EYE

National Vision is a ~1,900-store optical retailer (America's Best + Eyeglass World, all leased) staging a genuine but early recovery. FY2026 revenue grew 9.0% to $1.99B, and after two years of GAAP losses (-$65.9M in FY2023, -$28.5M in FY2024) the company swung back to $29.6M net income, with operating income up 667.9% to $58.8M off a depressed base. Operating cash flow of $146M against $72.8M capex leaves roughly $73M of free cash flow — about a 5% FCF yield on the $1.49B market cap — and with EBITDA near $150M (operating income $58.8M + D&A $91.2M) the EV/EBITDA of ~11x is a fair, not cheap, multiple for a low-margin retailer. That cash generation, not the headline P/E, is what justifies owning it.

The quality of the recovery is the catch. GAAP margins are razor-thin — 3.0% operating, 1.5% net — and ROE is just 3.4%, so the 50.8x trailing P/E on $0.37 of EPS leaves no room for execution slips. The MD&A leans almost entirely on adjusted (non-GAAP) measures, and the long list of add-backs is itself a tell: management realignment, organizational restructuring/severance, ERP and CRM implementation expenses, and notably 'shareholder activism costs' signal a business still in transition and under outside pressure. The balance sheet is serviceable but not strong: $223M long-term debt against only $38.7M cash (down 47.7% YoY), and current liabilities ($412M) far exceed current assets ($226M) — typical for lease-heavy retail, but it leaves little cushion.