Kits Eyecare Tops C$250M Run Rate as High-Margin Glasses Sales Surge

Key Points

• KITS surpassed a C$250 million annualized revenue run rate on preliminary quarterly revenue of approximately C$63.7 million, driven by 59% year-over-year growth in eyeglasses sales.
• Eyeglasses now account for roughly 17%–18% of revenue, up from 13% a year earlier, and carry gross margins of 50% or more versus 30%–35% for contact lenses.
• The company reported about C$30 million in cash, no debt and a Vancouver lab capable of supporting approximately C$500 million in revenue, while limiting physical expansion to select brand-building stores.

Kits Eyecare TSE: KITS said it has surpassed a C$250 million annualized revenue run rate after reporting preliminary quarterly revenue of about C$63.7 million, as growth in its higher-margin eyeglasses business accelerated.

Speaking at Planet MicroCap Toronto 2026, Olivia Evans, KITS’ director of corporate development and investor relations, said the company expects to release its full earnings results the following week and characterized the preliminary figures as unaudited.

Founded in 2018 by Roger Hardy and Joseph Thompson, KITS sells contact lenses and prescription eyeglasses through its online platform and operates a vertically integrated optical lab in Vancouver. Evans said the company’s model is designed to reduce costs associated with traditional optical retailing, including physical stores and third-party manufacturing.

Repeat Customers and Eyeglasses Growth

Evans said more than 60% of KITS’ revenue has come from repeat customers in every quarter since the company began operating. She also said the company has generated positive adjusted EBITDA for more than 16 consecutive quarters.

The company initially built its business around contact lenses, a recurring but lower-margin product category, before expanding into prescription eyeglasses following its January 2021 initial public offering. IPO proceeds were used to construct the Vancouver lab, according to Evans.

Eyeglasses have become an increasingly important growth driver. Evans said glasses revenue grew about 59% year over year in the company’s most recent preliminary quarter, following growth of about 54% in the prior quarter and roughly 60% earlier in the year.

Contact lenses generally carry gross margins of about 30% to 35%, while eyeglasses can generate gross margins of 50% or more, she said. Glasses represented roughly 17% to 18% of KITS’ revenue, up from 13% a year earlier.

KITS has outlined an internal objective of reaching approximately C$500 million in revenue and a 15% adjusted EBITDA margin by the end of 2029. Evans emphasized that the figure was internal guidance rather than formal forecasting.

Pricing, Marketing and Margin Strategy

The company sells single-vision prescription glasses for C$28 to C$68 online and in its stores, according to Evans. She said those prices compare with approximately C$350 to C$400 for glasses purchased through a typical Canadian brick-and-mortar optical retailer.

Rather than raising entry-level prices, KITS has focused on introducing premium lens options, including anti-fatigue lenses and digital progressive lenses. Evans said digital progressive glasses can cost C$800 to C$1,000 in the Canadian market, while KITS sells them for less than C$200.

“We have a lot of pricing power still,” Evans said, noting that the company has not materially changed its glasses pricing since launching the category in 2021. However, she said KITS wants to preserve its low-price proposition while building stability and brand awareness.

Marketing expense has historically been about 14% to 16% of revenue, but rose to nearly 19% earlier this year as KITS pursued higher-value customer cohorts, including digital progressive and daily contact-lens customers. Evans said the company expects to work toward returning marketing spending to a more sustained 14% to 16% range in coming quarters.

She said adjusted EBITDA margin was 6.1% for the first half of the year and indicated the company expected a result above 4.5% for the latest quarter, subject to the release of full results. The recent margin pressure reflected increased investment in contact-lens customer acquisition and elevated marketing spending, she said.

Stores and Capital Allocation

While KITS does not plan to build a broad physical retail network, it views a limited number of storefronts as brand-awareness tools. The company opened a Toronto store on Queen Street West in July, and Evans said it was performing at the level of KITS’ Vancouver store in its fifth year of operation.

KITS may open additional Canadian locations in markets such as Alberta and Montreal before eventually using flagship locations to support U.S. expansion, Evans said. The company expects each store to cost less than C$1 million to open and plans to keep capital expenditures below 2% of the business.

Evans said KITS has repaid all of its debt, holds about C$30 million in cash and repurchased shares during the prior quarter through its normal course issuer bid. The optical lab has already been built to support roughly C$500 million in revenue without major additional capital expenditures, she said.

KITS also sells prescription smart glasses, including Ray-Ban Meta and Oakley Meta products, and has offered smart-glasses options for nearly two years. Evans said the company’s ability to add prescription lenses is a differentiator in that category.

About Kits Eyecare (TSE:KITS)

KITS TSX: KITS is one of the world's fastest growing eyecare providers, offering high-quality, affordable prescription glasses and contact lenses through its vertically integrated digital platform. With advanced in-house lens manufacturing, an industry-leading digital fit experience powered by OpticianAI, and thousands of 5-star customer reviews, KITS is redefining how Canadians experience eyecare. Designed in Canada. Delivered worldwide.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.