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

Thank you, Tamara, and good morning, everyone. Thank you for joining us today to discuss our second quarter results. I'm excited to be speaking with you for the first time as CEO, having officially stepped into this position on August 1. Before diving into our results, I'd like to express my sincere gratitude to Reade for his tremendous leadership over the past 23 years and for his continued support as Executive Chairman. I feel privileged to lead National Vision at this time of significant transformation and accelerated growth. We are thrilled with the continued positive response we are seeing with our customers and throughout our organization to the changes we are making to rapidly modernize the company. Our second quarter results demonstrate that our initiatives are working and progressing at a faster pace than we had planned. We attribute this ongoing early success to the commitment of our teams who are enthusiastically delivering results. We have a few exciting initiatives underway for the back half of the year. Last week, we introduced our new National Vision branding. And next week, we are launching a transformational campaign for America's Best. Every Eye Deserves Better, and we're excited for you to see it. We believe that this modern positioning of our largest brand, along with implementing a powerful new CRM platform will serve us well to attract new customers and retain our existing customer base. Given our strong year-to-date performance, we are raising our full year outlook while maintaining a prudent view on the remainder of the year against a noisy macro backdrop. And now on to our Q2 results. We delivered the highest second quarter results that we've seen in recent years, including the 10th consecutive quarter of positive comp store sales growth. This quarter, we saw stronger-than-expected top and bottom line results with adjusted comp store sales growth of 5.9% and adjusted EPS of $0.18, supported by a 69% year-over-year growth in adjusted operating income. This resulted in 180 basis point adjusted operating income margin improvement to 4.9%. Top line performance and adjusted operating income expansion are primarily related to the pricing actions we took earlier this year, our improved product assortment, continued efforts to improve our customer experience, and our focus on driving cost efficiency. These actions drove overall comp store sales growth, offsetting a decrease in average transactions as we anniversaried last year's promotional activity. We continue to see strength within our managed care business, which delivered low double-digit comp growth, bolstered by strong growth in both ticket and traffic. Our cash pay business also continued to deliver positive comp growth in the low single-digit range, driven by ticket, which was similar to cash pay trends seen in Q1 even while anniversarying last year's promotional activity. Importantly, while we've experienced average ticket gains across the business, we continue to see exam to eyeglass purchase conversion hold steady. In this quarter, we saw our Net Promoter Scores increase. A key to our success is how we deliver exceptional eye care and the strength of our doctor network. Doctor coverage remains healthy. We've continued to expand our doctor coverage and improve appointment availability. And our remote exam technology reached a significant milestone this quarter, surpassing 1 million exams conducted. I'm sharing all of this, our brand evolution, enhanced capabilities, and strengthened doctor network to underscore the sustainability of the strides we're making as we capitalize on the incredible runway for growth ahead. We shared that our strategy involves heightened segmentation, personalization, and digitization in our messaging, product assortment, pricing architecture, and consumer experience. And we've spent a lot of time talking about the great opportunity and progress we have made with expanding our managed care customer cohort, but we're also making strong progress in expanding our addressable market with progressive lens wearers and outside RX customers, those who bring prescriptions from other providers. This contributed to growth with higher income brackets overall, particularly in the $75,000 to $100,000 range. As we progress, we expect to continue to sharpen our product assortment, in-store experience, and marketing approach to better attract and serve these customers. We continue to evolve our product assortment to meet their needs. Managed care users have benefits allowing for frame purchases that average $130, and yet only 20% of our frames were priced over $99 at the end of last year. That is why we're moving our assortment of frames priced over $99 to approximately 40% this year through the new brands, which we are launching. Our recently launched designer partnerships are performing really well with both cash pay and managed care customers. The Lam and Ted Baker collections are turning at above-average rates, validating our strategy of offering designer options. And this quarter, we're excited to launch Jimmy Choo, which features high-quality and glamorous styling and HUGO BOSS, known for sophisticated and modern designs. Assortment evolution is just one factor contributing to our growth. Another significant component is our approach to the in-store experience. In May, we conducted comprehensive lifestyle training across our entire organization. This wasn't just a training exercise. It was a significant inflection point for our field team. We conducted immersive training for our associates in this new approach, and it's created significant drive and energy throughout the organization. This training is focused on selling to the lifestyle needs of the consumer while still being an obvious destination for great value. It's a subtle nuance, but a very important one for how we are addressing our business. Together, these initiatives are already showing results as we've seen growth in each target customer cohort group. In addition to these tactical changes, we are also refreshing our branding overall. During the quarter, we made significant progress with the launch of our refreshed branding for National Vision that you see featured in this quarter's earnings presentation. This new identity is more than a visual evolution. It's a powerful expression of our purpose, our people, and our momentum as we enter a new chapter for our business. Our new identity reflects the national vision of today and tomorrow, a modern, agile, purpose-driven company committed to helping people see their best to live their best. But I'm especially excited about America's Best's fresh new look that you will see launch next week. America's Best was in need of a brand revitalization that speaks to the consumer segments that we are targeting while staying true to our strong value positioning. With the brand's new position that Every Eye Deserves Better, we are introducing a new look and feel that's reassuring, modern, and joyful. These launches have energized our teams to rise to the occasion and meet our objective to helping people see their best to live their best. Take a look at our National Vision website to see how we've elevated and modernized National Vision's corporate look and feel. And in our second quarter presentation, you'll see a sneak peek at how America's Best's fresh look puts customers and their eyes front and center while staying true to our heritage of value. The work we are doing to redefine our communication and brand platforms is just the beginning, and we're excited with the path we see ahead as we modernize and create a more personalized experience for our customers. To that end, we're making rapid enhancements to our digital marketing and omnichannel capabilities. We are making good progress upgrading our CRM capabilities with the support of our partnership with Adobe. We successfully migrated our customer database, launched all of our pre-existing campaigns in the new system, and are actively testing the new journeys being developed with the first launching this quarter. This new platform will allow us to create new personalized journeys for all our customers and significantly enhance their experiences online. The new system is designed to greatly improve targeting precision and audience selection. We look forward to updating you further on the progress we make. While much of our current work is focused on America's Best, we are driving improvement in Eyeglass World. Earlier this year, we made a leadership change that is bringing the right focus and urgency needed for the brand. Since putting in place the new leadership team, Eyeglass World saw its best first half performance since 2021. We recently made an important strategic decision to modify our doctor model in Florida to enhance the patient experience and provide greater access to care. We are excited about the transformation just beginning at EGW. The second quarter demonstrated meaningful progress across multiple fronts that led to strong and better-than-expected top line and bottom line results. Our transformation initiatives are gaining traction, and our brand revitalization is energizing associates. Our customers will soon see a fresh and modern America's Best and our strategic focus on key customer segments is driving improvements in our comp sales. Before I turn the call over to Chris, I want to thank our team again for their enthusiasm and focus as we deliver on our initiatives. I'm confident in the steps we're taking to rapidly modernize the company and accelerate growth. Importantly, we're doing the things our customers want to create a joyful shopping experience with the products they love, and we are just getting started. We have years of runway ahead to continue to evolve the business. The investments we're making are phased over the course of this and subsequent years, and we believe we will strengthen our position and increase shareholder value for many years to come. I look forward to unpacking our strategic vision in more detail at our Investor Day on November 17. With that, I'll turn it over to Chris.

Thank you, Alex, and good morning, everyone. With a full quarter now under my belt, I am even more energized by the progress we are making and our clear path forward. As a team, we have an unwavering commitment to deliver on our stated objectives, operate the business with enhanced discipline, and drive sustainable, profitable growth. As part of this commitment, we are focused on driving efficiencies across the business, leveraging our cost structure and ongoing customer value creation, resulting in ticket expansion that we believe has a multiyear trajectory. As Alex said, we look forward to sharing more on this during our upcoming Investor Day. Now I'll turn to our second quarter results as compared to the prior year period. Please refer to today's press release for reconciliations of non-GAAP financial measures to their most comparable GAAP financial measures. For the second quarter, net revenue increased 7.7%, driven by adjusted comparable store sales growth of 5.9% and growth from new store sales. The timing of unearned revenue benefited revenue in the period by approximately 60 basis points. During the quarter, we opened 8 new America's Best stores and closed 5 America's Best stores. We ended the quarter with a total of 1,240 stores. Adjusted comparable store sales growth in the period was driven by an increase in average ticket of 6.6%, which reflects the impact of price increases implemented in late 2024 and Q1 of this year, as well as the benefit from our refreshed merchandising mix and new selling methods. The increase in average ticket was partially offset by a 0.4% decline in overall customer transactions as we anniversaried last year's promotions. Overall, eye exam conversion to eyeglass sales remained consistent with prior quarters, signaling customer acceptance of our new merchandising and pricing architecture, and we have continued to see strong results in managed care, supported by both positive ticket and traffic trends. As a percentage of net revenue, costs applicable to revenue decreased approximately 170 basis points. The resulting increase in gross margin reflects growth in average ticket as well as optometrist and tech cost leverage. Given the gross margin expansion we have seen through the first half of the year, we now expect gross margin to expand slightly for fiscal 2025. Adjusted SG&A was $240 million, an increase from the second quarter of fiscal 2024. We have continued to benefit from the cost actions we took earlier this year. However, the increase in SG&A dollars was primarily driven by higher variable compensation expenses related to revenue and profitability performance during the period, as well as higher healthcare costs. As a percentage of revenue, we leveraged our core expenses, including compensation and benefits. However, total adjusted SG&A deleveraged 20 basis points, largely driven by fewer non-GAAP adjustments taken this year compared to the prior year. For the year, we continue to expect adjusted SG&A to leverage. Adjusted operating income was $23.8 million compared to $14.1 million in the prior year. Adjusted operating margin increased 180 basis points to 4.9% due primarily to the factors mentioned above. Continued margin rate expansion through delivering consumer value remains a primary focus for our team. Net interest expense was $4.2 million compared to $3.2 million in the prior year, driven by lower interest income on our cash balances with the settlement of our convertible notes in May. Adjusted EPS increased to $0.18 per share in the second quarter of 2025 from $0.15 per share a year ago. For the first half of fiscal 2025, we delivered adjusted comparable sales growth of 5.7%, adjusted operating income margin expansion of 140 basis points, and nearly 20% growth in adjusted EPS compared to the prior year. Turning next to our balance sheet. We ended the period with a cash balance of approximately $48 million and total liquidity of $327 million, including available capacity from our revolving credit facility. In May, we settled the remaining $84.8 million in convertible notes through cash on hand and liquidity from our revolving credit facility. As of June 28, our total debt outstanding, net of unamortized discounts, was $272 million. And for the trailing 12 months, we ended the period with net debt to adjusted EBITDA of 1.3x. Year-to-date, we generated operating cash flow of $87 million and invested $32 million in capital expenditures, primarily driven by investments in new and existing stores and remote exam technology. We continue to maintain a strong balance sheet and healthy cash flow to support our growth and capital allocation priorities. I am also happy to announce that we successfully implemented the first phase of our new ERP focused on finance and accounting in Q2. The implementation of this platform serves as a proof point of our ability to execute on the modernization of our business. Moving now to our outlook. Based on the successful execution of our initiatives, we are raising our expectations for the year. We now expect revenue between $1.93 billion and $1.97 billion, adjusted comparable sales growth of 3% to 5%, adjusted operating income between $85 million to $95 million, and adjusted EPS of $0.62 to $0.70, which assumes approximately 80 million weighted average diluted shares outstanding. As a reminder, this outlook incorporates the benefit of a 53rd week, which we estimate will add approximately $35 million of net revenue and approximately $3 million of adjusted operating income for the year, though it will not impact adjusted comparable store sales growth, which is calculated on a 52-week basis. We expect to continue to benefit from our previous pricing actions and have not assumed additional pricing actions in our guidance. We will continue to evaluate the consumer response to our evolving merchandising assortment and selling techniques together with the pricing we've taken and use these insights to inform our next steps. As we've mentioned, pricing strategy is an important component of our annual cycle, and we expect to share more on our plans on our next earnings call. Our guidance assumes that second half traffic trends are in line with our Q2 performance, given the continued uncertainty in the macroeconomic environment. We remain optimistic about the launch of our new CRM platform and America's Best brand assets, but we believe it's prudent to wait until we have proof points of their impact on consumer behavior before we incorporate any potential benefit in our guidance. With respect to costs, our outlook continues to incorporate $12 million of expense savings from actions taken earlier this year and now incorporates higher expenses related to variable incentive compensation as well as increased healthcare costs based on updated trends. On our last earnings call, we committed to monitoring the evolving tariff environment and to mitigate the P&L impact created by the new regulatory environment. The latest tariff policies as of August 1 have significantly reduced the anticipated impact on our business from our Q1 estimates, and our raising guidance includes both the anticipated impact of tariffs and our mitigation strategies. We are very pleased with the progress our team is making in partnership with Accenture on our cost optimization strategy. We recently completed our initial analysis in identifying key areas of cost opportunity. As we begin to implement actions in these areas, we will provide a more comprehensive update on the potential savings opportunities we have across the organization. Now turning to our expectations for capital expenditures. As you will see in our press release, CapEx has come down a bit to a range of $87 million to $90 million. This change is largely driven by our expectation that we will now open approximately 32 new stores this year, as certain projects have shifted into fiscal 2026. Considering planned closures for the year, we expect to open 12 net new stores. This includes 17 America's Best stores opened through the end of Q2 and an expected remaining 15 openings to be largely weighted in Q4. In addition to these new stores, we expect to close 20 stores in total this year. This includes 3 store closures expected in Q4. For all other details regarding our outlook, please refer to today's press release. And with that, I would like to thank you for your participation in today's call.

Our first question comes from Simeon Gutman with Morgan Stanley.

Good quarter. My first question is about the managed care expansion. Can you provide insights on the visibility regarding the number or percentage of new plans you might secure during the contract renewal season? Additionally, could you share any details on the number or percentage of new plans and your current penetration by plan to help us understand the potential growth in managed care?

Simeon, thanks for the question. Yes, again, we're really happy with our managed care growth in the quarter. We grew managed care up in the low double-digit range. So continue to see nice traction there. We haven't really talked and we won't talk specifically about individual plans and plan participation. I will say that we are continuing on our North Star of managed care growth and mix is around the 50% range, and we're continuing to push right along that path.

Okay. Regarding cash customers, do you have any insights on increasing volumes to a positive level, focusing on traffic rather than just ticket sales? What are your thoughts on that?

Yes, that's a great question. There are a few factors to consider. The cash pay segment is decreasing as more cash pay customers transition to managed care. Our data indicates a shift of about 2% from cash pay to managed care compared to last year. With that in mind, we aim to take control of our future regarding the cash pay segment. This is mainly why we're revamping our America's Best marketing strategy, focusing on our campaign materials and customer relationship management with the intention of influencing the cash pay consumers, who have not been as strong as managed care customers in the post-COVID period. We're encouraged by the positive performance of the cash pay group when looking at overall traffic and ticket sales. We plan to continue to shape our future in this area through our marketing efforts.

And our next question comes from Michael Lasser with UBS.

As you unpack the America's Best comp from the second quarter, how much of the growth came from like-for-like price increases on same SKUs? How much came from elevating the assortment to a greater percentage of your SKUs above $100? And did the first 2 factors contribute to the traffic decline that was experienced in the second quarter?

As we review the results from the second quarter and the year so far, we are observing improvements in ticket driven by our pricing strategies and assortment mix. The primary influence has been from pricing adjustments. It's important to note that we are consistently updating our product selection, so the frame board assortment hasn't been fully implemented for the entire quarter. Looking ahead to the second half of the year, we anticipate further changes in that mix. Regarding traffic, we find it noteworthy that both managed care and cash pay consumers are opting for more premium frame and lens assortments. This indicates that the adjustments we are making are appealing to both customer segments, and we believe the changes are not causing cash pay customers to disengage.

Okay. My follow-up question is on the margin outlook for the business. National Vision's operating margin is on track to be 4.5% to 5% this year. Historically, the company has achieved an operating margin in the 6.5% to 7% range. So how quickly do you think you can recapture that 200 basis points of gap between what you're expecting this year and where it's been historically? And should we think about the historic peak as an upward bound of where National Vision's margin can go? Or alternatively, just given all the actions that have been taken along with the elevated assortment, there can be a new peak margin opportunity on the horizon.

Look, I think margin expansion is a primary focus for this management team. We're really excited about the margin expansion we saw through the first half and what we're guiding to. Without speaking to kind of multiyear outlook, what I can say is that we'll provide a little more context in our Investor Day coming up here in a few months. But the actions we're taking both on the assortment changes on some of the CRM activity, on the cost controls that we're implementing in our partnership with Accenture are all hyper-focused on expanding our operating margin rate.

Our next question comes from Paul Lejuez with Citi.

A couple of questions. Can you talk about what your actual average price point is to the cash paying customer and what it is for the managed care customer and how each has changed year-over-year, what you're seeing this quarter? And I guess even bigger picture, do you think the cash pay customer is pushing off purchases? Or are they shopping somewhere else? Curious if you think you might be losing share to someone in that demographic. And then last, just if you can talk about any regional differences, strengths, weaknesses?

Paul, so yes, first and foremost, we do see that the managed care transaction is generally a higher transaction than the cash pay transaction, right? I mean, these are folks that generally have a higher degree of benefit that also points them to leverage their benefit and use it against some higher-quality lenses and some higher-quality frames. So yes, so the ticket on the managed care consumer generally outstrips that of the cash pay customer. And certainly, we think that's a significant tailwind in our business. And again, one of the reasons that we're so focused on that managed care consumer cohort. One of the things as it relates to the cash pay consumer, and Chris touched on this a little bit, this last quarter, we actually chose not to anniversary our promotion from last year, which was really a promotion focused on a heavily value-seeking cash pay consumer. So with our small decline in traffic, we're actually really pleased with that result, given the choice to not chase that really low-end kind of cash pay consumer with a really sharp promotional message that we had last year. So I think, all in all, a really nice result there. That being said, we still see, like I mentioned, a little bit less resiliency on the cash pay consumer from a purchase cycle perspective. It hasn't changed markedly from previous quarters. But again, this is why we're making the investments we are in marketing and acquisition to once again kind of control our own destiny and reactivate that consumer that has been a bit more latent.

And then just the regional differences to call out?

No, we don't see really any significant regional differences. I said this before related to kind of seasonality in this business. We see moguls not mountains. I think the same thing holds true for geographic differences. I mean, there's some minor differences related to different managed vision care plan participation, different kind of socioeconomic factors to consider. But generally, we don't see any major regional differences in strength or weaknesses. That being said, I've talked about this previously, one of the reasons that we are going to continue to invest in our tech stack, specifically around merchandising ERP is to take advantage of nuances in the market where there could be different desires for different assortments. Again, we're not there today, but we do anticipate to be there in the back half of '26, where we can do some tailor market assortment of product by market, and we do think that will play. Again, not really a strength or weakness by geography, but I think it certainly speaks to our opportunity to be a bit more hyper-segmented to where individual kind of consumer wants and desires lie.

Just one follow-up. You mentioned a $130, I think, spending power when you're talking about the managed care customers. Did I hear that right? And I was just trying to understand where your average ticket is with that customer relative to that number.

Yes. The $130 represents the average amount that plans pay, which allows managed care consumers to access frames with no out-of-pocket cost. The calculations here are quite simple. The average plan pays $130, and currently, 20% of our product mix is priced at $99 and above. We're increasing that to 40% to better align with our managed care consumers' needs, enabling us to provide them with more suitable frames that maximize the benefits their plans offer.

Our next question comes from Adrienne Yih with Barclays.

Congratulations on the great start to the year. My question is, typically, the eye care, the vision care sort of on an annual or biannual basis is pretty sticky. You get kind of people who have their doctor or wherever they go. How are you actually targeting and marketing the $75,000 to $100,000 cohort? Where are you doing it? How are you reaching out to them? And how easy, I'll put that in air quotes, is it to kind of get them to transact to move kind of the records and all that stuff to kind of America's Best? And then secondarily, can you comment on sort of like the dark, dim locations, sort of how you've been able to incorporate the telehealth and increase the capacity utilization of the optometrists?

You got it. Adrienne, thanks for your insights. Your point is spot on and highlights why we are significantly rethinking our marketing strategy. In the past, we've excelled at advertising on linear TV and investing heavily in search marketing. This was effective when we were targeting cash-paying consumers, but now we are pursuing a different customer group. As we adjust our campaign strategy to be more elevated, sharper, joyful, and modern, we will also change our media approach. Traditionally, we concentrated our marketing budget heavily at both the upper and lower ends of the funnel while neglecting the middle. Our new campaign will enable us to increase our presence in social media and digital channels where we believe our target consumer groups are. This shift means we will enhance our mid-funnel marketing efforts, which have previously been underdeveloped. Additionally, regarding CRM, we are evolving from a one-to-many messaging approach. In the past, if ten customers visited us, they all received the same message during their repurchase cycle. Moving forward, we will leverage better customer demographic data, including income and purchase history, to provide targeted and personalized messages based on their specific needs and segments. At a macro level, we are transitioning from a one-to-many marketing model to a one-to-one marketing engine across our platform. This is a bit of a deeper dive than you may have expected, and in November, we will provide a more detailed look along with our campaign assets and insights into our tech stack that will help us achieve these goals. Regarding dark and dim locations, we are pleased with the progress we've made. Our performance in these areas is consistent with what we reported in Q1. In terms of doctor recruitment, we are on track to recruit over 10% of the graduating class, similar to previous years. As for doctor retention, our recent numbers are the best we’ve seen in a long time. From an OD perspective, we feel very confident about our current position.

Great. I have a follow-up for Chris. In the last discussion, you mentioned the new tariff changes, specifically the increase from 145% to 30% with China, which occurred shortly after your last report. You previously indicated an unmitigated impact ranging from $10 million to $15 million, which wasn't reflected in the outlook. Now that the rate is at 30%, is it accurate to consider this change as inconsequential?

Yes, that's exactly right. Between updates in the regulatory environment as well as, frankly, conversations with our strategic partners about what tariff impact on our supplies that we would or would not be willing to accept. It's really something that we've incorporated in the guidance. It's fractional compared to our last estimate, and we've put in place a few cost mitigation strategies in our outlook to offset any impact of the incremental tariffs.

Our next question comes from Kate McShane with Goldman Sachs.

We wanted to ask about Eyeglass World. I know it's a smaller part of the business, but you mentioned in the prepared comments, there's been some new leadership changes there. And we're just wondering how you think about this banner in the context of the transformational strategy and what goals you have set for that banner?

No. Great question, Kate. I want to emphasize how pleased we are with the positive changes happening at Eyeglass World. Our new brand leader is working with impressive urgency, rallying the team, implementing significant changes, and has a solid plan for the next few years to enhance results. We saw positive comps of 2.8% at Eyeglass World in the second quarter, marking the best first half since 2021, which shows that our efforts are paying off. We recently made a major adjustment to our doctor model in Florida, where approximately 40 of our 120 Eyeglass World locations are situated. We shifted to a model that aligns more with what we do at America's Best, moving toward an employee structure. We believe these changes position Eyeglass World very favorably. Additionally, we are launching a new America's Best campaign next week. Once we stabilize that and are satisfied with our creative assets and brand direction, we have instructed the agency to reevaluate Eyeglass World, including modernization, positioning, and media investment strategies. Overall, we are pleased with our early results and feel optimistic about the future direction of Eyeglass World as we continue to make strategic investments.

And as a second question, we just wanted to ask about going forward real estate strategy. Just as you think about moving your business more towards a managed care customer, can we expect any kind of meaningful change in terms of how you source your real estate locations versus what you have already built out today?

Yes. So I wouldn't say it's going to inform a wholesale shift in our real estate strategy. Certainly, I think we will be including data points going forward that we might not have in the past around like concentration of managed care lives as an input into our real estate model. That's something that historically hasn't been considered as much as it will be going forward. But in terms of types of real estate and where we look to invest, we're still focused on regional power centers anchored by strong national retail brands. That will not change. We think, obviously, those are great centers to be co-located in. But in terms of where we might expand into markets and additional geographies, certainly, we will be considering concentration of managed care lives as one of the factors in our decision criteria.

Our next question comes from Dylan Carden with William Blair.

Two for me. One, just curious on the closures, kind of what kind of stores you're closing and the sort of strategy there as far as how many more in the fleet you think you can rationalize? And the demand environment, where you think we are in the repurchase cycle? Has that recovered? And I guess the context for that question is I feel like there either is confusion or risk of confusion as to whether or not you're walking away from kind of the core lower-income consumer. And it sounds like there's more deliberate action in which you're keeping that consumer, maybe yielding them up to some capacity. Anything there would help.

Yes, great question. Thanks, Dylan. When we consider our store closures, we are rationalizing the fleet by focusing on a few areas: first, evaluating our overall ability to generate profit and whether that profit adds value to our portfolio; second, as demographics and populations change, we assess our capacity to recruit doctors in those locations to ensure the best possible experience; and third, we are determining our desired future concentration. As leases come up for renewal, we review whether we want to continue operating in those locations long-term. If a location does not align with our future initiatives, we will proceed with closing the store. This approach aligns with what we outlined in Q4 of 2024 regarding our rationalization strategy. We remain confident in our current footprint, so I do not anticipate significant changes or an increased rate of closures. Overall, our portfolio is still in a very healthy balance.

Yes. Dylan, I'll address the demand environment. Currently, we're not seeing a return to pre-COVID purchasing habits, which we all appreciate. However, our cash pay initiatives focused on lifestyle selling and product assortment are positively impacting cash pay consumers. We've noticed that these customers are opting for higher-quality products, including better frames and lenses, through our lifestyle selling approach. So, in response to your question about whether we're generating additional yield from cash pay consumers, the answer is definitely yes. We're very pleased that this consumer segment is aligning with our holistic strategy.

Our next question comes from Brian Tanquilut with Jefferies.

This is Cameron Harbilas on for Brian Tanquilut. I guess the question I had was your comps growth guidance, you pulled up for the second half. But after 2 quarters of comps growth in excess of 5%, it seems like you're guiding towards a bit of a slowdown. Can you talk about like what the back half looks like for comps growth and just what the driving factor there is?

Yes, I would highlight two main factors. First, we need to be cautious as there is still considerable uncertainty in the macroeconomic environment and its potential impact on consumer behavior. We are confident in our ability to succeed in a strong economy, and we also believe we can perform well during weaker times. However, at this moment, we want to be very careful about our expectations for the second half of the year. On the demand side, we are truly excited about our new CRM capabilities launching in the latter half of the year and the new America's Best brand assets. However, we want to see clear evidence that these initiatives are affecting consumer behavior before we incorporate any potential benefits into our guidance. Regarding pricing, we implemented price increases mainly in the fourth quarter and first quarter of this year. Our current guidance does not factor in any additional price increases in the fourth quarter as we mark the anniversary of last year’s increases. We intend to closely monitor how our new merchandising strategy and current pricing have been influencing consumer behavior. After gathering a bit more data, we will determine the appropriate timing for any additional pricing actions.

And then as a follow-up on the comps growth, it sounded like America's Best comps growth was mostly price increases, but you saw low double digits on managed care and it was positive both from volumes and pricing. Can you talk about the split there on the managed care book and comps growth?

Yes. So no, you're exactly right. The managed care cohort grew both from a footsteps basis and from a ticket basis. So again, nice growth there. Again, if you break it down further, obviously, then that leaves us to the cash pay consumer that from a ticket perspective was up and then from a traffic perspective was down. So again, I don't think we're going to break out specifics regarding the composition of that. But directionally, that's absolutely right. Traffic growth on the managed care consumer, ticket expansion on the managed care consumer, ticket expansion on cash pay and the footsteps on cash pay remain largely in line with what we saw in Q1.

And our next question comes from Matt Koranda with ROTH Capital.

So just curious to get a little bit of a deeper dive on the pricing discussion you guys have had so far. You mentioned sort of the optimized assortment and sort of the goal of getting to 40% of the mix of frames priced above $99. I guess our checks would suggest you're kind of already there at America's Best. So maybe just curious about sort of is there further iteration at the other banners that needs to happen? Maybe a little bit more there. And then how do we think about sort of lens pricing optimization and other avenues for price over time?

Yes, I appreciate that, Matt. We have made significant changes to our assortment throughout Q1 and as we wrap up Q2. Some of the frame brands we introduced came late in the quarter, which relates to Chris' earlier point about being in the early stages and observing how these products perform. However, we are confident in our strategy and very optimistic about it. We believe there is still room for growth, especially given the positive indications that our cash-paying customers are embracing these products. The higher average unit retail products we are introducing are selling at a faster rate than our historical inventory levels, which are all promising signs that we are on the right track. We can continue to broaden our assortment in terms of pricing and by incorporating more premium options. All of these factors are synergizing, including lifestyle trends and the evolution of frames, as consumers respond positively to our offerings. Regarding lens pricing, we are just beginning to explore this area. There is substantial opportunity in lens pricing which is more complex than frame pricing. We believe we have potential there, and when we discuss long-term growth regarding our mix and pricing evolution, we certainly include our plans for lenses. We expect to elaborate more on this in future quarters.

Okay. I appreciate all that detail. And then maybe just as my follow-up, on store productivity, I'm curious how much runway you guys think we have for improvement there? I assume the majority of it is going to come from sort of the pricing optimization exercise we're going through. But how much benefit could you also get from sort of trimming some of the underperforming stores in the base?

Yes, I believe there is still significant potential for optimizing our fleet through additional store closures and reinvesting in our existing locations. The recent price changes will also contribute to improving our store operating profit. As we've discussed previously, we recently reached our milestone of conducting 1 million remote exams, and we are optimistic about our current position. We see further opportunities to enhance the productivity of our technology, which should positively impact our financial performance.

And our next question comes from Anthony Chukumba with Loop Capital Markets.

I guess my first question is about the Ray-Ban and Nuance pilots. I was wondering what the early results have been and if, based on those results, you are considering rolling those products out to additional stores.

Yes, that's a great question, Anthony. Currently, we're operating these products in around 50 locations, and the initial feedback is very positive. Our team members and customers are both excited about the products. According to our data, our sales are matching the average rate of the category at this early stage. However, this is a completely new product category for us. Before we expand, we need to ensure we have proper training and the right messaging so our team can effectively communicate the benefits to consumers. This new category requires different sales approaches. The first 50 locations are not just a trial to see if we can sell them; rather, it's a test to understand how to scale effectively. We are committed to this category and are optimistic about our potential for success. We're using this phase to learn how best to expand while making the process as seamless as possible for our 14,000 team members.

Got it. That's helpful. Just a quick follow-up. You mentioned not marking the anniversary of a promotion. Can you remind us what that promotion was? Additionally, do you think that if you had recognized that promotion's anniversary, your traffic would have been positive this quarter?

Yes. Last year, we had the Wise Buys promotion where we reduced the intro combo offer by about $10. This did drive traffic in 2024, particularly from consumers who were focused solely on the 2 pairs for $69 and the free eye exam offer. However, from a profit contribution standpoint, it wasn't very strong. While we believe it brought in traffic in 2024, we chose not to repeat it due to the limited benefit in terms of additional traffic it generated. We think this decision played a role in our success for the quarter, contributing to a significant improvement in EBIT.

Got it. By the way, I love the new logo and looking forward to the Analyst Day. Keep up the good work guys.

Thank you.

We share that enthusiasm as well. Anthony, I appreciate your kind words. The level of excitement throughout our organization about the new brand for National Vision and our direction with America's Best is remarkable. This is a truly energizing time for our team members as they fully embrace our new visual identity and the path we are taking. Thank you, Anthony.

And this concludes the question-and-answer session. I would now like to turn it back to Alex for closing remarks.

Thanks so much, and thanks, everyone, for your time this morning. As you can probably tell, we're really excited about the momentum we have within the company. We think there's lots and lots of runway over the next several years as we layer in initiatives that will drive continued performance of our store base and of our brands. I want to thank everyone again for their time, and we'll talk to you next quarter. Thanks so much.

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