On Wednesday, August 7, Canada’s KITS Eyecare, a retailer of eyewear and contact lenses, reported that its revenue grew 26% to a record CAD37.9 million (approximately $27.6 million) in the second quarter of 2024. Quotes on KITS shares closed 5% higher on the Toronto Stock Exchange.
Details
The company’s revenue for the second quarter grew 26% to CAD37.9 million (about $27.6 million), while gross profit was up 25% at CAD12.4 million ($9.0 million). “Overall, it was an excellent quarter by the team which shows an acceleration across almost every key metric in the business,” KITS cofounder Roger Hardy was quoted as saying in the press release. He noted that this marks the company’s seventh consecutive quarter of positive EBITDA. In April-June, adjusted EBITDA reached CAD1.3 million ($950,000), up 260% versus the same period in 2023.
For the first half of the year, revenue came in up 26% at CAD72.6 million ($52.9 million), while gross profit climbed 24% to CAD23.6 million ($17.2 million).
KITS also guided for revenue in a range of CAD39 million to CAD41 million ($28.4-29.9 million) in the third quarter and adjusted EBITDA as a percentage of revenue between 3% and 5%. For comparison, in the third quarter of 2023, revenue was CAD31.2 million ($22.7 million), with adjusted EBITDA at CAD0.6 million ($0.44 million).
Market reaction
On Wednesday, KITS stock rose 5% to CAD9.80 per share on the Toronto Stock Exchange. It has had a remarkable run this month, hitting a record high and exceeding its IPO price for the first time since it went public three years ago. KITS is now up 57% since the beginning of the year and up nearly 90% over the last 12 months.
Five analysts cover KITS, according to Investing.com. They recommend buying the stock, with an average target price of CAD12.10 per share.
About KITS Eyecare
KITS Eyecare positions itself as a digital eyecare platform where customers can have an online eye exam and purchase glasses and contact lenses. It was founded in 2018 by Canadian entrepreneur Roger Hardy and partners, Joseph Thompson and Sabrina Liak.
The company sells eyewear online. It wants people to own multiple pairs of glasses, similar to how they have many scarves and headscarves. “We have this incredible offer of putting quality glasses in front of you for a low price,” said the company’s head of product design, Edita Hadravska, to the Canadian publication BCBusiness. “So you start treating them as your scarf. Glasses go in the middle of your face – why wouldn’t you play with them, have different colors and looks?”
Most glasses at KITS cost $28 a pair – cheaper than most online competitors, notes BCBusiness. The company offers over 2,100 styles of frames, including custom-made ones, all of which can be tried on virtually. Most glasses are made on the day of order and delivered within 1-2 days across Canada. The company’s optical laboratory can produce more than 4,000 pairs of glasses a day, cofounder Joseph Thompson stated at the recent LD Micro conference in New York.
