Investing.com -- Back in mid-May of this year, National Vision reported what looked like a strong first quarter: the company beat on EPS, posted strong margin expansion, and guided full-year results in line with analysts’ expectations. Nonetheless, the shares, which had more than doubled in 12 months prior, dropped by over 15% on the day of the report. Investors appeared spooked by a slight revenue miss, but more importantly: by guidance of weak Q2 comparable store sales (in low single-digit range) due to a temporary disruption from e-commerce replatforming of the company’s core brands.

With the second quarter nearly over, Investing.com had a chance for an exclusive Q&A session with Alex Wilkes, National Vision’s CEO, to discuss the recovery, actual business trends, and why the market appears to have overreacted to the Q1 report.

The replatforming proved just a “blip”

The weak Q2 comparable store sales guidance was perhaps the most focal point of the company’s post-Q1 conference call. Wilkes says this was not unexpected. “We deliberately chose Q2 to go live specifically because it is our lowest-volume quarter of the year,” he told Investing.com. The migration to a modern e-commerce platform was a planned strategic move, he noted, but it temporarily severed the data signals between the company’s paid search and social media engines — the key funnel for eye exams. That created a “signal disconnection across paid search and social which then in turn pressured exam bookings and traffic.”

Wilkes reiterated that the disruption proved temporary and stressed that the new platform is performing exactly as intended. “I want to be very clear that from a technical standpoint everything on the site works as designed and without issue. Conversion, the value proposition and the messaging are all intact.” The brand pull, he argues, never changed — it’s just the mechanics of digital customer acquisition that had a brief hiccup.

“We are seeing clear proof points of improvement across key search optimization measures that are tracking back to, or higher than, what they were before the replatform,” Wilkes said. He added that cost per acquisition, the company’s main marketing efficiency metric, is already heading back toward historical norms.

Guidance reaffirmed, back-half catalysts intact

“Our confidence in the year hasn’t changed,” Wilkes said, pointing to the June 3rd SEC filing where the company reaffirmed its full-year guidance. “The reason is simple: the underlying drivers of the business are working. Ticket is strong, it’s accelerating, and it’s being driven by mix and premiumization rather than price.”

Even with second-quarter comps tracking in the low-single-digit range, management’s planning scenario currently shows they can hit the high end of the 3%–6% annual comp range even if traffic remains modestly negative. There are several catalysts in play for the back half: the rollout of Nikon Lenswear progressive lenses, a store segmentation program that tailors frame assortments to local demand, and an expansion of premium lens and frame offerings. Wilkes says the data is already supporting the recovery: “Second quarter-to-date comps are tracking in the low single-digit range, and that figure reflects improvements we have seen since our go-live.”

Inventory build is a green flag, not a red one

Q1 results notably showed a 22% year-over-year inventory jump. Wilkes insisted it was not a sign of weakening demand, but the exact opposite: “the inventory growth was intentional and tied to our growth strategy.” He explained that the bulk of the increase reflects frames purchased to support the store segmentation rollout — set to re-merchandise 1,270+ stores into five distinct local assortment profiles — along with investments in new premium brands.

Wilkes also highlighted the efficiency of the company’s showroom model, where most stock sits in central labs rather than on store shelves. In his view, “a comparable strategy run by retailers that need in-store backstock would have driven inventory growth at a meaningfully higher rate.” Overall, “we feel very good about the health and mix of the inventory,” Wilkes said, noting that the company expects some additional build in Q2 before leveling out.

Smart glasses “ahead of plan on every metric”

Smart eyewear has been one of National Vision's most promising growth vectors, Wilkes told Investing.com back in March. The trend has only grown stronger since: “the category is performing ahead of plan on sell-through, associate adoption, consumer demand, and average transaction value — where Ray-Ban Meta is now among the highest ATV transactions in the entire portfolio,” Wilkes said.

National Vision, he noted, is in a relatively unique position: “We’re effectively the only optical retailer at scale, outside EssilorLuxottica’s own retail, with national distribution of this product, and our managed care patients can apply benefits toward the purchase.” While the product’s high input costs mean it’s margin-dollar-accretive but not margin-rate-accretive, that fits neatly into National Vision’s operating playbook. “We’d rather grow gross margin dollars through premiumization and let SG&A leverage do the work on operating margin.”

Putting money behind "significantly undervalued" shares

The management’s confidence that the post-Q1 stock reaction was overblown isn’t just in words – it shows in concrete actions. According to Wilkes, after the quarter’s end, National Vision “completed the repurchase of $20 million or approximately 1 million shares under our existing share repurchase authorization,” a move he says the company undertook because “we viewed the share price to be significantly undervalued and it represented a clear return on investment.”

Bottom line

Despite the volatility and occasional setbacks, National Vision’s head reiterated a confident and optimistic message: “When I look at National Vision today, I see a company that is stronger, serving a more valuable customer, and building a modern, unified commerce platform, all while being intensely focused on multi-year operating margin expansion.” With traffic disruption fading, ticket trends accelerating, and a pipeline of growth levers still to come, ”this is a truly exciting time for our company,” Wilkes said.