Kits Eyecare (KITS) LD Micro 20th Annual Main Event Conference summary

Market and model

• U.S. vision correction is needed by ~7/10 people; the category is ~$70B in the U.S. and ~$100B globally.

• E-commerce operates in Canada and the U.S., with ~2/3 of revenue from the U.S.; glasses start at $28 including prescription after passing ~90% of savings to customers.

• Model launched in 2018 with contact lenses as a recurring-customer entry point, followed by glasses and in-house manufacturing to reduce friction and waste.

• IPO proceeds and founder capital funded a lab built for CAD 500M in revenue capacity before glasses were sold.

Performance and customer economics

• Past-year revenue was CAD 202M with 5.8% bottom-line profitability; preliminary Q3 revenue was CAD 63.7M and bottom-line profitability just over 4.5%.

• Glasses revenue grew over 60% in recent quarters; contacts remain ~80%-85% of revenue.

• Active customers surpassed 1.1M; repeat customers contributed over 60% of revenue every quarter since the IPO.

• Contacts gross margin is ~30%-35%; glasses average ~50% or above. Gross margin rose from ~25% at the 2021 IPO to 37%-39% in H1 this year.

• Return rates are about half industry norms: single-vision glasses versus a 10% industry rate, and digital progressives versus a 20% industry rate.

Operations and expansion

• Prescription uploads feed automated production equipment, reducing manual handling of prescriptions and measurements; automation supports low return rates.

• Lab capacity utilization is ~35%, with no major capacity additions needed; a new machine was added for premium lenses as demand for digital progressives and polarized lenses picked up.

• Two Vancouver-area retail stores serve brand awareness, customer trial and local engagement; plans call for several more flagships, likely starting in Canada, then expanding in the U.S. from the West Coast eastward.

• A network of 15 North American flagships would represent a strong position; retention cohorts show repeat metrics nearly double a competitor's, with an 80 NPS target for glasses and contacts.

• Scaling glasses is expected to improve operating leverage in G&A and fulfillment, while greater brand awareness may improve marketing efficiency.