Investing.com -- It has been an exciting time for National Vision investors. The stock is up roughly 120% over the past 12 months, fueled by revenue growth, expanding margins, and the best annual earnings per share since 2022, with another solid beat in its last reported quarter.

Investing.com had a chance to sit down with company’s CEO Alex Wilkes to discuss what’s behind the impressive financials, how the company’s major pivot has been playing out to its advantage, and what’s next for one of America’s largest optical retailers.

The Math Behind Managed‑Care Pivot

National Vision’s business model has historically revolved around its key “value” offering: two pairs of glasses plus an eye exam for $95. The proposition resonated strongly with cash‑pay customers, but it also meant that the company was leaving behind the growing pool of consumers with vision insurance. That trend has now changed, in a big way.

“Historically, our business skewed heavily toward cash‑pay customers, which was effective when insurance benefits represented a smaller share of category spend,” Wilkes told Investing.com. “As managed care has now grown to account for a larger portion of both the market and our own business, we are intentionally evolving our approach.”

The economics are compelling. According to Wilkes, a managed care customer applies $130‑$150 in frame allowance alone, and the average transaction is worth 2.4‑4.0 times the entry‑level bundle. Today, managed care accounts for nearly 42% of sales, and the company is purposely adjusting its positioning to reach those higher‑value customers, even if at the expense of cash-pay traffic. “We are reallocating much of the marketing dollars that were historically focused almost exclusively on cash‑pay customers,” the CEO said.

Importantly, Wilkes emphasized that they are not abandoning the value roots. “It is important to note that we are not walking away from cash pay either. We are focused on expanding our share with customers where we are underpenetrated relative to the category. As such, we are deliberately targeting more managed care customers,“ he said. Despite pursuing higher-paying clients, National Vision’s value proposition and branding power remain exceptional: in a category where eye exams declined in the mid‑to‑high single digits last year, the company managed to grow exams by roughly 1%.

Why Margin Expansion Can Continue

Despite concerns about lower gross margins on some managed‑care products, Wilkes argues the focus should be on gross margin dollars and operating leverage. In Q4, higher managed‑care revenue helped gross margin expand about 40 basis points because the average revenue from those customers tends to be notably greater.

“While some managed‑care products carry lower margin rates, overall profitability improves due to higher tickets and mix,” he said. “The average ticket for managed care customers is meaningfully higher than for cash‑pay customers.”

Operating margins expanded 160 basis points year‑over‑year in fiscal 2025. Going forward, Wilkes sees further gains of 50-150 basis points between 2026 and 2030, as premium frames reach 60% of the assortment by the end of 2026, premium lens attach rates rise, and smart eyewear becomes a larger part of the mix.

Smart Eyewear is a Big Growth Lever

Smart eyewear is quickly becoming one of National Vision’s most compelling growth vectors. The company’s rollout of Ray‑Ban Meta, soon to be available in over 1,200 locations, has been very successful, with the product turning faster than almost any other SKU in the assortment. More importantly, “smart eyewear and premium lenses attach rates significantly increase transaction value, and early results show very high premium lens attachment rates, making these some of our highest value transactions,” Wilkes told Investing.com

Looking ahead, Wilkes wants to greatly the company’s offering and become an “agnostic destination” for smart eyewear clients. “We certainly would welcome relationships with other tech companies,” he said at a recent conference, positioning National Vision to capture more of what could become a transformative category.

Technology Upgrades and Store Growth

Beyond the customer mix shift, National Vision is investing in technology to modernize “an industry that has historically been highly analog – from in‑store exams to lens selection. By integrating technology, we are reshaping access, personalization and improving the overall patient experience,” the company’s CEO told Investing.com.

National Vision also intends to continue growing its physical footprint. While growth will be intentionally modest this year with “only” 30‑35 new locations planned, a more aggressive expansion is on the horizon for 2028 after the technology overhaul is complete.

What Investors Can Expect

With shares holding near the top of their 4-month range and a solid Q1 beat in hand, investors will likely be watching whether the managed‑care momentum can continue to drive operating leverage, revenue growth, and margin expansion. Wilkes believes their strategy is working. “We’re continuing to successfully execute on our transformation plan, adjusting customer acquisition strategies, product assortment, mix and marketing to build a healthier, more durable business,” he said. Now, the focus is on whether the company can continue delivering on the strategy that has brought it this far.