Dive Brief:
- EssilorLuxottica Q1 earnings were up 3% to 6.3 billion euros, or approximately $6.7 billion at current exchange rates, according to a Thursday report.
- North America, which represents approximately 45% of the company’s total revenue, saw the slowest growth for the quarter, with a 0.6% year-over-year increase to 2.9 billion euros. The report noted that the increase came “on top of the strongest quarter of last year,” when Q1 revenue was up 11.4% compared to 2022 for the region. However, growth was on par with Q4 results for the region, which were also up 0.6% year over year and fiscal 2023 results, which were up 1.3%.
- EMEA, the company’s second largest market, was up 5.8% to 2.3 billion euros, while Latin America, the company’s smallest market, was “the best performing region in the quarter,” per the report, with a 6.3% uptick to 371 million euros. Asia-Pacific rose 2.4% to 768 billion euros.
Dive Insight:
The first quarter offered a challenging comparison for EssilorLuxottica, which reported a third straight year of revenue growth in 2023. However, revenue was “in line with the long-term guidance” previously laid out, per the report.
Francesco Milleri, chairman and CEO, and Paul du Saillant, deputy CEO, said in a joint statement in the earnings release that they were pleased with Q1 results and credited “every geography and business” with “contributing to the positive performance.”
“With this positive momentum, we approach the first half of the year with optimism and remain confident in our strategic vision and our ability to deliver on our long-term outlook,” read the statement.
The company, which owns Sunglass Hut along with brands including Ray-Ban and Oakley, also manufacturers licensed eyewear for Prada, Ralph Lauren, Chanel, Coach and Burberry. Its high-end portfolio was further solidified in Q1 with renewed licensing agreements with Dolce&Gabbana and Michael Kors, and in the Asia-Pacific region, sunglass frames “gained good traction during the quarter particularly in the luxury segment,” per the report.
DTC sales were up 4.2% worldwide, which the company said was “balanced between the physical network and e-commerce” divisions. However, sunglasses “continued to be impacted by the weak performance in North America,” per the report.
In a report sent to Fashion Dive last week, analysts for HSBC said EssilorLuxottica’s consistent growth “should continue to fuel the mid-term growth prospects of the group.” The analysts added that new product launches in 2024 are expected to affect earnings in subsequent quarters because the launches could lead to higher prices.
“While the group tends to only increase prices through product mix, it seems that it will do a little more pure price increases this year that should come through towards the end of Q2 24,” the analysts wrote.
Meanwhile, EssilorLuxottica confirmed its “target of mid-single-digit annual revenue growth from 2022 to 2026” in its earnings and added that the company anticipates “an adjusted operating profit as a percentage of revenue in the range of 19-20% by the end of that period.”
