What happened

Shares of National Vision (EYE -2.79%) fell off a cliff Wednesday, cratering as much as 38.1%. As of 1:56 p.m. ET, the stock was still down 36.8%.

The company -- which offers eye exams, eyeglasses, and contact lenses through various retail locations -- reported its fourth-quarter financial results, and investors did not like what they saw, or didn't see.

So what

For the fourth quarter, National Vision generated revenue that was marginally lower, decreasing 1.9% to $468.9 million. The results were hampered by the timing of unearned revenue, which negatively impacted revenue by 2.9%. The results went out of the frying pan and into the fire, as net income plunged 249%, resulting in a non-GAAP (adjusted) loss per share of $0.08, compared to earnings per share of $0.13 in the prior-year quarter. 

To give those numbers context, analysts' consensus estimates were guiding for revenue of $471.5 million and a loss per share of $0.03, so National Vision missed expectations on both counts. 

Things went from bad to worse. Comparable-store sales declined 5.7% year over year, the result of macroeconomic headwinds. Consumers are reining in discretionary spending, putting off their annual eye exam and hanging on to their existing glasses a bit longer.

Commenting on the results, CEO Reade Fahs stated, "We ended the year in line with our guidance expectations despite the challenging macroeconomic environment which negatively impacted the optical industry and especially our core value-conscious uninsured customer base."

Now what

National Vision expects the challenges to continue. Management is guiding for 2023 revenue of $2.1 billion, which is essentially flat compared to 2022. The company is anticipating an improvement in comps that might even turn positive, with its outlook for adjusted same-store sales in a range of 0% to 3%. Management is also guiding for adjusted diluted earnings per share (EPS) of $0.51 at the midpoint of its guidance. While revenue was in line with expectations, profits were far below analysts' consensus estimates for EPS of $1.

Given the ongoing uncertainty and the company's customer base -- which is largely uninsured -- investors would do well to watch National Vision until the economy begins to show signs of improvement. This is no time for rose-colored glasses.