets may not be recoverable. In making this evaluation, we may consider multiple factors including financial performance of the stores, regional and local business climates, industry or economic trends, future plans for the store operations and other qualitative factors. If the store’s projected undiscounted net cash flows expected to be generated by the related assets over the life of the primary asset within the asset group are less than the carrying value of the subject assets, we determine an estimate of the fair value of the asset group using an income approach based on discounted cash flows, which require estimates and assumptions related to forecasted store revenue growth rates and store profitability. If the fair value of the asset group is less than its carrying value, the loss is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long lived asset of the group shall not reduce the carrying amount of that asset below its fair value. We consider market-based indications of prevailing rental rates for retail space, market participant discount rates, and lease incentives when estimating the fair values of ROU assets.
We assess non-store, long-lived assets, including capitalized software costs in use or under development, for impairment if events or changes in circumstances indicate that the carrying value of those assets may not be recoverable.
Discontinued Operations
In accordance with ASC 205-20 “Presentation of Financial Statements: Discontinued Operations,” a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. In the period in which the component meets held-for-sale or discontinued operations criteria, the major current assets, non-
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current assets, current liabilities, and non-current liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations.
Our operations related to Walmart Inc. (“Walmart”), including our former Legacy reportable segment (“Legacy”), as well as the majority of our AC Lens operations, met the requirements to be classified as discontinued operations. Accordingly, we classified the results of these operations as discontinued operations in the Consolidated Statements of Operations and Comprehensive (Loss) Income for all periods presented. The results of all discontinued operations, less applicable income taxes, are reported as components of net income separate from the net income of continuing operations, and certain assets and liabilities associated with these operations were classified as assets and liabilities of discontinued operations in the Consolidated Balance Sheets for the periods presented. There was no discontinued operations activity in fiscal year 2025. There were no discontinued operations assets or liabilities as of December 28, 2024 and January 3, 2026. Additionally, the cash flows and comprehensive (loss) income of discontinued operations have not been segregated and are included in the Consolidated Statements of Cash Flows and Consolidated Statements of Operations and Comprehensive (Loss) Income, respectively, for all periods presented. All amounts included in the notes to the consolidated financial statements relate to continuing operations unless otherwise noted. For additional information, see Note 2. “Discontinued Operations”
Income Taxes
We account for deferred income taxes based on the asset and liability method. The Company must make certain estimates and judgments in determining income tax expense. We are required to determine the aggregate amount of income tax expense to accrue and the amount which will be currently payable or refundable based upon tax statutes of each jurisdiction in which the Company does business. Deferred income taxes are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets also include future tax benefits to be derived from the utilization of tax loss carry-forwards and application of certain carry-forward credits. The net carrying amount of deferred income tax assets and liabilities is recorded in Noncurrent deferred income tax liabilities in the accompanying Consolidated Balance Sheets.
Deferred income taxes are measured using enacted tax rates in effect for the years in which those differences are expected to be recovered or settled. The effect on deferred taxes from a change in the tax rate is recognized through continuing operations in the period that includes the enactment of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future.
A valuation allowance is recorded if it is more likely than not that some portion of a deferred tax asset will not be realized. Valuation allowances are released as positive evidence of future taxable income sufficient to realize the underlying deferred tax assets becomes available.
We establish a liability for tax positions for which there is uncertainty as to whether the position will ultimately be sustained. We assess our tax positions by determining whether it is more likely than not that the position will be sustained upon examination by the appropriate taxing authorities, including resolution of any related appeals or litigation, based solely on the technical merits of the position. These calculations and assessments involve estimates and judgments because the ultimate tax outcomes are uncertain and future events are unpredictable. See Note 7. “Income Taxes” for further details.
Adoption of New Accounting Pronouncements
Income taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and for interim periods within fiscal years beginning after December 15, 2025. The Company adopted this guidance retrospectively in the fourth quarter of fiscal year 2025 and has provided the applicable disclosures in Note 7. “Income Taxes.”
Future Adoption of Accounting Pronouncements
Expense Disaggregation Disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive (Loss) Income (Topic 220-40): Expense Disaggregation Disclosures (“ASU 2024-03”). This update requires, among other things, more detailed disclosure about types of expenses in commonly presented expense captions such as cost of sales and SG&A, and is intended to improve the disclosures about an entity’s expenses including purchases of inventory, employee compensation, depreciation and amortization. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of the guidance on the consolidated financial statements and disclosures.
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Credit Losses for Accounts Receivable and Contract Assets . In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets . This update provides a practical expedient which allows an entity to assume that, for purposes of estimating expected credit losses related to an asset, current conditions as of a balance sheet date do not change for the remaining life of the asset. This guidance is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of the guidance on the consolidated financial statements and disclosures.
Derivatives and Hedging. In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815), to more closely align financial reporting with the economics of an entity’s risk management activities. The effective date for this standard is for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Early adoption is permitted. The amendments in this ASU should be applied prospectively with an option to adopt the amendments for hedging relationships existing as of the date of adoption. The Company is currently evaluating the impact of the guidance on the consolidated financial statements and disclosures.
Intangibles - Internal-Use Software . In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40) , which updates the accounting guidance for internal-use software costs. The amendments remove references to software development project stages and align the guidance with current software development practices. The standard is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the guidance on the consolidated financial statements and disclosures.
Interim Reporting. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The Company is currently evaluating the impact of the guidance on the consolidated financial statements and disclosures.
The FASB issued other accounting guidance during fiscal year 2025 that is not currently applicable or expected to have a material impact on the Company’s financial statements, and therefore, is not described above.
2. Discontinued Operations
As a result of the termination of various agreements with Walmart and the wind down of AC Lens operations in fiscal year 2024, our former Legacy reportable segment and certain other results previously included in corporate and other as well as related effects of unearned and deferred revenue, met the criteria to be presented as discontinued operations. Accordingly, the assets and liabilities and results of operations of the discontinued operations have been presented in the tables below. There was no discontinued operations activity in fiscal year 2025. There were no discontinued operations assets or liabilities as of December 28, 2024 and January 3, 2026.
During fiscal years 2024 and 2023, we recorded $ 4.4 million and $ 5.2 million, respectively, of net expense associated with the aforementioned termination and consolidation activities, which consisted of employee compensation benefits, early termination fees, and other exit related costs. These charges were recorded in both Selling, general, and administrative expenses and Costs applicable to revenue for discontinued operations. The plan has been substantially completed and we do not anticipate additional material costs related to this plan.
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The following table presents income (loss) from discontinued operations, net of tax:
In thousands Fiscal Year 2024 Fiscal Year 2023
Revenue:
Net product sales $ 126,960 $ 320,907
Net sales of services and plans 4,513 49,190
Total net revenue 131,473 370,097
Costs applicable to revenue (exclusive of depreciation and amortization):
Products 109,637 240,578
Services and plans 2,585 25,677
Total costs applicable to revenue 112,222 266,255
Operating expenses:
Selling, general and administrative expenses 21,851 87,126
Depreciation and amortization 1,331 8,378
Asset impairment 248 79,714
Other expense (income), net ( 87 ) ( 60 )
Total operating expenses 23,343 175,158
Earnings (loss) from discontinued operations before income taxes ( 4,092 ) ( 71,316 )
Income tax provision (benefit) from discontinued operations ( 2,758 ) ( 1,869 )
Income (loss) from discontinued operations, net of tax $ ( 1,334 ) $ ( 69,447 )
The following table presents significant non-cash items and cash flows from investing activities related to discontinued operations:
Fiscal Year 2024 Fiscal Year 2023
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization $ 1,331 $ 8,378
Asset impairment $ 248 $ 79,714
Stock-based compensation expense $ — $ 971
Inventory adjustments $ 442 $ ( 177 )
Other
$ ( 1,647 ) $ —
Cash flows from investing activities:
Purchase of property and equipment $ — $ ( 1,781 )
Other $ 1,738 $ —
3. Details of Certain Balance Sheet Accounts
The following table provides a reconciliation of Cash and cash equivalents reported within the Consolidated Balance Sheets to the total of Cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Cash, cash equivalents and restricted cash:
Cash and cash equivalents $ 38,708 $ 73,948 $ 149,896
Restricted cash included in Other assets
1,594 1,289 1,131
$ 40,302 $ 75,237 $ 151,027
The following tables provide additional details of certain balance sheet accounts as of the dates shown below:
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In thousands As of
January 3, 2026 As of
December 28, 2024
Accounts receivable, net:
Trade receivables $ 42,563 $ 36,208
Other receivables (1)
15,047 13,938
Allowance for credit losses ( 288 ) ( 208 )
$ 57,322 $ 49,938
(1) Includes CARES Act receivable in the amount of $ 9.0 million and $ 9.0 million as of January 3, 2026 and December 28, 2024, respectively. In January 2026, subsequent to the balance sheet date, the Company received the full payment of these receivables.
In thousands As of
January 3, 2026 As of
December 28, 2024
Inventories:
Raw materials and work in process (1)
$ 65,775 $ 66,056
Finished goods 23,543 27,862
$ 89,318 $ 93,918
(1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, the Company does not separately present raw materials and work in process.
In thousands As of
January 3, 2026 As of
December 28, 2024
Property and equipment, net:
Land and building $ 3,736 $ 3,736
Equipment 315,231 299,823
Information technology hardware and software 123,294 128,654
Furniture and fixtures 88,514 85,061
Leasehold improvements 386,329 360,927
Construction in progress 34,711 31,620
Right of use assets under finance leases 36,219 36,219
988,034 946,040
Less: Accumulated depreciation ( 643,415 ) ( 583,865 )
$ 344,619 $ 362,175
In thousands As of
January 3, 2026 As of
December 28, 2024
Other payables and accrued expenses:
Associate compensation and benefits $ 47,719 $ 42,752
Self-insurance liabilities 9,696 9,087
Capital expenditures 12,186 9,248
Advertising 6,282 6,504
Reserves for customer returns and remakes 5,489 4,840
Income tax payable 556 3,641
Supplies and other store support expenses 4,373 5,038
Litigation settlements 293 4,950
Other (1)
23,080 22,976
$ 109,674 $ 109,036
(1) Primarily includes accrued patient liability refunds, professional fees, and cloud hosted software costs
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In thousands As of
January 3, 2026 As of
December 28, 2024
Other noncurrent liabilities:
Self-insurance liabilities $ 6,144 $ 5,577
Other 2,800 2,651
$ 8,944 $ 8,228
4. Goodwill and Intangible Assets
The gross carrying amount and accumulated impairment of the Company’s goodwill balances for 2025 and 2024 are as follows:
As of
January 3, 2026 As of
December 28, 2024
In thousands Gross Carrying
Amount Accumulated
Impairment Gross Carrying
Amount Accumulated
Impairment
Owned & Host Segment (1)
$ 739,238 $ ( 38,596 ) $ 736,901 $ ( 38,596 )
(1) The Company acquired $ 2.3 million of additional goodwill during fiscal year 2025 upon transition of select Eyeglass World stores from a sublease model to a Company owned model.
The Owned & Host Segment’s goodwill contains $ 606.5 million related to America’s Best and $ 94.1 million related to Eyeglass World. Accumulated goodwill impairment relates to our Eyeglass World, Fred Meyer and Military reporting units. In fiscal year 2024, we tested Eyeglass World goodwill for recoverability due to reduced projections of future growth and profitability and we recognized an impairment of $ 19.2 million of Eyeglass World goodwill. Refer to Note 1. “Business and Significant Accounting Policies” and Note 12. “Fair Value Measurement” for more information on goodwill impairment.
Indefinite-lived intangible assets by major asset class are as follows:
In thousands As of
January 3, 2026 As of
December 28, 2024
Trademarks and trade names:
America’s Best $ 200,547 $ 200,547
Eyeglass World 40,000 40,000
$ 240,547 $ 240,547
We intend to maintain our trademarks; renewals will take place as needed.
Finite-lived, amortizing intangible assets by major asset class are as shown in the following table.
As of January 3, 2026 As of December 28, 2024
In thousands Gross Carrying
Amount Accumulated
Amortization Remaining Life
(Years) Gross Carrying
Amount Accumulated
Amortization Remaining Life
(Years)
Contracts and relationships:
Fred Meyer contracts and relationships
$ 8,400 $ ( 846 ) 11 $ 8,400 $ ( 169 ) 12
Other 151 ( 151 ) 0 151 ( 113 ) 1
$ 8,551 $ ( 997 ) $ 8,551 $ ( 282 )
In the third quarter of 2024, we recorded $ 10.5 million impairment related to the Fred Meyer contract and relationship intangible asset due to the decision to close certain Fred Meyer stores as part of our store fleet review in fiscal year 2024.
We intend to maintain our Fred Meyer contracts and relationships intangible asset. We amortized $ 0.7 million, $ 1.4 million, and $ 1.6 million in 2025, 2024, and 2023, respectively.
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Aggregate amortization expense is included in Depreciation and amortization in the accompanying Consolidated Statements of Operations. Aggregate future estimated amortization expense is shown in the following table:
Fiscal Year In thousands
2026 $ 677
2027 677
2028 677
2029 677
2030 677
Thereafter 4,169
$ 7,554
5. Debt
Our debt consists of the following:
In thousands As of
January 3, 2026 As of
December 28, 2024
2025 Notes, due May 15, 2025 $ — $ 84,774
Term Loan A, due June 13, 2028 237,625 254,188
Debt before unamortized discount and issuance costs 237,625 338,962
Unamortized discount and issuance costs - 2025 Notes — ( 191 )
Unamortized discount and issuance costs - Term Loan A ( 1,137 ) ( 1,602 )
Debt less debt discount and issuance costs 236,488 337,169
Less current maturities ( 13,250 ) ( 98,024 )
Long-term debt - noncurrent portion 223,238 239,145
Finance lease obligations 9,422 12,833
Less current maturities ( 3,333 ) ( 3,368 )
Long-term debt and finance lease obligations, less current portion, discount, and issuance costs $ 229,327 $ 248,610
2025 Notes
In May 2020, we completed the issuance of $ 402.5 million in aggregate principal amount of 2.50 % convertible senior notes due on May 15, 2025 (the “2025 Notes”). The Company recognized an extinguishment loss of $ 0.6 million related to $ 100 million aggregate principal repurchases in fiscal year 2023. The Company recognized an extinguishment gain of $ 0.9 million related to $ 217.7 million aggregate principal repurchases in fiscal year 2024. During fiscal year 2025, the Company fully repaid the remaining outstanding balance.
We recognized the following in Interest expense, net related to the 2025 Notes:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Contractual interest expense $ 802 $ 5,443 $ 9,747
Amortization of issuance costs $ 191 $ 1,282 $ 2,293
Credit Agreement
On June 13, 2023, the Company entered into a second joinder and restatement agreement (“Second Restatement Agreement”) to amend and restate the original credit agreement, dated as of July 18, 2019 to, among other things, (i) establish new Term Loan A (“Term Loan A”) to repay all principal, interest, fees and other amounts outstanding (other than contingent obligations) under the original credit agreement, (ii) establish new Revolving Loans (the “Revolving Loans”), (iii) provide for a Secured Overnight Financing Rate, with a credit spread adjustment of 10 basis points for all interest periods and a SOFR floor of 0.00 % per annum, and (iv) as set forth below, modify the applicable margins of Term Loan A and the revolving credit facility.
Term Loan A is amortized in equal calendar quarterly installments at a rate of 5.00 % per calendar year since September 30, 2023.
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Following the delivery of the financial statements for the period ending on September 30, 2023, the Applicable Margins for the Loans are based on NVI’s total leverage ratio as follows:
Consolidated Total Debt to Consolidated EBITDA Ratio
Term SOFR Rate
ABR Rate (1)
> 2.50 :1.00
2.25 % 1.25 %
≤ 2.50 :1.00 but > 1.75 :1.00
2.00 % 1.00 %
≤ 1.75 :1:00 but > 0.75 :1.00
1.75 % 0.75 %
≤ 0.75 :1:00
1.50 % 0.50 %
(1) ABR = Alternate Base Rate
In connection with the Second Restatement Agreement, we deferred $ 2.0 million of debt issuance costs related to the revolving credit facility in Other assets and $ 0.9 million of debt issuance costs related to the Term Loan A in Long-term debt and finance lease obligations, less current portion and debt discount on our Consolidated Balance Sheets. We will amortize these costs over the term of the amended credit agreement. We wrote off previously unamortized debt issuance costs of $ 0.2 million in Interest expense (income), net during fiscal year 2023 related to lenders who were parties to the original credit agreement but are not parties to the Second Restatement Agreement. We recognized $ 0.2 million of other refinancing fees in Interest expense (income), net during fiscal year 2023.
On August 9, 2024, NVI and certain other subsidiaries of the Company entered into a Joinder Agreement (the “Joinder Agreement”) to establish incremental term loans in an aggregate principal amount of $ 115.0 million, provided to NVI on August 9, 2024. These incremental term loans under the Joinder Agreement have the same terms as the existing term loans under the Credit Agreement. The additional borrowings resulted in $ 0.9 million of fees deferred on the Consolidated Balance Sheets during the fiscal year ended December 28, 2024.
The Second Restatement Agreement contains customary affirmative covenants, negative covenants, and events of default substantially comparable to the original credit agreement. The agreement includes covenants that, among other things, limit NVI’s ability to incur additional debt, create liens against assets, make acquisitions, pay dividends or distributions on its stock, merge or consolidate with another entity and transfer or sell assets. We were in compliance with all covenants related to our long-term debt as of January 3, 2026.
As of January 3, 2026, the Company had $ 293.3 million of availability under its $ 300.0 million revolving credit facility net of $ 6.7 million in outstanding letters of credit.
Scheduled annual maturities of debt are as follows:
Fiscal Year In thousands
2026 $ 13,250
2027 13,250
2028 211,125
$ 237,625
6. Stock Incentive Plans
In connection with the initial public offering of our common stock (the “IPO”), on October 23, 2017, the Company’s Board of Directors adopted, and its stockholders approved, the National Vision Holdings, Inc. 2017 Omnibus Incentive Plan (the “2017 Omnibus Incentive Plan”). The total number of shares of common stock originally issuable under the 2017 Omnibus Incentive Plan was 4,000,000 . On June 12, 2024, the Company’s stockholders approved the amendment and restatement of the 2017 Omnibus Incentive Plan, increasing the number of shares of common stock authorized for issuance by an additional 5,600,000 shares. The plan authorizes the grant of stock options, stock appreciation rights, restricted stock awards (“RSAs”), RSUs, PSUs, other equity-based awards and other cash-based awards to our associates, non-employee directors, officers, consultants and advisers. In 2014, our Board of Directors and stockholders of the Company approved the 2014 Stock Incentive Plan for Key Employees of National Vision Holdings, Inc. (formerly known as Nautilus Parent, Inc.) and its subsidiaries (the “2014 Stock Incentive Plan”). There were 10,988,827 stock options authorized for issuance pursuant to the 2014 Stock Incentive Plan. All stock awards under these plans vest through continued service. All options under these plans have a contractual life of 10 years.
The Company also provides associates the opportunity to purchase Company common shares through the Associate Stock Purchase Plan (the “ASPP”), which the Company’s Board of Directors adopted and its stockholders approved on June 6, 2018. The ASPP provides that up to 850,000 shares of common stock, at par value of $ 0.01 per share, may be offered and issued under the ASPP.
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The following table summarizes stock compensation expense under the Company’s plans, which is included in SG&A in the accompanying Consolidated Statements of Operations:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Stock options $ — $ 123 $ 740
RSUs and PSUs 23,565 16,457 18,312
Associate stock purchase plan 121 128 151
Pre-tax stock-based compensation expense $ 23,686 $ 16,708 $ 19,203
Income tax benefit ( 5,972 ) ( 4,212 ) ( 4,841 )
After-tax stock-based compensation expense $ 17,714 $ 12,496 $ 14,362
RSUs and PSUs
Unrecognized compensation cost ( in thousands )
$ 26,534
Expected remaining weighted-average period of expense recognition (in years) 1.84
Service-based options
The following tables summarize service-based stock option activity. No service-based options were granted in fiscal years 2025, 2024, and 2023.
Number of Options Outstanding (In thousands) Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (In thousands) ($)
Outstanding options at December 28, 2024 549 $ 29.98 4.13 $ —
Exercised ( 105 ) $ 21.19
Forfeited ( 39 ) $ 37.29
Outstanding options at January 3, 2026 405 $ 31.54 3.36 $ 1,057
Vested and exercisable at January 3, 2026 405 $ 31.54 3.36 $ 1,057
In thousands except per share values Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Fair value of options vested $ — $ 635 $ 1,251
Aggregate intrinsic value of options exercised $ 581 $ 76 $ 147
Performance-based options
The following table summarizes performance-based stock option activity:
Number of Options Outstanding (In thousands) Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (In thousands) ($)
Outstanding options at December 28, 2024 49 $ 15.74 2.57 $ —
Outstanding options at January 3, 2026 49 $ 15.74 1.55 $ 502
Vested and exercisable at January 3, 2026 49 $ 15.74 1.55 $ 502
There were no grants, no vests and no exercises of performance-based options during fiscal years 2025, 2024, and 2023.
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The following tables summarize RSU and PSU awards activity:
RSUs
(In thousands) Weighted average grant date fair value ($) PSUs
(In thousands) Weighted average grant date fair value ($)
Outstanding at December 28, 2024 1,353 $ 20.97 861 $ 24.61
Granted 1,429 $ 14.19 483 $ 14.07
Vested ( 670 ) $ 22.25 — $ —
Forfeited ( 211 ) $ 17.45 ( 325 ) $ 27.22
Outstanding at January 3, 2026 1,901 $ 15.81 1,019 $ 18.78
Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
RSUs
Weighted average grant date fair value of RSUs granted $ 14.19 $ 18.03 $ 22.65
Total fair value of RSUs vested (In thousands) $ 14,914 $ 12,755 $ 12,084
PSUs
Weighted average grant date fair value of PSUs granted $ 14.07 $ 22.19 $ 22.35
Total fair value of PSUs vested (In thousands) $ — $ 4,070 $ 3,852
Restricted stock units (RSUs)
Most RSUs vest in three equal annual installments on the first, second and third anniversary of the grant date. The RSUs outstanding as of January 3, 2026 have $ 49.3 million intrinsic value. Non-employee directors were granted RSUs in fiscal year 2025 that fully vest on the first anniversary of the grant date.
Performance stock units (PSUs)
PSUs are settled after the end of a three-year performance period (i.e., cliff vesting), which begins on the first day of the grant year and are based on the Company’s achievement of certain performance targets. The performance stock units outstanding as of January 3, 2026 have $ 26.4 million intrinsic value. While the PSU amounts shown in the tables above reflect achievement at target, the number of PSUs ultimately vested will be based on a comparison of certified performance results to predefined performance criteria that include threshold, target and maximum attainment levels.
In 2025, the Company granted PSUs that vest based on the Company’s relative total shareholder return (“TSR”) compared to a defined peer group over a three‑year performance period. The grant‑date fair value of PSUs based on TSR is estimated using a Monte Carlo simulation model. The key assumptions used in the Monte Carlo valuation include: (i) expected volatility of 57.1 %, based on the Company’s three‑year daily historical volatility as of the grant date; (ii) a risk‑free interest rate of 3.97 %, derived from U.S. Treasury constant‑maturity yields on the grant date; (iii) a correlation assumption calculated using three years of daily share price data for the Company and the peer group as of the grant date; and (iv) an expected dividend yield of zero.
Associate Stock Purchase Plan
Under the ASPP, eligible associates receive a 10 % discount from the market trading value of common stock of the Company at the time of purchase. Participants may contribute to the ASPP, not to exceed $ 25,000 under the ASPP in any calendar year. During fiscal year 2025, the amount of shares issued to eligible participants through the ASPP was not material.
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7. Income taxes
The income tax provision (benefit) consists of:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Current income tax:
Federal $ 3,190 $ 9,333 $ 8,278
State 2,502 2,123 3,717
Deferred income tax:
Federal 5,839 ( 8,869 ) ( 3,878 )
State 550 ( 1,106 ) ( 2,111 )
Income tax provision (benefit) from continuing operations $ 12,081 $ 1,481 $ 6,006
Our income tax provision (benefit) differs from the amounts computed by multiplying earnings (loss) before income taxes by the statutory federal income tax rate.
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Earnings (loss) from continuing operations before income taxes $ 41,681 $ ( 25,684 ) $ 9,552
Federal income tax provision at statutory rate 8,753 21.0 % ( 5,394 ) 21.0 % 2,006 21.0 %
State income tax provision, net of federal income tax (a)
2,422 5.8 % 895 ( 3.5 ) % 1,686 17.7 %
Tax credits:
Work opportunity tax credit
( 899 ) ( 2.2 ) % ( 747 ) 2.9 % ( 1,143 ) ( 12.0 ) %
Increase (decrease) in deferred tax asset valuation allowance ( 912 ) ( 2.2 ) % ( 1,272 ) 5.0 % 2,238 23.4 %
Nontaxable or nondeductible items:
Executive compensation limitation 623 1.5 % 994 ( 3.9 ) % 354 3.7 %
Goodwill impairment — — % 3,539 ( 13.8 ) % — — %
Tax provision (benefit) of equity-based compensation deductions 876 2.1 % 1,240 ( 4.8 ) % 1,133 11.9 %
Meals and entertainment 327 0.8 % 369 ( 1.4 ) % 433 4.5 %
Other 14 — % ( 22 ) 0.1 % ( 64 ) ( 0.7 ) %
Other adjustments:
Net operating loss limitation 467 1.1 % — — % — — %
Other, net 410 1.1 % 1,879 ( 7.4 ) % ( 637 ) ( 6.6 ) %
Net income tax provision (benefit) from continuing operations / Effective tax rate
$ 12,081 29.0 % $ 1,481 ( 5.8 ) % $ 6,006 62.9 %
Note: Percentages reflect line item as a percentage of earnings (loss) from continuing operations before income taxes, adjusted for rounding.
(a) State taxes in Texas, Florida, California, New Jersey and Illinois made up the majority (greater than 50 percent) of the tax effect in this category.
Incomes taxes paid (net of refunds) are as follows:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Federal $ 17,844 $ 4,200 $ 2,795
State
3,302 2,132 4,776
Total income taxes paid
$ 21,146 $ 6,332 $ 7,571
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Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Texas *
$ 606 578
* Jurisdiction below the threshold for the period presented.
The sources of the differences between the financial accounting and tax bases of our assets and liabilities that give rise to the deferred tax assets and deferred tax liabilities and the tax effects of each are as follows:
In thousands As of
January 3, 2026 As of
December 28, 2024
Deferred tax assets:
NOL carry-forwards $ 6,454 $ 8,017
Credit carryforwards 289 274
Deferred revenue 6,126 5,999
Accrued expenses and reserves 12,425 13,811
Loss on equity and other investments 878 886
Stock-based compensation 7,936 6,191
Operating lease liabilities 114,237 120,990
Subtotal 148,345 156,168
Valuation allowances ( 5,458 ) ( 5,961 )
Total net deferred tax assets 142,887 150,207
Deferred tax liabilities:
Depreciation of property and equipment ( 58,634 ) ( 57,150 )
Amortization of intangible assets ( 65,051 ) ( 65,168 )
Right of use asset ( 98,716 ) ( 102,446 )
Other ( 3,058 ) ( 3,352 )
Total deferred tax liabilities ( 225,459 ) ( 228,116 )
Net deferred tax liabilities $ ( 82,572 ) $ ( 77,909 )
As of fiscal year-end 2025, our consolidated VIEs had $ 9.8 million of U.S. federal NOL carry-forwards available to reduce future federal income taxes, all of which have no expiration date. $ 6.7 million of these NOL carry-forwards ($ 1.4 million tax-effected) carry a full valuation allowance because it is more likely than not that a future tax benefit will not be realized. In addition, we have NOL carry-forwards in varying amounts and with differing expiration dates in multiple states in which we operate.
For the fiscal year end 2025, we carry various state tax credits totaling $ 0.3 million that are available to offset certain future taxes. These state credits carry a valuation allowance of $ 0.1 million for the portion that we do not expect to be able to utilize in future periods.
We have a $ 0.9 million deferred income tax asset for capital losses associated with the losses realized on the sale of our equity method non-consolidated investee. We do not expect to generate significant capital gains in the near future. Therefore, we believe it is more likely than not that we will not realize a tax benefit for the majority of these deferred income tax assets. Accordingly, we have established a full valuation allowance against this deferred asset.
As a result of our utilization of NOL carry-forwards to reduce or eliminate subsequent years’ tax obligations, our federal and a substantial number of our state income tax returns for fiscal years 2001 through 2025 remain open for examination by the tax authorities.
The Company evaluates uncertain tax positions using a “more-likely-than-not” threshold and recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by tax authorities. The Company evaluates uncertain tax positions on a quarterly basis and considers various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in-process audit activities and changes in facts or circumstances related to a tax position.
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In July 2025 the One Big Beautiful Bill Act (the "Tax Act") was enacted, introducing a series of corporate tax changes in the U.S. including 100% bonus depreciation on qualified property. The impacts of the Tax Act are reflected in our results for the fiscal year 2025, and there was no material impact to our income tax expense or effective tax rate. Certain provisions decreased cash taxes paid in the current fiscal year and may change the timing of cash tax payments in future periods.
8. Revenue from Contracts with Customers
Revenues Recognized at a Point in Time
Owned & Host
Within our Owned & Host segment, product revenues include sales of prescription and non-prescription eyewear, contact lenses and related accessories to retail customers.
For sales of in-store non-prescription eyewear and related accessories, we recognize revenue at the point of sale. For sales of prescription eyewear, we recognize revenue when the performance obligations are satisfied, which generally occurs upon delivery and customer acceptance of the product. Within our Owned & Host segment services and plans revenues, eye exam services sold on a stand-alone basis are also recognized at the point of sale which occurs immediately after the exam is performed.
Other revenues
Our dedicated e-commerce website sells contact lenses and optical accessory products to retail customers, and recognizes revenue when products have been delivered to the customer. FirstSight issues individual vision plans in connection with our America’s Best operations in California.
Revenues Recognized Over Time
Within our Owned & Host segment, services and plans revenues include revenues from product protection plans (i.e. warranties), eye care club memberships and HMO vision plan fees. We offer extended warranty plans in our Owned & Host segment that generally provide repair and replacement of eyeglasses for primarily a one-year term after purchase. We recognize service revenue under these programs on a straight-line basis over the warranty or service period which is consistent with our efforts expended to satisfy the obligation. We offer three-year eyecare club memberships in our Owned & Host segment to our contact lens customers. For these programs we apply the portfolio approach of recognizing revenues of contracts with similar characteristics and use estimates and assumptions that reflect the size and composition of the portfolio of contracts. We selected the portfolio approach because our historical club membership data demonstrate that our club customers behave similarly, such that the difference between the portfolio approach and calculating revenue of each individual contract is not material. We recognize revenue across the contract portfolio based on the value delivered to the customers relative to the remaining services promised under the programs. We determine the value delivered based on the expected timing and amount of customer usage of benefits over the terms of the contracts. The unamortized portion of amounts we collect in advance for these services and plans are reported as Deferred revenue (current and noncurrent portions) in the accompanying Consolidated Balance Sheets.
The following disaggregation of revenues depicts our revenues based on the timing of revenue recognition:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Revenues recognized at a point in time $ 1,859,291 $ 1,696,735 $ 1,631,030
Revenues recognized over time 128,197 126,585 125,341
Total net revenue $ 1,987,488 $ 1,823,320 $ 1,756,371
Refer to Note 15. “Segment Reporting” for the Company’s disaggregation of net revenue by reportable segment/category and by product type. As our operating segments are aligned by similar economic factors, trends and customers, the reportable segment view best depicts how the nature, amount and uncertainty of revenue and cash flows are affected by economic factors.
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9. Deferred Revenue
The following depicts a roll-forward of deferred revenue:
Fiscal Year 2025
In thousands Product Protection Plans Eye Care
Clubs Total
Beginning of the year $ 35,700 $ 48,889 $ 84,589
Sold 75,120 55,565 130,685
Revenue recognized ( 73,565 ) ( 54,632 ) ( 128,197 )
End of year $ 37,255 $ 49,822 $ 87,077
Current $ 36,948 $ 27,612 $ 64,560
Noncurrent 307 22,210 22,517
$ 37,255 $ 49,822 $ 87,077
Fiscal Year 2024
In thousands Product Protection Plans Eye Care
Clubs Total
Beginning of the year $ 36,419 $ 47,907 $ 84,326
Sold 72,135 54,713 126,848
Revenue recognized ( 72,854 ) ( 53,731 ) ( 126,585 )
End of year $ 35,700 $ 48,889 $ 84,589
Current $ 35,409 $ 27,098 $ 62,507
Noncurrent 291 21,791 22,082
$ 35,700 $ 48,889 $ 84,589
Unsatisfied Performance Obligations (Contract Liabilities)
During fiscal years 2025 and 2024, we recognized $ 62.7 million and $ 62.8 million, respectively, of deferred revenues outstanding at the beginning of each respective period.
Deferred revenue recorded as of the end of fiscal year 2025 is expected to be reflected in future operating results as follows:
Fiscal Year In thousands
2026 $ 64,560
2027 17,156
2028 5,361
$ 87,077
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10. Leases
Information related to our leases is presented below:
In thousands As of
January 3, 2026 As of
December 28, 2024
Type Classification
ASSETS
Finance Property and equipment, net (a)
$ 5,956 $ 8,258
Operating Right of use assets (b)
394,896 408,589
Total leased assets $ 400,852 $ 416,847
LIABILITIES
Current Liabilities:
Finance Current maturities of long-term debt and finance lease obligations $ 3,333 $ 3,368
Operating Current operating lease obligations (c)
90,313 99,694
Other noncurrent liabilities:
Finance Long-term debt and finance lease obligations, less current portion and debt discount 6,089 9,465
Operating Noncurrent operating lease obligations 358,377 366,335
Total lease liabilities $ 458,112 $ 478,862
As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the net present value of minimum lease payments. We used the incremental borrowing rate on December 30, 2018 for operating leases that commenced prior to that date.
_________
(a) Finance lease assets are recorded net of accumulated amortization of $ 30.3 million and $ 28.0 million as of January 3, 2026 and December 28, 2024, respectively.
(b) TIA and deferred rent are treated as reductions of lease payments used to measure ROU assets in the accompanying Consolidated Balance Sheets as of January 3, 2026 and December 28, 2024.
(c) Current operating lease liabilities are measured net of TIA receivables of $ 6.5 million and $ 4.6 million as of January 3, 2026 and December 28, 2024, respectively.
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Operating lease cost
Fixed lease cost (a)
$ 109,463 $ 103,547 $ 96,215
Variable lease cost (b)
40,104 37,733 36,133
Sublease income (c)
( 1,255 ) ( 1,410 ) ( 1,263 )
Finance lease cost
Amortization of finance lease assets 2,194 2,370 3,061
Interest on finance lease liabilities 982 1,233 1,675
Net lease cost $ 151,488 $ 143,473 $ 135,821
(a) Includes short-term leases, which are immaterial.
(b) Includes costs for insurance, real estate taxes and common area maintenance expenses, which are variable as well as lease costs above minimum thresholds for Fred Meyer stores and lease costs for Military stores.
(c) Income from sub-leasing of stores includes rental income from operating lease properties to independent optometrists.
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Lease Term and Discount Rate As of
January 3, 2026 As of
December 28, 2024
Weighted average remaining lease term (months)
Operating leases 70 71
Finance leases 37 48
Weighted average discount rate (a)
Operating leases 5.4 % 5.1 %
Finance leases (b)
10.2 % 10.4 %
(a) The discount rate used to determine the lease assets and lease liabilities was derived upon considering (i) incremental borrowing rates on our term loan and revolving credit facility; (ii) Term SOFR margins for issuers of similar credit rating; and (iii) effect of collateralization. As a majority of our leases are five -year and 10 -year leases, we determined a lease discount rate for such tenors and determined this discount rate is reasonable for leases that were entered into during the period.
(b) The discount rate on finance leases is higher than operating leases because the present value of minimum lease payments was higher than the fair value of leased properties for certain leases entered into prior to adoption of ASC 842. The discount rate differential for those leases is not material to our results of operations.
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Other Information
Operating cash outflows - operating leases $ 128,268 $ 113,113 $ 103,562
Right of use assets acquired under operating leases $ 80,740 $ 96,170 $ 111,792
The following table summarizes the maturity of our lease liabilities as of January 3, 2026:
In thousands Operating Leases (a)
Finance Leases (b)
Fiscal Year
2026 $ 110,992 $ 4,249
2027 102,659 3,370
2028 80,021 1,959
2029 70,742 612
2030 53,573 273
Thereafter 111,690 136
Total lease liabilities 529,677 10,599
Less: Interest 80,987 1,177
Present value of lease liabilities (c)
$ 448,690 $ 9,422
_________
(a) Operating lease payments include $ 19.7 million related to options to extend lease terms that are reasonably certain of being exercised.
(b) Finance lease payments include no options to extend lease terms that are reasonably certain of being exercised.
(c) The present value of lease liabilities excludes $ 21.0 million of legally binding minimum lease payments for leases signed but not yet commenced.
11. Commitments and Contingencies
Contractual Commitments
As of January 3, 2026, the Company had contractual commitments of approximately $ 174.3 million consisting of agreements for merchandise purchases, technology, and advertising.
Warranty Costs
The Company records an allowance for the estimated amount of future warranty costs when the related revenue is recognized, which is recorded in Other payables and accrued expenses on the accompanying Consolidated Balance Sheets. Expense associated with warranty costs is presented in Cost of services and plans in the accompanying Consolidated Statements of Operations and Comprehensive (Loss) Income. Estimated future warranty costs are primarily based on historical experience of identified warranty claims. However, there can be no assurance that future warranty costs will not exceed historical amounts. The following details the activity in our product warranty liability accounts:
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In thousands Fiscal Year 2025 Fiscal Year 2024
Beginning of year balance $ 2,565 $ 2,463
Accrued obligation 38,378 35,325
Claims paid ( 38,076 ) ( 35,223 )
End of year balance $ 2,867 $ 2,565
401(k) Plan
The Company sponsors a 401(k) plan into which associates may defer a portion of their wages. In fiscal 2025, the Company increased its employer matching contribution from 50 % of the first 3 % of participant contributions to 50 % of the first 4 % of participant contributions. The expense for the plan was $ 9.9 million, $ 7.5 million, and $ 7.2 million in fiscal years 2025, 2024, and 2023, respectively. Expense associated with our 401(k) plan is presented in SG&A in the Consolidated Statements of Operations and Comprehensive (Loss) Income.
Legal Proceedings
From time to time, the Company is involved in various legal proceedings incidental to its business. Because of the nature and inherent uncertainties of litigation, we cannot predict with certainty the ultimate resolution of these actions and, should the outcome of these actions be unfavorable, the Company’s business, financial position, results of operations or cash flows could be materially and adversely affected.
The Company reviews the status of its legal proceedings and records a provision for a liability when it is considered probable that a liability has been incurred and the amount of the loss can be reasonably estimated. This review is updated periodically as additional information becomes available. If either or both of the criteria are not met, we reassess whether there is at least a reasonable possibility that a loss, or additional losses, may be incurred. If there is a reasonable possibility that a loss may be incurred, we disclose the estimate of the amount of the loss or range of losses, or that an estimate of loss cannot be made. The Company expenses its legal fees as incurred.
We are currently and may in the future become subject to various claims and pending or threatened lawsuits in the ordinary course of our business.
On September 23, 2022, we were served with notice of a lawsuit filed by a former employee in California state court alleging, on behalf of a proposed class of employees, several violations of California wage and hour laws. On December 9, 2022, the case was removed to the federal District Court for the Northern District of California. On January 18, 2023, we were served with a related representative action filed in California state court pursuant to California’s Private Attorneys General Act (“PAGA”). We filed an answer to this action on February 17, 2023. On September 29, 2023, the state court set the PAGA action for trial on October 7, 2024. The parties attended mediation on March 11, 2024, but a resolution of the matter was not reached at that time. Following mediation, the parties agreed to a settlement of all claims alleged by the named plaintiff on behalf of himself and all putative class members and other aggrieved employees. The parties agreed to move the federal and state court actions to state court for review of the settlement terms agreed to by the parties. The Sacramento County state court entered preliminary approval of the settlement on March 21, 2025, and on July 29, 2025, the Court filed its order granting final approval of the settlement and entering judgment in accordance with the settlement agreement. The deadline for any appeal of the final approval and judgment expired on September 27, 2025 and the settlement agreement became effective at that time. On October 10, 2025, the Company paid a total of $ 4.6 million as the gross settlement fund in accordance with the settlement agreement.
On January 27, 2023, a purported class action complaint was filed in federal court in the Northern District of Georgia against the Company and two of the Company’s officers (the “Securities Class Action”). The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 thereunder, for materially false and misleading statements made between May 2021 and May 2022. The complaint seeks unspecified damages as well as equitable relief. On March 28, 2023, the original plaintiff, City of Southfield General Employees Retirement System, and a new plaintiff, International Union of Operating Engineers, Local No. 793, Members Pension Benefit Trust of Ontario, filed a lead plaintiff motion, seeking to be appointed co-lead plaintiffs. On April 3, 2023, the Company along with its named officers filed a motion to dismiss the complaint. On May 19, 2023, the court granted the lead plaintiff motion. On June 30, 2023, the plaintiffs filed an amended complaint, which added a claim under Section 20A of the Exchange Act and extended the alleged class period to February 28, 2023. On August 21, 2023, the Company filed a motion to dismiss the amended complaint. The plaintiffs filed their response in opposition to this motion on October 5, 2023. On March 30, 2024, the court granted the Company’s motion and dismissed the amended complaint with prejudice. On April 29, 2024, the plaintiffs filed a motion for reconsideration of the order granting the motion to dismiss. The Company and named officers filed a response in opposition to the plaintiffs’ motion for reconsideration on May 13, 2024, and the plaintiffs then filed a reply in support of their motion on May 28, 2024. The court entered an order denying the motion for reconsideration on March 24, 2025, and no appeal was filed by the plaintiff.
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On May 23, 2024, a stockholder derivative complaint was filed by a stockholder in the Delaware Court of Chancery, purportedly on behalf of the Company (the “Derivative Action”). The Derivative Action is based on the same alleged facts and circumstances as the Securities Class Action and names certain of the Company’s officers, including our Chief Executive Officer and former Chief Operating Officer, and the Company’s directors who were members of the Company’s Board of Directors during the relevant time period as defendants. The Derivative Action alleges claims for breach of fiduciary duty, unjust enrichment, and violations of the Exchange Act and seeks to recover damages on behalf of the Company. On July 24, 2024, the Company along with the named defendants, filed a motion to dismiss the complaint. On September 9, 2024, the plaintiff filed an amended complaint. Defendants filed a motion to dismiss the amended complaint on October 31, 2024. The plaintiff filed an opposition to the motion to dismiss on December 16, 2024, and the defendants filed a reply brief on January 15, 2025. Oral argument on the motion to dismiss was held on October 28, 2025. On February 11, 2026, the court granted the motion to dismiss. The plaintiff has 30 days from the date of the order to file an appeal. The defendants dispute the allegations made by the plaintiff and intend to vigorously defend the litigation should an appeal be pursued.
On September 26, 2025, the Company attended a pre-trial mediation in a lawsuit filed in Alabama state court by a patient who claims to have been injured due to medical negligence during eye exams performed by an optometrist employed by the Company. The parties failed to reach an agreement at mediation. On October 3, 2025, the parties reached a post-mediation agreement for the Company to pay $ 1.8 million, net of anticipated recoveries from professional liability insurance, in consideration for plaintiff dismissing the lawsuit and releasing all claims against the Company. The parties executed a settlement agreement on October 21, 2025, after which the Company and its professional liability insurance carrier issued payment according to the terms of the agreement, and the case was dismissed by the court on December 1, 2025. The litigation settlement is recognized in Other payables and accrued expenses in the Condensed Consolidated Balance Sheets as of January 3, 2026 and in SG&A in the Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended January 3, 2026.
12. Fair Value Measurement
General
The Company uses a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s own market assumptions.
The Company is required to measure certain assets and liabilities at fair value or disclose the fair values of certain assets and liabilities recorded at cost. Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated assuming the transaction occurs in the principal or most advantageous market for the asset or liability and includes consideration of non-performance risk and credit risk of both parties. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value. These tiers include:
• Level 1 - Valuation inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
• Level 2 - Valuation inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in inactive markets, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the instruments.
• Level 3 - Valuation inputs are unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are determined using model-based techniques that include discounted cash flow models and similar techniques.
The fair value estimates of financial instruments are not necessarily indicative of the amounts we might pay or receive in actual market transactions. The use of different market assumptions and/or estimation methodologies may have a material impact on the estimated fair value amounts.
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Recurring fair value measurements
Interest Rate Derivatives
We recognize as assets or liabilities at fair value the estimated amounts we would receive or pay upon a termination of interest rate derivatives prior to their scheduled expiration dates. The fair value is based on information that is model-driven based on regression analysis and whose inputs were observable (Level 2 inputs) such as Term SOFR forward rates. See Note 13. “Interest Rate Derivatives” for further details.
Convertible Promissory Note
On December 17, 2024, the Company purchased $ 1.3 million principal amount of a convertible promissory note issued by a private company. During fiscal year 2025, the Company purchased an additional $ 1.2 million in the same instrument. The convertible promissory note is an investment that will convert to an equity stake in the private company upon a predetermined conversion event and is also convertible by us under certain circumstances. The Company elected the fair value option in accordance with accounting guidance for financial instruments to record the convertible promissory note. The fair value option allows an entity to account for the entire financial instrument at fair value with subsequent changes in fair value recognized in earnings through the consolidated statements of operations at each reporting date. The Company elected the fair value option to account for the convertible promissory note because the Company believes it reflects the fair value of the note receivable and embedded features. As of January 3, 2026, the Company estimated the fair value of the convertible promissory note to be $ 2.5 million; this investment is included in Other assets on the Consolidated Balance Sheets and in Other in the investing section of the Consolidated Statements of Cash Flows. Refer to Note 1. “Business and Significant Accounting Policies” for information on equity investments in this entity.
Non-recurring fair value measurements
These non-recurring fair value measurements are classified as Level 3 measurements in the fair value hierarchy. A decrease in the estimated cash flows would lead to a lower fair value measurement, as would an increase in the discount rate. Asset impairment charges are reflected in Asset impairment in the Consolidated Statements of Operations and Comprehensive (Loss) Income.
Long-lived and Right of Use Store Assets
We recognized impairments of $ 2.0 million, $ 10.1 million and $ 2.7 million in fiscal years 2025, 2024, and 2023, respectively, related to our store assets. The store asset impairment charges is related to our Owned & Host segment and is driven by lower than projected customer sales volume in certain stores. The cash flows used in estimating the fair value of ROU and store assets were discounted using market rates from 10 % to 10.5 %. The estimated remaining fair value of the long-lived and ROU assets impaired during fiscal years 2025, and 2024, was $ 1.3 million, and $ 5.6 million, respectively; the estimated remaining fair values include amounts estimated at various dates during the related fiscal years. Substantially all of the remaining fair value of the impaired store assets in fiscal years 2025 and 2024 represents the fair value of ROU assets.
Refer to Note 1. “Business and Significant Accounting Policies” and Note 4. “Goodwill and Intangible Assets” for more details on impairment charges.
Additional fair value information
Cash Equivalents and Restricted Cash
The carrying amount of cash equivalents and restricted cash approximates fair value due to the short-term maturity of the instruments. All cash and cash equivalents are denominated in U.S. currency.
Accounts Receivable, Net
The carrying amount of accounts receivable approximates fair value due to the short-term nature of those items and the effect of credit losses.
Accounts Payable and Other Payables and Accrued Expenses
The carrying amounts of accounts payable and other payables and accrued expenses approximate fair value due to the short-term nature of those items.
Term Loan A and Revolving Loans
Since the borrowings under the $ 237.6 million outstanding principal Term Loan A and $ 300.0 million aggregate principal Revolving Loans utilize variable interest rate setting mechanisms such as Term SOFR, the fair values of these borrowings are deemed to approximate the carrying values. We also considered the effect of our own credit risk on the fair values of our Term Loan A and Revolving Loans. Refer to Note 5. “Debt” for more information on these borrowings.
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13. Interest Rate Derivatives
In December 2025, we entered into an interest rate swap agreement to help manage interest rate exposure by economically converting a portion of our variable-rate debt to fixed-rate debt. Under the interest rate swap agreement, we receive a floating interest rate of the one-month SOFR and pay a fixed interest rate of 3.43 % on $ 100 million of notional amount. We designated the interest rate swap as the hedging instrument in an effective hedge accounting relationship.
We recognized (gains) losses on the change in fair value of the interest rate swap of $ 0.2 million in Other comprehensive income (loss) during fiscal year 2025. An immaterial amount of net gain was reclassified from Accumulated other comprehensive income (loss) into Interest expense, net during fiscal year 2025.
We were party to an interest rate collar to offset the variability of cash flows in Term SOFR-indexed debt interest payments. The interest rate collar matured on July 18, 2024.
We recognized (gains) losses on the change in fair value of the interest rate collar of $( 0.5 ) million and $( 2.3 ) million in Interest expense , net during fiscal years 2024 and 2023, respectively.
Cash flows related to derivatives are included in the operating section of the Consolidated Statements of Cash Flows and were immaterial.
As of January 3, 2026, the Company expects to reclassify an immaterial amount of unrealized losses on the derivative instruments, net of tax, from AOCL into earnings in the next 12 months. See Note 16. “Accumulated Other Comprehensive Income” for further details.
Our cash flow hedge position related to derivatives designated as hedging instruments under ASC 815 is as follows:
In thousands
Balance Sheet Classification
As of
January 3, 2026
Current portion
Other Payables and Accrued Expenses
$ 45
Non-current portion
Other Liabilities
116
Total derivative liabilities designated as hedging instruments
$ 161
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14. Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income by the weighted average shares outstanding for the period and includes the dilutive impact of potential new shares issuable upon vesting and exercise of stock options, vesting of restricted stock units, and assumed conversion of the 2025 Notes. Potential shares of common stock are excluded from the computation of diluted EPS if their effect is anti-dilutive.
The 2025 Notes were fully settled in 2025. Diluted EPS for fiscal year 2024 and 2023 included the potential impact of the 2025 Notes using the if-converted method; the number of dilutive shares is based on the initial conversion rate associated with the 2025 Notes. A reconciliation of the numerators and denominators of the basic and diluted EPS calculations is as follows:
In thousands, except EPS Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Numerator
Income (loss) from continuing operations, net of tax $ 29,600 $ ( 27,165 ) $ 3,546
Income (loss) from discontinued operations, net of tax — ( 1,334 ) ( 69,447 )
Net income (loss) $ 29,600 $ ( 28,499 ) $ ( 65,901 )
Denominator
Weighted average shares outstanding, Basic 79,131 78,592 78,313
Dilutive effect of share-based awards (1)
1,445 — 283
Weighted average shares outstanding, Diluted 80,576 78,592 78,596
Basic earnings (loss) per share
Continuing operations $ 0.37 $ ( 0.35 ) $ 0.05
Discontinued operations $ — $ ( 0.02 ) $ ( 0.89 )
Total $ 0.37 $ ( 0.36 ) $ ( 0.84 )
Diluted earnings (loss) per share
Continuing operations $ 0.37 $ ( 0.35 ) $ 0.05
Discontinued operations $ — $ ( 0.02 ) $ ( 0.88 )
Total $ 0.37 $ ( 0.36 ) $ ( 0.84 )
Anti-dilutive securities excluded from diluted weighted average common shares 712 8,771 12,513
(1) Represents the dilutive impact of RSUs, PSUs and stock options
Some of the EPS totals in the table above may not foot due to rounding differences
15. Segment Reporting
The Company’s operating segments were determined on the same basis as used by the Chief Operating Decision Maker (“CODM”) to evaluate performance internally. Our CODM is our chief executive officer. Our operations consist primarily of one reportable segment: the Owned & Host segment. Our owned brands consist of our America’s Best and Eyeglass World operating segments. In America’s Best stores, vision care services are provided by optometrists employed either by us or by independent professional corporations. Eyeglass World locations have on-site laboratories and offer eye exams, provided by optometrists employed either by us or independent professional corporations. Our Host operating segments consist of Military and Fred Meyer. These brands provide eye exams principally by independent optometrists in nearly all locations. We have aggregated our America’s Best, Eyeglass World, Military and Fred Meyer operating segments into a single reportable segment due to similar economic characteristics and similarity of the nature of products and services, production processes, class of customers, regulatory environment and distribution methods of those brands.
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In addition to our single reportable segment, the results of our dedicated e-commerce website and FirstSight, which sells single-service health plans in connection with the operations of America’s Best operations in California, are presented in the “corporate and other” category. The Company concluded that our dedicated e-commerce website meets the criteria to be an operating segment but does not meet the quantitative thresholds for separate disclosure as a reportable segment. Further, in 2025, the Company concluded that FirstSight, does not meet the criteria to be an operating segment. Its results are not separately provided to the CODM, and therefore, they are also included in the “corporate and other” category. Prior-period information has been recast to reflect the segment presentation.
Our “corporate and other” category also includes corporate overhead support expenses as well certain non-cash charges, including asset impairment, stock-based compensation expense, and the impact of certain events, gains, or losses excluded from the assessment of segment performance.
Other adjustments to reportable segment results represent adjustments necessary for the presentation of consolidated financial results in accordance with U.S. GAAP, specifically effects of the change in unearned and deferred revenue during the period.
Our former Legacy reportable segment and the majority of our former AC Lens operations as well as related effects of unearned and deferred revenue are classified as discontinued operations. Refer to Note 2. “Discontinued Operations” for information related to our discontinued operations.
The operating segments identified above are the business activities of the Company for which discrete financial information is available and for which operating results are regularly provided to, and reviewed by, our CODM to allocate resources and assess performance. The Company considers each of our brands to be an operating segment and has further concluded that presenting the results of our reportable segment provides meaningful information consistent with the objectives of ASC 280, Segment Reporting .
The CODM uses segment EBITDA, calculated as net revenue, less costs applicable to revenue, less SG&A expenses, to evaluate the performance, and make decisions about the allocation of resources to segments predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a monthly and quarterly basis when making decisions about the allocation of resources to each segment. Consistent with what the CODM reviews, depreciation and amortization and interest expense(income), net are excluded from segment EBITDA.
There are no differences between the measurement of our reportable segment’s assets and consolidated assets. There have been no changes from prior periods in the measurement methods used to determine reportable segment profit or loss, and there have been no asymmetrical allocations to segments.
Reportable segment information is presented on the same basis as our consolidated financial statements, except for net revenue and associated costs applicable to revenue, which exclude the effects of unearned and deferred revenue, consistent with what the CODM regularly reviews. Asset information is not included in the following summary since the CODM does not regularly review such information for the reportable segment.
The following table is a summary of certain financial data for our Owned & Host reportable segment, and other categories, and includes a reconciliation to the Company’s consolidated earnings (loss) from continuing operations before income taxes.
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Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
In thousands
Owned & Host revenue:
Net product sales $ 1,593,503 $ 1,433,777 $ 1,396,355
Net sales of services and plans 385,385 360,470 333,693
Total Owned & Host revenue 1,978,888 1,794,247 1,730,048
Less:
Owned & Host costs applicable to revenue (exclusive of depreciation and amortization)
Cost of products 445,146 410,527 401,385
Cost of services and plans 358,191 330,801 310,643
Owned & Host SG&A 744,146 708,623 670,337
Owned & Host segment EBITDA 431,405 344,296 347,683
Corporate and other ( 271,608 ) ( 263,496 ) ( 228,746 )
Effects of unearned and deferred revenue ( 9,816 ) 1,049 ( 5,172 )
Depreciation and amortization ( 91,152 ) ( 91,349 ) ( 89,874 )
Interest expense, net ( 17,148 ) ( 16,184 ) ( 14,339 )
Earnings (loss) from continuing operations before income taxes $ 41,681 $ ( 25,684 ) $ 9,552
The following table presents a reconciliation of revenue:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Revenue
Owned & Host $ 1,978,888 $ 1,794,247 $ 1,730,048
Corporate and other
20,972 27,621 33,139
Effects of unearned and deferred revenue ( 12,372 ) 1,452 ( 6,816 )
Total consolidated revenue $ 1,987,488 $ 1,823,320 $ 1,756,371
Entity-wide Information
The following table presents our consolidated net revenue information:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Net product sales
Eyeglasses and sunglasses $ 1,269,126 $ 1,145,725 $ 1,115,000
Contact lenses 324,196 307,314 301,268
Accessories and other 11,270 10,100 6,961
Total net product sales
1,604,592 1,463,139 1,423,229
Net sales of services and plans
Exams 254,699 233,621 207,833
Product protection plans 73,565 72,854 72,069
Eyecare clubs 54,632 53,706 53,240
Total net sales of services and plans
382,896 360,181 333,142
Total net revenue $ 1,987,488 $ 1,823,320 $ 1,756,371
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16. Accumulated Other Comprehensive Loss
Changes in the fair value of the Company’s cash flow hedge derivative instruments from their inception are recorded in AOCL if the instruments are deemed to be highly effective as cash flow hedges. The following table presents the changes in AOCL, net of tax:
In thousands Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Cash flow hedging activity
Balance at beginning of fiscal year $ — $ ( 419 ) $ ( 1,179 )
Other comprehensive income (loss) before reclassification ( 159 ) — —
Tax effect of other comprehensive income (loss) before reclassification 39 — —
Amount reclassified from AOCL
( 2 ) 548 1,019
Tax effect of amount reclassified from AOCL
1 ( 129 ) ( 259 )
Net current period other comprehensive income (loss), net of tax ( 121 ) 419 760
Balance at end of fiscal year $ ( 121 ) $ — $ ( 419 )
See Note 13. “Interest Rate Derivatives” for a description of the Company’s use of cash flow hedging derivatives.
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Schedule I - Condensed Financial Information of Registrant
National Vision Holdings, Inc. and Subsidiaries (Parent Company Only)
Condensed Balance Sheets
In Thousands, Except Share Data
As of January 3, 2026 As of December 28, 2024
ASSETS
Current assets:
Cash and cash equivalents $ 871 $ 974
Total current assets 871 974
Noncurrent assets:
Deferred income taxes, net 11,892 11,618
Investment in subsidiary 925,142 970,199
Total noncurrent assets 937,034 981,817
Total assets $ 937,905 $ 982,791
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Other payables and accrued expenses $ — $ 249
Current maturities of long-term debt — 84,774
Total current liabilities — 85,023
Noncurrent liabilities:
Other liabilities 68,372 81,435
Total noncurrent liabilities
68,372 81,435
Stockholders’ equity:
Common stock, $ 0.01 par value; 200,000,000 shares authorized; 86,278,538 and 85,444,263 shares issued as of January 3, 2026 and December 28, 2024, respectively; 79,416,050 and 78,775,117 shares outstanding as of January 3, 2026 and December 28, 2024, respectively
862 854
Additional paid-in capital 834,000 807,048
Accumulated other comprehensive loss ( 121 ) —
Retained earnings 255,717 226,117
Treasury stock, at cost; 6,862,488 and 6,669,146 shares as of January 3, 2026 and December 28, 2024, respectively
( 220,925 ) ( 217,686 )
Total stockholders’ equity 869,533 816,333
Total liabilities and stockholders’ equity $ 937,905 $ 982,791
Note: Fiscal year 2025 includes 53 weeks. Fiscal years 2024 and 2023 include 52 weeks.
The accompanying notes are an integral part of these condensed financial statements.
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Schedule I - Condensed Financial Information of Registrant
National Vision Holdings, Inc. And Subsidiaries (Parent Company Only)
Condensed Statements of Operations and Comprehensive (Loss) Income
In Thousands
Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Total net revenue $ — $ — $ —
Total costs applicable to revenue — — —
Total operating expenses 256 256 214
Interest expense, net 948 6,639 12,040
(Gain) loss on extinguishment of debt — ( 859 ) 599
Earnings (loss) before income taxes ( 1,204 ) ( 6,036 ) ( 12,853 )
Income tax provision (benefit) ( 274 ) ( 1,373 ) ( 2,401 )
Earnings (loss) before equity in net income of subsidiaries ( 930 ) ( 4,663 ) ( 10,452 )
Net income (loss) of subsidiaries 30,530 ( 23,836 ) ( 55,449 )
Net income (loss) $ 29,600 $ ( 28,499 ) $ ( 65,901 )
Comprehensive income (loss):
Net income (loss) $ 29,600 $ ( 28,499 ) $ ( 65,901 )
Unrealized gain (loss) on hedge instruments
( 161 ) 548 1,019
Tax provision of unrealized gain on hedge instruments ( 40 ) 129 259
Comprehensive income (loss) $ 29,479 $ ( 28,080 ) $ ( 65,141 )
Note: Fiscal year 2025 includes 53 weeks. Fiscal years 2024 and 2023 include 52 weeks.
The accompanying notes are an integral part of these condensed financial statements.
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Schedule I - Condensed Financial Information of Registrant
National Vision Holdings, Inc. and Subsidiaries (Parent Company Only)
Condensed Statements of Cash Flows
In Thousands
Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023
Cash flows from operating activities
Net cash provided by (used for) operating activities $ ( 14,676 ) $ ( 6,082 ) $ ( 6,780 )
Cash flows from investing activities
Dividend from (investment in) subsidiary 99,157 224,245 132,443
Net cash provided by (used for) investing activities 99,157 224,245 132,443
Cash flows from financing activities
Repayments on long-term debt ( 84,774 ) ( 215,000 ) ( 99,250 )
Proceeds from issuance of common stock 3,395 1,507 1,837
Purchase of treasury stock ( 3,205 ) ( 3,092 ) ( 28,415 )
Payments of debt issuance costs — ( 837 ) ( 443 )
Net cash provided by (used for) financing activities ( 84,584 ) ( 217,422 ) ( 126,271 )
Net change in cash and cash equivalents ( 103 ) 741 ( 608 )
Cash and cash equivalents, beginning of year 974 233 841
Cash and cash equivalents, end of year $ 871 $ 974 $ 233
Note: Fiscal year 2025 includes 53 weeks. Fiscal years 2024 and 2023 include 52 weeks.
The accompanying notes are an integral part of these condensed financial statements.
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Schedule I - Condensed Financial Information of Registrant
National Vision Holdings, Inc. and Subsidiaries (Parent Company Only)
Notes to Condensed Financial Statements
1. Basis of Presentation
National Vision Holdings, Inc. (“NVHI,” or the “Company”) conducts substantially all of its activities through its indirect wholly owned subsidiary, National Vision, Inc. (“NVI”) and its subsidiaries. NVHI was incorporated in Delaware on February 14, 2014 under the name Nautilus Parent, Inc. There were no financial transactions between the inception date and March 13, 2014, the date the majority ownership of NVI was transferred from private equity funds managed by Berkshire Partners LLC (“Berkshire”) to affiliates of Kohlberg Kravis Roberts & Co. L.P (“KKR”). In October 2017, we completed the initial public offering of our common stock. By August 2019, each of KKR and Berkshire had sold their remaining holdings of our common stock. In the parent-company-only financial statements, NVHI’s investment in subsidiaries is stated at cost, plus equity in undistributed earnings of subsidiaries since the date of acquisition, less dividends. The parent-company-only financial statements should be read in conjunction with the NVHI consolidated financial statements.
In May 2020, the Company issued $ 402.5 million principal amount of 2.50 % convertible senior notes due 2025. NVHI contributed the proceeds from the 2025 Notes to NVI as additional investments during the fiscal year 2020. The Company fully repaid the 2025 Notes during fiscal year 2025. See Note 5. “Debt” to the NVHI consolidated financial statements for more information.
2. Guarantees and Restrictions
As of January 3, 2026, NVI had $ 237.6 million of principal amount of long-term debt outstanding under its Term Loan A and no outstanding cash borrowings under its $ 300.0 million Revolving Loans, which includes $ 6.7 million in outstanding letters of credit.
Under the terms of NVI’s amended credit agreement, provided no event of default has occurred and is continuing, NVI is permitted to pay dividends to NVHI with certain restrictions.
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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.