EssilorLuxottica: Sales growth in the second quarter despite the slowdown in the United States

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EssilorLuxottica, the Franco-Italian multinational specialising in optical lenses and frames, reported a rise in second-quarter sales to €6.70 billion. Solid performances in the EMEA region and the upturn in the Chinese market offset the complications encountered by the group in the United States.

 

The world leader in ophthalmic lenses, which now owns the Oakley, Ray-Ban and Persol eyewear brands, reported total sales of €6.70 billion, up 4.9% at constant exchange rates.

 

Like LVMH, the upturn in China and solid results in EMEA helped to mitigate the impact of a slowing US market. And like the luxury leader, EssilorLuxottica – the 11th-largest CAC40 stock by value – was punished on the Paris Bourse on Monday, falling by 5%. Again, this was due to the contraction in the US market.

 

The adjusted operating margin rose to 18.5% at constant exchange rates, 10 basis points higher than in H1 2022.

 

Free cash flow amounted to 954 million euros for half-year 1.

 

A positive US market despite everything

 

These results were driven by growth in the Ray-Ban and Oakley brands, as well as by “an impressive two-thirds jump” in sales of the Bolon regional brand, “thanks to the reopening of its domestic market, China”, as stated in the Group’s press release.

 

Over the second half of the year, the Asia-Pacific region (APAC) proved to be the most dynamic, with a strong rebound in China. The American market, on the other hand, is stalling.

 

Growth in the United States remains positive, but fell to 0.1% over the April-June period (+2.3% at constant exchange rates), compared with +11.4% over the first three months of the year (+7% at constant exchange rates).

 

This situation is similar to that experienced by the LVMH group, except that EssilorLuxottica is far more exposed to the ups and downs of the US market than the world’s number one in luxury goods.

 

In fact, 46% of its sales come from the United States (compared with 24% for LVMH).

 

EssilorLuxottica, on the other hand, still has little presence on the Chinese market.

 

In the first quarter, the group managed to impress the stock market, hailing its accelerating growth across the Atlantic. Its premium positioning had put it at a good distance from the growing price competition, while also making it immune to fears of recession.

 

In doing so, the Group has revised its 2023-2025 growth forecasts for the United States downwards, from 4.6% to 3.4%.

 

Forecasts for Europe, on the other hand, have been raised from 4.4% to 6%.

 

Double-digit growth in EMEA (+7.5% in the second quarter, +10.6% at constant exchange rates) helped to offset the downturn in the United States, notes UBS.

 

“We are pleased with our mid-year performance, in particular the strong growth in sales and our ability to maintain the pace of margin expansion, in line with our long-term objectives,” commented Francesco Milleri, Chairman and Chief Executive Officer, and Paul du Saillant, Chief Operating Officer of EssilorLuxottica.

 

A powerful pipeline of innovations

 

As for the Group’s prospects, the management team cited “a powerful pipeline of innovations”.

 

In this respect, the group can count on its product innovations, such as its entry into the hearing aid market in the United States.

 

In its press release, the group mentions the new Ray Ban Reverse, which is revolutionising the design of sunglasses, and the latest generation of Varilux XR lenses optimised by AI technology as significant launches in the last six months.

 

In addition, the recent acquisition of the Nuance business will enable EssilorLuxottica to develop innovative technology and secure its entry into the hearing aid market.

 

The CEO and Deputy CEO of EssilorLuxottica added: “The second half of the year will be just as dynamic: we will be developing new functionalities for Ray-Ban Stories, in partnership with Meta, and preparing our entry into the hearing solutions market with a disruptive technology. On the other hand, we are in line with our goal of achieving carbon neutrality in Europe by 2023.”

 

In addition to its own eyewear brands, the group is also known as one of the leading licensees of frames for luxury brands, including Bvlgari, Chanel, Prada, Tiffany’s, Versace and Dolce & Gabbana.

 

Read also >BMW Mottorad launches its connected glasses for motorcyclists

 

Featured photo : Summer 2023 Reverse Campaign © Ray-Ban[/vc_column_text][/vc_column][/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]

EssilorLuxottica, the Franco-Italian multinational specialising in optical lenses and frames, reported a rise in second-quarter sales to €6.70 billion. Solid performances in the EMEA region and the upturn in the Chinese market offset the complications encountered by the group in the United States.

 

The world leader in ophthalmic lenses, which now owns the Oakley, Ray-Ban and Persol eyewear brands, reported total sales of €6.70 billion, up 4.9% at constant exchange rates.

 

Like LVMH, the upturn in China and solid results in EMEA helped to mitigate the impact of a slowing US market. And like the luxury leader, EssilorLuxottica – the 11th-largest CAC40 stock by value – was punished on the Paris Bourse on Monday, falling by 5%. Again, this was due to the contraction in the US market.

 

The adjusted operating margin rose to 18.5% at constant exchange rates, 10 basis points higher than in H1 2022.

 

Free cash flow amounted to 954 million euros for half-year 1.

 

A positive US market despite everything

 

These results were driven by growth in the Ray-Ban and Oakley brands, as well as by “an impressive two-thirds jump” in sales of the Bolon regional brand, “thanks to the reopening of its domestic market, China”, as stated in the Group’s press release.

 

Over the second half of the year, the Asia-Pacific region (APAC) proved to be the most dynamic, with a strong rebound in China. The American market, on the other hand, is stalling.

 

Growth in the United States remains positive, but fell to 0.1% over the April-June period (+2.3% at constant exchange rates), compared with +11.4% over the first three months of the year (+7% at constant exchange rates).

 

This situation is similar to that experienced by the LVMH group, except that EssilorLuxottica is far more exposed to the ups and downs of the US market than the world’s number one in luxury goods.

 

In fact, 46% of its sales come from the United States (compared with 24% for LVMH).

 

EssilorLuxottica, on the other hand, still has little presence on the Chinese market.

 

In the first quarter, the group managed to impress the stock market, hailing its accelerating growth across the Atlantic. Its premium positioning had put it at a good distance from the growing price competition, while also making it immune to fears of recession.

 

In doing so, the Group has revised its 2023-2025 growth forecasts for the United States downwards, from 4.6% to 3.4%.

 

Forecasts for Europe, on the other hand, have been raised from 4.4% to 6%.

 

Double-digit growth in EMEA (+7.5% in the second quarter, +10.6% at constant exchange rates) helped to offset the downturn in the United States, notes UBS.

 

“We are pleased with our mid-year performance, in particular the strong growth in sales and our ability to maintain the pace of margin expansion, in line with our long-term objectives,” commented Francesco Milleri, Chairman and Chief Executive Officer, and Paul du Saillant, Chief Operating Officer of EssilorLuxottica.

 

A powerful pipeline of innovations

As for the Group’s prospects, the management team cited “a powerful pipeline of innovations”.

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EssilorLuxottica, the Franco-Italian multinational specialising in optical lenses and frames, reported a rise in second-quarter sales to €6.70 billion. Solid performances in the EMEA region and the upturn in the Chinese market offset the complications encountered by the group in the United States.

 

The world leader in ophthalmic lenses, which now owns the Oakley, Ray-Ban and Persol eyewear brands, reported total sales of €6.70 billion, up 4.9% at constant exchange rates.

 

Like LVMH, the upturn in China and solid results in EMEA helped to mitigate the impact of a slowing US market. And like the luxury leader, EssilorLuxottica – the 11th-largest CAC40 stock by value – was punished on the Paris Bourse on Monday, falling by 5%. Again, this was due to the contraction in the US market.

 

The adjusted operating margin rose to 18.5% at constant exchange rates, 10 basis points higher than in H1 2022.

 

Free cash flow amounted to 954 million euros for half-year 1.

 

A positive US market despite everything

 

These results were driven by growth in the Ray-Ban and Oakley brands, as well as by “an impressive two-thirds jump” in sales of the Bolon regional brand, “thanks to the reopening of its domestic market, China”, as stated in the Group’s press release.

 

Over the second half of the year, the Asia-Pacific region (APAC) proved to be the most dynamic, with a strong rebound in China. The American market, on the other hand, is stalling.

 

Growth in the United States remains positive, but fell to 0.1% over the April-June period (+2.3% at constant exchange rates), compared with +11.4% over the first three months of the year (+7% at constant exchange rates).

 

This situation is similar to that experienced by the LVMH group, except that EssilorLuxottica is far more exposed to the ups and downs of the US market than the world’s number one in luxury goods.

 

In fact, 46% of its sales come from the United States (compared with 24% for LVMH).

 

EssilorLuxottica, on the other hand, still has little presence on the Chinese market.

 

In the first quarter, the group managed to impress the stock market, hailing its accelerating growth across the Atlantic. Its premium positioning had put it at a good distance from the growing price competition, while also making it immune to fears of recession.

 

In doing so, the Group has revised its 2023-2025 growth forecasts for the United States downwards, from 4.6% to 3.4%.

 

Forecasts for Europe, on the other hand, have been raised from 4.4% to 6%.

 

Double-digit growth in EMEA (+7.5% in the second quarter, +10.6% at constant exchange rates) helped to offset the downturn in the United States, notes UBS.

 

“We are pleased with our mid-year performance, in particular the strong growth in sales and our ability to maintain the pace of margin expansion, in line with our long-term objectives,” commented Francesco Milleri, Chairman and Chief Executive Officer, and Paul du Saillant, Chief Operating Officer of EssilorLuxottica.

 

A powerful pipeline of innovations

 

As for the Group’s prospects, the management team cited “a powerful pipeline of innovations”.

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Picture of Victor Gosselin
Victor Gosselin
Victor Gosselin is a journalist specializing in luxury, HR, tech, retail, and editorial consulting. A graduate of EIML Paris, he has been working in the luxury industry for 9 years. Fond of fashion, Asia, history, and long format, this ex-Welcome To The Jungle and Time To Disrupt likes to analyze the news from a sociological and cultural angle.

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