Vancouver-based eyewear e-commerce venture Kits Eyecare Ltd. (TSX;:KITS) posted its first-ever annual profit thanks to soaring revenue and an expanded profit margin.
Kits generated $3,116,000 in net income last year, compared with a $2,215,000 loss in 2023 and a $5,876,000 loss in 2022.
Fuelling that annual gain was a strong fourth quarter.
The company generated a $2,733,000 profit in its fourth quarter, ended Dec. 31, up from a net loss of $491,000 in the same quarter one year earlier, according to the company .
"The improvement was primarily attributable to an improvement in revenue, fulfillment and marketing efficiency, and foreign exchange gain recognized," Kits said in a press release.
Revenue in 2024 rose 32 per cent to a record $159.3 million, compared with $120.5 million in 2023.
It also was helped by a strong fourth quarter, where revenue jumped 42 per cent, to a record $44.8 million, up from $31.7 million in the same quarter in 2023.
The company converted more of that revenue into profit because its profit margins are growing. Its fourth quarter gross margin increased by 130 basis points to 36.3 per cent, up from 35 per cent in the fourth quarter of 2023.
"We continued to build momentum and strengthen our leadership in the eyewear category," said Roger Hardy, co-founder and CEO.
"Our relentless focus on customer experience, paired with growing demand for the Kits brand, has been a key driver of our continued success and strong business growth."
He said the company saw record engagement throughout the year, driven by its commitment to "quality, speed, and value."
One milestone in the fourth quarter was the company for the first time delivering more than one million pairs of glasses.
It is unclear exactly how the U.S.'s tariff war on Canada will impact future business.
Nearly 68.4 per cent of the company's 2024 sales were to U.S. residents.
so they are not set to be subject to tariffs, Hardy told BIV in an interview last month.
He said at the time that he believed that it is possible that eyewear could be exempted from tariffs because it is a medical product.
More than 86.3 per cent of the company's revenue comes from contact lenses, with glasses primarily comprising the rest.
Kits continues to operate a single coffee house in Kitsilano, at the corner of Cornwall Avenue and Yew Street. Customers are able to buy coffee as well as peruse eyewear frames and access a computer to make online eyewear orders.
Hardy's background includes being the founder of what became the Nasdaq-listed, Vancouver-based Coastal Contacts, which owned the Clearly Contacts brand in Canada.
He then in February 2014 sold the company to French lens giant Essilor for $430 million. That company then merged with Italy's Luxottica to become EssilorLuxottica and its Clearly Contacts division rebranded as Clearly.
Clearly's operations in Vancouver have since been reduced, and the company has stopped responding to BIV's media requests.
Kits Eyewear now uses Clearly's former manufacturing facility in Vancouver's Broadway Tech Park.
