Asia-Pacific revenue rises 17% after Thailand acquisition
EssilorLuxottica, the Franco-Italian manufacturer of Oakley and Ray-Ban sunglasses, said its organic sales growth slowed to 8.7% year-on-year in the second quarter, reaching 7.69 billion euros ($8.74 billion). The figure marked a deceleration from the 11% growth the company recorded in the first three months of the year and fell short of the 7.83 billion euros analysts polled by Visible Alpha had forecast.
Sales in the Asia-Pacific region drove much of the quarter’s growth, rising 17% year-over-year following the company’s acquisition of the store network of Top Charoen, an optical retailer that operates around 2,000 stores in Thailand. Revenue in North America and Europe experienced softer trends, which EssilorLuxottica attributed in part to conflict in the Middle East.
Sales of Ray-Ban and Oakley smartglasses — wearable devices powered by artificial intelligence and produced with Meta — nearly doubled compared with the same quarter a year earlier, adding to rapid expansion in a category the company is banking on to help fuel its growth over the longer term. “AI glasses confirmed their exponential growth,” the company said.
The company backed its five-year guidance of “solid growth” in total revenue and “broadly aligned” increases in adjusted operating profit, without offering numerical guidance. Its adjusted operating profit rose by 15% over the first six months of the year, while its operating margin grew to 18.9% from 18.1% in the prior-year period.
“The point of debate remains the prospects for smartglasses,” analysts at brokerage Bernstein wrote in a note following the update.
The company could face competition from other smartglasses models in the near future, as Google and Apple are preparing their own models of the wearable technology. But analysts at UBS wrote in a note this month that plenty of untapped opportunity still lies ahead for EssilorLuxottica. “Our long-standing view has been that greater competition is necessary to help build the category and accelerate adoption in the U.S. and globally,” the bank’s analysts said.