Kits Eyecare (KITS) Q3 Revenue Hits Record C$63.7M, Profit Falls
Kits Eyecare reported record third-quarter revenue of C$63.7 million, up 21.6%, as glasses sales jumped 59.3%. Net income fell to C$672,000 on heavier marketing and non-cash costs. The company guided fourth-quarter revenue of C$64 million to C$66 million.
Kits Eyecare (TSE:KITS) reported record third-quarter 2026 revenue of C$63.7 million, up 21.6% from a year earlier, as glasses sales climbed 59.3%. Net income fell to C$672,000, hit by higher customer acquisition spending and non-cash costs.
The kits eyecare Kits Q3 results show growth in both product lines. Contact lens revenue rose 15.7% to C$52.4 million, speeding up from 11.7% growth in the second quarter.
Margins and earnings
Gross profit increased 31.1% to C$23.8 million. Gross margin widened to 37.4% from 34.6%, helped by a larger share of glasses sales, premium lens upgrades and pricing and promotion management, CFO Ibrahim Kamar said.
Net income came to C$0.02 per share, against C$1.9 million, or C$0.06 per share, a year earlier. Kamar said an increase of about C$0.8 million in non-cash share-based compensation and a swing in foreign exchange results more than accounted for the drop.
Adjusted EBITDA, a measure of operating profit, was C$2.9 million. That is a 4.6% margin, down from 5.5%. It was the company's 16th consecutive quarter of positive adjusted EBITDA.
Glasses lead the growth
Glasses revenue rose 59.3% to C$11.3 million on about 145,000 pairs sold, up 55.6%. Glasses made up 17.7% of total revenue, compared with 13.5% a year earlier.
For the first nine months of 2026, glasses revenue reached C$33.1 million. That is more than the category's sales for all of 2025.
Average glasses order value rose 32.5% to C$151. Premium lens upgrades accounted for 44.8% of glasses revenue, and progressive lens revenue grew 56% to C$3.1 million.
Repeat customers and marketing
Repeat revenue rose 27.8% to C$41.8 million, or 65.6% of total revenue, up from 62.4%. The two-year active customer base grew 14.1% to 1.175 million.
Chairman and CEO Roger Hardy said most contact lens customers have not bought glasses from Kits. He called that an opportunity to sell higher-margin products to existing customers.
Marketing spending rose to 17.1% of revenue from 14.1% a year earlier, though it was down from 17.4% in the second quarter. Hardy said Kits reinvested about C$3.5 million of its C$5.7 million gross profit increase in acquiring customers.
New customers generated C$21.9 million in revenue, up 11%, even though the number of new customers fell 4%. Hardy said first-order values for new glasses customers were 63% higher than those of the comparable year-earlier group.
Outlook
Kits forecast fourth-quarter revenue of C$64 million to C$66 million and an adjusted EBITDA margin of 4% to 6%. Hardy said he expects marketing spending to become more efficient over time, at roughly 15% to 16% of revenue as glasses growth normalizes.
The company ended the quarter with C$30.6 million in cash and no debt. It plans to open a Calgary store in early to mid-first quarter of 2027.
