Ray-Ban maker EssilorLuxottica misses sales expectations as China slows
2024.10.17 14:22
By Alban Kacher and Pauline Foret
(Reuters) -Franco-Italian eyewear maker EssilorLuxottica missed third quarter revenue expectations on Thursday, dented by a slowdown in consumer spending in China.
Group revenue for the three months ended Sept. 30 came in at 6.44 billion euros ($6.97 billion), below analysts’ forecasts of 6.58 billion euros, according to a Visible Alpha consensus cited by Dow Jones.
Group Chief Financial Officer Stefano Grassi told an analyst call that the group faced a “clear deceleration” in revenue growth in the Chinese market compared with the previous quarter.
Essilor’s performance in Asia was notably affected by a slowdown in Hong Kong, where the company faced “a structural lack of tourist traffic and consumer spending”, he said.
The European luxury sector has been hit by lower consumer spending in China, with French luxury giant LVMH reporting on Tuesday its first decline in quarterly sales since the pandemic as demand in China and Japan weakened.
Essilor saw its revenue in the Asia-Pacific region rise 5% at constant exchange rates in the third quarter, but that was slower than 9.8% growth in the second quarter of 2024.
Grassi, however, said that the group expected revenue growth to accelerate in the fourth quarter, both organically and from the impact of the acquisition of Heidelberg and Supreme.
He highlighted strong sales of smart Ray-Ban eyewear developed in partnership with Meta (NASDAQ:). “It’s an overall success story, just to give you an idea, it’s not just a success in the U.S. – it’s also a success here in Europe. In 60% of the Ray-Ban stores, Ray-Ban Meta is the bestseller,” he said.
Essilor confirmed its guidance for the 2022-2026 period, targeting revenue growth of 27-28 billion euros over the period,
and an adjusted operating profit as a percentage of revenue in the range of 19-20% by the end of that period.
Italian eyewear giant Luxottica in 2018 merged with French lens maker Essilor in a $58 billion deal, forming EssilorLuxottica.
EssilorLuxottica owns major retail outlets including LensCrafters, Sunglasses Hut and For Eyes, and also popular eyewear brands such as Persol, Oliver Peoples, and Oakley.
($1 = 0.9237 euros)
