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EssilorLuxottica Release Q1’23 Financial Results
- Group’s revenue at Euro 6,151 million, up 9.7% vs 2022
- Growing 8.6% at constant exchange rates versus the best quarter of last year
- North America and EMEA up high-single digit
- All regions accelerating1 versus the fourth quarter of last year
- Comparable-store sales growing high-single digit
EssilorLuxottica announced that consolidated revenue for the first quarter of 2023 reached Euro 6,151 million, representing a year-on-year increase of 8.6% at constant exchange rates compared to the first quarter of 2022 (+9.7% at current exchange rates).
Francesco Milleri, Chairman and CEO, and Paul du Saillant, Deputy CEO at EssilorLuxottica commented:
“We’re very pleased to start the year with another strong quarter, every region and channel contributing to our performance. What’s even more satisfying is the way in which we achieved it. Sustainability is at the heart of our strategy and our key focus in 2023. We continue to deliver on our “Eyes on the Planet” pillars while supporting the long-term growth of the industry.
We started the year with a commitment to setting science-based emission reduction targets in line with the SBTi criteria. We have also announced a new agreement with ERG for the supply of electricity produced from a repowered wind farm in Sicily – covering half of our energy needs in Italy. Our current and future investments in renewable energy will help propel us towards carbon neutrality in Europe this year and globally by 2025.
Together with our ambition to help eliminate uncorrected poor vision for hundreds of millions of people in underserved communities, this is providing a sense of purpose for our people, bringing our stakeholders along for the journey.”
Direct To Consumer Results
Direct to Consumer was up 9.4% compared to the first quarter of 2022 (+10.5% at current exchange rates), thanks to the solid performance of the brick-and-mortar store network. Comparable-store sales grew above 7% with the optical banners advancing on a faster pace than sun for the first time since more than one year (former GrandVision stores outpacing). E-commerce progressed low-single digit with EyeBuyDirect.com standing out as the best performing platform.
Group revenue by region
North America
North America posted revenue of Euro 2,859 million, up 7.0% compared to the first quarter of 2022 (+11.4% at current exchange rates), visibly accelerating from the fourth quarter and on top of the best quarter of last year.
Professional Solutions was up high-single digit with all product categories contributing nicely. The consumer-facing lens brands, Varilux and Transitions, drove the results together with Shamir. On the frames side, the licensed brands delivered healthy growth, including luxury despite the tough comparison base of last year. The independent channel strongly recovered sustained by the success of the alliances and partner programs. The positive impact from Walman started to fade as the acquisition crossed its anniversary date at the beginning of March.
Direct to Consumer grew high-single digit due to the sound performance of the optical retail banners sustained by the robust demand of the insured customers. LensCrafters delivered low-single-digit comparable-store sales thanks to revived traffic and a strong in-store execution. The number of eye exams processed and converted was up, also thanks to the increased use of teleoptometry which grew threefold compared to last year. Target Optical continued its solid trajectory growing comparable-store sales at high-single digit as well as taking space with the addition of 16 new stores year-over-year.
Comparable-store sales at Sunglass Hut were down mid-single digit as severe weather conditions caused traffic to plummet in the second half of the quarter. E-commerce was up low-single digit with EyeBuyDirect.com continuing to outperform the rest of the banners. EyeMed delivered another strong quarter at double-digit sales growth, now covering 72 million lives.
EMEA
Europe, Middle East and Africa as a whole posted revenue of Euro 2,194 million, up 8.9% compared to the first quarter of 2022 (+6.8% at current exchange rates), accelerating versus the fourth quarter of last year despite comparing with the strongest quarter of last year, when the business was materially driven by post-COVID reopenings.
Professional Solutions segment grew high-single digit, sustained in particular by the key markets of France, Italy and Spain. Branded lenses were a major driver overall, namely thanks to Varilux, Transitions and Eyezen, as well as sun luxury frames, still up double digits on top of a challenging comparison base, on the back of a strong Prada license. In terms of channels, independent opticians and retail chains both positively contributed.
Direct to Consumer segment rose double digits, boosted by the sound brick-and-mortar business, up 10% in comparable-store sales. In the optical segment, all the countries were positive in comparablestore sales (with the only main exceptions of the Netherlands and Belgium), led by the UK and Nordics, helped by the subscription model, and Italy. The progressing integration of the optical retail banners is helping the top line trend, thanks to a better assortment and the upgrade of the in-store execution. Sun comparable-store sales were still strong, with Sunglass Hut locations growing overall in excess of 20%, on top of the triple-digit reopening jump of last year.
Asia-Pacific
Asia-Pacific posted revenue of Euro 750 million, up 12.0% compared to the first quarter of 2022 (+9.4% at current exchange rates). The strong performance in the region was driven by the recovery in China from February as well as a robust sun category in all major countries.
Professional Solutions was up around 10%, supported by the resurgence of business activity in China, turning double-digit positive in February and March. The performance in the country was led by the branded lens portfolio as well as the sun category, with Bolon, Ray-Ban and luxury licenses standing out as fastest growing brands. Demand for myopia management solutions in China remained solid, with Stellest expanding by more than 80% in sales. Among the other main countries in the region, India and South-East Asia expanded at double digits.
The Direct to Consumer business was up in the mid-teens, with all countries contributing. Comparablestore sales in the region were up in the mid-teens. In Australia, comparable-store sales were slightly positive at OPSM, supported by favorable price-mix, and double-digit up at both Sunglass Hut and Oakley. In China, the performance of the brick-and-mortar business accelerated during the quarter, with the Ray-Ban stores in Mainland China positive in comparable-store sales and above pre-pandemic levels. Sunglass Hut continued to grow nicely in South-East Asia.
Latin America
Latin America posted revenue of Euro 349 million, up 11.5% compared to the first quarter of 2022 (+15.7% at current exchange rates), strongly rebounding from the soft performance of the fourth quarter.
Professional Solutions was up high-single digit growing firmly on top of the stellar performance of the prior year. Brazil grew high-single digit with both lenses and frames contributing nicely, while Mexico delivered double-digit sales growth thanks to the strong momentum of the frames business.
Direct to Consumer grew double digits with optical and sun comparable-store sales pacing accordingly at an equal rate. On the optical side, the performance was driven by the Mexican banners growing comparable-store sales at double digits and GMO further accelerating from the previous quarter. Comparable-store sales at Sunglass Hut were up double digits in all countries.
