CHARENTON-LE-PONT, France—Despite challenging economic conditions this summer, a rise in tourism, which resulted in increased sunglass sales, including luxury brands, helped propel EssilorLuxottica’s third-quarter earnings. The global optical conglomerate (ESLOF: NASDAQ) reported Friday that it generated €6,394 million in consolidated revenue for the three-months ending Sept. 30, 2022, a year-on-year increase of 8.2 percent at constant exchange rates compared to the third quarter of 2021 (+17.0 percent at current exchange rates), according to an announcement from the company.

Francesco Milleri, chairman and CEO, and Paul du Saillant, deputy CEO at EssilorLuxottica commented: “We are pleased with the solid performance our company delivered in the third quarter of this year, with all the regions posting growth, from Asia-Pacific and Latin America, to EMEA and North America. The results once again demonstrate the power of our business model as well as the determination and agility of our almost 200,000 people worldwide, committed to the long-term view we shared at our Capital Market Day this year… Looking ahead, we remain confident in our strategic vision and our ability to deliver on our long-term outlook.”
 
On Capital Market Day, Sept. 14, 2022, EssilorLuxottica management reconfirmed its outlook for mid-single-digit annual revenue growth from 2022 to 2026, at constant exchange rates based on 2021 comparable revenue, with expected revenues in 2026 ranging from €27 billion to 28 billion. Adjusted operating profit as a percentage of revenue in 2026 is expected to range from 19 percent to 20 percent, company executives said.
 
In the third quarter of 2022, EssilorLuxottica’s wholesale business generated revenue of €3,029 million, up 7.8 percent compared to the same period of 2021 (+17.5 percent at current exchange rates). The business expanded at a slightly faster pace compared to the second quarter with rebounding Asia-Pacific and Latin America growing double digits, as well as EMEA and North America progressing at a high- and low-single-digit rate, respectively.
 
The company’s retail business posted revenue of €3,365 million, up 8.5 percent compared to the same period of 2021 (+16.5 percent at current exchange rates). With Asia-Pacific strongly bouncing back, from slightly negative in the second quarter to double-digit growth in the third quarter, all the regions contributed to the segment performance, the same as in the company’s Professional Solutions business unit.
 
Comparable-store sales progressed at 6.5 percent, broadly in line with the previous quarter, confirming the positive performance for both optical and sun banners globally. E-commerce posted mid-single-digit growth, on top of an almost 50 percent jump in the third quarter of 2021 versus 2019, with EyeBuyDirect.com standing out as the top-performing platform in the quarter, growing in the mid-teens range.
 
In brick-and-mortar retail, EssilorLuxottica reported that as of Sept. 30, 2022, it operated a combined 17,727 retail store locations under more than two dozen banners across the globe. Sunglass Hut topped the list of stores, with 3,185 locations worldwide, including 1,676 in North America. LensCrafters was second, with 1,098 locations worldwide, including 1,012 in North America.
 
Third-quarter revenue grew mid-single digit in North America, with LensCrafters and Sunglass Hut respectively low-single digit negative and positive, and Target Optical low-single digit positive. EMEA posted double-digit growth, with sun still fueled by tourism in the high season of the third quarter and optical confirming its solid trajectory.
 
Asia-Pacific strongly recovered, from single digit in the second quarter up to around one third in the third quarter, driven by both optical and sun, benefiting from the easy comparison in Australia, which was affected by restrictions in the same period of 2021. The reopening in China, following severe lockdowns in the first half of this year, also supported the recovery, EssilorLuxottica said.
 
On a regional basis, North America posted revenue of €3,009 million, up 3.4 percent compared to the third quarter of 2021 (+20.5 percent at current exchange rates), a slight acceleration versus the second quarter driven by the Direct to Consumer division.
 
Professional Solutions experienced low-single digit growth. The lens business improved compared to the previous quarter with branded lenses continuing to outpace the unbranded product portfolio. The frame business delivered softer results versus a comparison base which was the toughest of last year. Key accounts, department stores and third-party e-commerce had a lead over the independent channel, which was suffering mostly on the non-program customers. EssilorLuxottica 360 as well as the alliances, in particular Vision Source, kept up their healthy performance.
 
Direct to Consumer grew mid-single digit. Revenue of LensCrafters was down low-single digit on a challenging comparison base.
 
Sunglass Hut was low-single-digit positive, despite what EssilorLuxottica characterized as “an increasingly challenging comparison base” of last year. Results were boosted by continued strong traffic and touristic locations especially during the August holiday period.
 
For the third consecutive quarter, Oakley was the best performing banner in comparable store sales, reaping the benefits of the successful brand building campaigns launched in recent years as well as the store format evolution. The e-commerce business returned to growth mode advancing mid-single digit on top of the two thirds expansion in the third quarter of 2021 versus 2019.
 
EyeBuyDirect.com and SunglassHut.com lead the way, with Oakley.com closely following suit. EyeMed continued its double-digit growth trajectory.
 
EMEA recorded revenue of €2,262 million, up 9.2 percent compared to the third quarter of 2021 (7.6 percent at current exchange rates), benefitting from the contribution of both wholesale and retail segments.
 
EssilorLuxottica’s Professional Solutions business unit continued its positive trajectory, posting high-single-digit growth. The performance was driven by the sun business, with strong luxury brands and the continued solid performance of the lens business.
 
Brick-and-mortar revenue reported double digit growth, driven largely by the sun business. Sunglass Hut, progressively normalizing after the outstanding growth of the two previous quarters, advanced in revenue by 60 percent driven by luxury brands.
 
The optical business continued its growth trajectory, with Salmoiraghi & Viganò posting double-digit revenue growth in Italy and an overall solid performance in the GrandVision network despite a record comparison base last year, led by the U.K., France and Spain.
 
Asia-Pacific was the best performing region posting revenue of €761 million, up 22.7 percent compared to the third quarter of 2021 (+31.7 percent at current exchange rates), with both segments sharply accelerating compared to the second quarter.
 
The Professional Solutions business expanded double digits in all main countries, EssilorLuxottica said. After its negative performance in the previous quarter, Mainland China grew in the mid-teens as a result of fewer COVID-19 lockdowns impacting the country.
 
The lens business effectively leveraged its myopia management portfolio during the back-to-school season. The growth of Stellest and CRT was boosted by the launch of new evolutions, namely Stellest x Crizal Rock and CRT5.0, while the distribution of Nikon D.O.T. and MiSight was off to a promising start, the company said.
 
Brick-and-mortar revenue was up around one third in the quarter, with both optical and sun significantly accelerating compared to the second quarter. LensCrafters improved its performance in China.
 
In Professional Solutions, Brazil grew mid-single digit. The lens business was sustained by the strong performance of Kodak and Varilux while the vivid demand for luxury eyewear brands continued to drive results on the frames side. Mexico accelerated in the third quarter with Argentina and Colombia keeping up the vibrant trend of the previous period.
 
The Direct to Consumer division progressed at high-single digit. The growth continued to be fueled by a strong performance of Sunglass Hut in Brazil and Mexico, both growing more than 40 percent, with the luxury frame portfolio continuing to play a vital role.
 
In the first nine months of 2022, EssilorLuxottica’s total revenue amounted to €18,388 million, up 8.8 percent versus the same period of 2021 (+15.5 percent at current exchange rates). Year-on-year growth remained strong throughout the first three quarters of the year, despite the gradually toughening comparison base, the company said.