CHARENTON-LE-PONT, France—EssilorLuxottica (Reuters: ESLX.PA) announced yesterday that the group's consolidated revenue for the third quarter of 2023 totaled €6,294 million, representing a year-on-year increase of 5.2 percent at constant exchange rates compared to the third quarter of 2022 (-1.6 percent at current exchange rates), with sales strong in professional solutions (wholesale segment) and direct-to-consumer overall. The company stated, "The third quarter was in slight deceleration compared to the first-half due to a weaker sun retail business now also affecting the EMEA region on top of North America, and a tougher comparison base in Asia-Pacific. The prescription business confirmed its resilience relying on a strong price-mix sustained by the successful launch of the Varilux XR series globally and the continued, excellent performance of Stellest. Both segments contributed equally well to the overall results." In the third quarter, the group's overall wholesale segment recorded revenue of  €2,978 million, up 5.7 percent compared to the same quarter of 2022 (-1.7 percent at current exchange rates). Asia-Pacific was up double digits, sustained by a strong Greater China boosted by Stellest. Latin America was up mid-single digit supported by a robust Mexico, the company said.

The group's overall direct-to-consumer or retail segment registered revenue of € 3,316 million, up 4.7 percent compared to the same period of 2022 (-1.5 percent at current exchange rates). All the regions were on the rise in the quarter. North America grew with the optical banners and the managed vision care business, while the sun business confirmed the negative trend of the previous quarters. In EMEA, the optical networks continued to grow strongly reaping the benefits of the integration in progress, while the sun category decelerated affected by adverse weather conditions. Asia-Pacific rose double digits, with the Australian optical business nicely growing against a challenging comparison base. Latin America expanded high-single digit, driven by the optical banners. Overall comparable-store sales were up 4 percent, while e-commerce was slightly negative, mainly dragged by the sun business in North America.

North America revenue was reported up by 2.1 percent at constant currency (-5.6 percent at current exchange rates) with the company noting that North America "is growing in line with the second quarter, up almost 3 percent supported by frames and value-added lenses with a sound performance of the newly introduced Varilux XR." Professional Solutions (wholesale) in North America was up low-single digit for the third quarter. The lens business achieved positive results fueled by the premium brand portfolio, in particular Varilux. The introduction of the XR series in July already delivered a visible impact on the quarterly performance, predominantly in the independent channel, as its penetration ramped up swiftly helping the overall favorable price-mix. Trends in the frame business were bolstered by the continued momentum in the luxury license portfolio. Contact lenses grew strongly, in line with the trend of the first half of the year.

Direct to Consumer retail in North America was up low-single digit. The segment was strongly supported by the vision care offering, including the optical brick-and-mortar banners and the managed vision care division, while the sun business continued to be soft. "Comparable-store sales at LensCrafters, Target Optical and Pearle Vision were all positive, driven by the excellent performance of customers backed by vision insurance and a positive price-mix," the company reported. Comparable-store sales at Sunglass Hut remained negative throughout the quarter.

“We first would like to express our heartfelt solidarity with our colleagues in Israel and their families, as well as with all those suffering from the devastating situation," said Francesco Milleri and Paul du Saillant, respectively chairman and CEO and deputy CEO at EssilorLuxottica. "Our company, like our people, is incredibly resilient. This past quarter, every business and geography in our group contributed to the sound growth, with recent launches like the Varilux XR series and Swarovski gaining traction." 

They continued, "The bold and transformational approach we promised to take at EssilorLuxottica is being realized today through initiatives like Ray-Ban Meta, Nuance Audio and Helix – these moves will light the way for the industry for many years to come. We are doubling down on our strengths, including our operations footprint, with a new plant in Rayong, Thailand, that truly showcases the EssilorLuxottica vision with frames and lenses under the same roof. This is a significant step in our commitment to better address the growing global visual care needs while expanding and balancing our geographical footprint. We are confident and proud to bring every one of our colleagues and partners along on this journey with us.”

Third-quarter EMEA group posted revenue of € 2,317 million, up 6.9 percent compared to the third quarter of 2022 (+2.4 percent at current exchange rates), with both segments equally strong. Professional Solutions was up mid-to-high-single digit. All countries registered a positive performance with the exception of Scandinavia.

Also in EMEA, direct-to-consumer retail was up mid-to-high-single digit. Comparable-store sales in optical were up 9 percent, underpinned by the continued, strong performance in the key banners of Vision Express (UK), Générale d’Optique (France), Salmoiraghi & Viganò (Italy) and Synoptik (Scandinavia). The integration process of the former GrandVision stores is well on track, the company said, with an increasing share of EssilorLuxottica’s own products on the shelves as well as the upgrade of the assortment into a higher value offering. Comparable-store sales at Sunglass Hut were up low-single digit in the quarter with July and August strained by adverse weather but bouncing back in September as the meteorological conditions improved.

Asia-Pacific posted revenue of € 760 million, up 11.7 percent compared to the third quarter of 2022 (flat at current exchange rates), on top of the strongest quarter of last year. Professional Solutions was up double digits for the quarter. China was the best performing country effectively leveraging its myopia control portfolio in the back-to-school season. Stellest doubled its revenues once again. On top of that, the company said the frame portfolio delivered an excellent quarter in Asia-Pacific, driven by Ray-Ban, Oakley and luxury as well as Bolon in China. India, Japan and South Korea all grew double digits. Direct to Consumer was up double digits. Comparable-store sales in OPSM grew on a tough comparison base sustained by a favorable price-mix and a successful in-store execution. The retail performance in China continued to be highly favorable with comparable-store sales advancing at double digits in both LensCrafters and Sunglass Hut. The latter continued to expand strongly also in Southeast Asia.

Within the group, Latin America posted revenue of.€ 377 million, up 6.2 percent compared to the third quarter of 2022 (+4.1 percent at current exchange rates), in slight deceleration compared to the previous quarter. Professional Solutions was up mid-single digit driven by a robust Mexico. The performance in the region was supported by both categories. The frame business was bolstered by a buoyant Ray-Ban in Brazil, while the lens business was boosted by Varilux growing double digits. Direct to Consumer was up high-single digit. The growth of the region was driven by optical with comparable-store sales up accordingly driven by the progressing integration of the former GrandVision banners in Mexico and GMO confirming its sound growth trajectory. Sunglass Hut comparable-store sales continued to be solid in the region.

EssilorLuxottica confirmed its target of mid-single-digit annual revenue growth from 2022 to 2026 at constant exchange rates (based on 2021 pro forma revenue) and said it expects to achieve an adjusted operating profit as a percentage of revenue in the range of 19 percent to 20 percent by the end of that period.