v3.24.0.1
Segment Reporting
 12 Months Ended
Dec. 30, 2023
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company’s reportable segments were determined on the same basis as used by the Chief Operating Decision Maker (“CODM”) to evaluate performance internally. Our operations consist of two reportable segments:
•Owned & Host store brands - 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 offer eye exams, primarily provided by independent optometrists, and have on-site laboratories. Our two 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.
•Legacy - As of December 30, 2023, the Company managed the operations of, and supplied inventory and lab processing services to, 225 Legacy retail Vision Centers. We earned management fees as a result of providing such services and therefore we recorded revenue related to sales of products and product protection plans to our Legacy partner’s customers on a net basis. We also sold to our Legacy partner wholesale merchandise that was stocked in retail locations and provided central lab processing for the finished eyeglasses and frames expected to be sold to our Legacy partner’s customers. Sales of services and plans in our Legacy segment consisted of fees earned for managing the operations of our Legacy partner and revenues associated with the provision of eye exams for our managed care customers. Revenues associated with managing operations of our Legacy partner were $30.6 million, $34.7 million and $41.7 million for fiscal years ended 2023, 2022 and 2021, respectively.
The Walmart MSA terminated on February 23, 2024 and we no longer operate Vision Centers for Walmart. Refer to Note 2. “Termination of Walmart Partnership” for developments related to the Legacy segment, AC Lens and FirstSight.
The “Corporate/Other” category includes the results of operations of our other operating segments and corporate overhead support. Revenues from the Corporate/Other segments are attributable to the AC Lens and FirstSight
operating segments. AC Lens primarily sells contact lenses and optical accessory products to retail customers through e-commerce. AC Lens also distributes contact lenses to certain Walmart and Sam’s Club under fee for services arrangements. FirstSight sells single service health plans in connection with the operations of America’s Best operations in California, and, until February 23, 2024, arranged for the provision of optometric services at the offices next to Walmart stores throughout California, at which time the agreements between FirstSight and Walmart terminated. None of those segments met the quantitative thresholds for determining reportable segments for any of the periods presented.
The “Reconciliations” category represents other adjustments to reportable segment results necessary for the presentation of consolidated financial results in accordance with U.S. GAAP for the two reportable segments.
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 reviewed by our CODM to allocate resources and assess performance. Our CODM is our chief executive officer. The Company considers each of our brands to be an operating segment and has further concluded that presenting the results of our reportable segments provides meaningful information consistent with the objectives of ASC 280, Segment Reporting. Strategic initiatives and financial objectives for each reportable segment are determined at the corporate level. Each operating segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives, and has a general manager responsible for the sales and marketing initiatives and financial results for product lines within the segment.
Our reportable segment profit measure is earnings before interest, tax, depreciation and amortization (“EBITDA”), or net revenue, less costs applicable to revenue, less SG&A expenses. Depreciation and amortization, asset impairment and other corporate costs that are not allocated to the reportable segments (including interest expense) are excluded from segment EBITDA. There are no revenue transactions between our reportable segments. There are no differences between the measurement of our reportable segments’ 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.
We incurred $0.6 million and $1.5 million of costs during fiscal years 2022 and 2021, respectively, directly related to adapting the Company’s operations to the COVID-19 pandemic such as personal protective equipment and other supplies needed to operate our stores safely and certain other costs such as compensation and other administrative expenses. Incremental expenses related to the COVID-19 pandemic were allocated to the reportable segments.
The following is a summary of certain financial data for each of our 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 are presented on a cash basis, including point of sales for managed care payors and excluding 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 segments.
Fiscal Year 2023
In thousandsOwned & HostLegacyCorporate/OtherReconciliationsTotal
Net product sales$1,396,355 $101,776 $252,355 $(6,350)$1,744,136 
Net sales of services and plans333,693 49,118 72 (551)382,332 
Total net revenue1,730,048 150,894 252,427 (6,901)2,126,468 
Cost of products401,385 46,036 218,814 (1,646)664,589 
Cost of services and plans310,643 24,866 812 — 336,321 
Total costs applicable to revenue712,028 70,902 219,626 (1,646)1,000,910 
SG&A670,337 56,790 264,756 — 991,883 
Asset impairment — — 82,413 — 82,413 
Other expense (income), net
— — (164)— (164)
Loss on extinguishment of debt
— — 599 — 599 
EBITDA$347,683 $23,202 $(314,803)$(5,255)
Depreciation and amortization98,252 
Interest expense, net14,339 
Earnings (loss) before income taxes
$(61,764)
Fiscal Year 2022
In thousandsOwned & HostLegacyCorporate/OtherReconciliationsTotal
Net product sales$1,317,673 $99,161 $242,822 $(11,341)$1,648,315 
Net sales of services and plans299,695 52,716 — 4,678 357,089 
Total net revenue1,617,368 151,877 242,822 (6,663)2,005,404 
Cost of products380,717 46,375 211,872 (2,640)636,324 
Cost of services and plans265,598 23,665 — — 289,263 
Total costs applicable to revenue646,315 70,040 211,872 (2,640)925,587 
SG&A629,421 58,217 227,717 — 915,355 
Asset impairment— — 5,783 — 5,783 
Other expense (income), net
— — (2,552)— (2,552)
EBITDA$341,632 $23,620 $(199,998)$(4,023)
Depreciation and amortization99,956 
Interest expense, net462 
Earnings before income taxes$60,813 
Fiscal Year 2021
In thousandsOwned & HostLegacyCorporate/OtherReconciliationsTotal
Net product sales$1,375,983 $103,249 $236,299 $2,813 $1,718,344 
Net sales of services and plans307,732 62,228 — (8,779)361,181 
Total net revenue1,683,715 165,477 236,299 (5,966)2,079,525 
Cost of products377,489 49,258 205,670 699 633,116 
Cost of services and plans246,342 25,321 — — 271,663 
Total costs applicable to revenue623,831 74,579 205,670 699 904,779 
SG&A618,413 57,838 224,547 — 900,798 
Asset impairment — — 4,427 — 4,427 
Other expense (income), net
— — (2,505)— (2,505)
EBITDA$441,471 $33,060 $(195,840)$(6,665)
Depreciation and amortization97,089 
Interest expense, net25,612 
Earnings before income taxes$149,325 
Entity-wide Information
The following table presents our consolidated net product revenue information:
In thousandsFiscal Year 2023Fiscal Year 2022Fiscal Year 2021
Net Product Sales
Eyeglasses and sunglasses$1,192,525 $1,120,731 $1,201,386 
Contact lenses543,411 520,709 509,992 
Accessories and other8,200 6,875 6,966 
Total net product revenues$1,744,136 $1,648,315 $1,718,344 
In fiscal years 2023, 2022 and 2021, respectively, revenues from Walmart, recognized in our Legacy segment and Corporate/Other category, represented $297.1 million, $291.5 million and $300.8 million of our total net revenue.