CHARENTON-LE-PONT, France—Reporting increases across all of its businesses for the first quarter of this year, EssilorLuxottica (Reuters: ESLX.PA) announced yesterday that the group's global consolidated revenue for the first quarter of 2023 reached €6,151 million, representing a year-on-year increase of 8.6 percent at constant exchange rates, compared to the first quarter of 2022 (an increase of 9.7 percent at current exchange rates). The first quarter of 2023 was off to a strong start, growing high-single digit compared to 2022, in sequential acceleration from the previous quarter and building on top of the best quarter of last year, which was up 11.5 percent versus 2021 in comparable terms.

The company noted, "The developing regions, Asia-Pacific and Latin America, outperformed the mature markets of North America and EMEA, which were both faced with the strongest quarter of 2022 themselves. All main product categories, sun/optical frames, lenses and contact lenses, grew at a similar pace. From a brand perspective, the blockbuster lenses and Shamir delivered robust results, while luxury was still the top performer on the frames side. Both segments sustained the overall growth."

EssilorLuxottica's Professional Solutions revenue reached €3,026 million and was up 7.7 percent compared to the same period of 2022 (+8.9 percent at current exchange rates), driven by a similar growth profile across the regions, with the exception of Asia-Pacific, which markedly accelerated from February thanks to the reopening of China, the company noted. 

The group's Direct to Consumer segment revenue reached €3,125 million, up 9.4 percent compared to the first quarter of 2022 (+10.5 percent at current exchange rates), thanks to the solid performance of the brick-and-mortar store network. Comparable-store sales grew above 7 percent 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.

All regions saw gains. North America posted revenue of €2,859 million, up 7.0 percent compared to the first quarter of 2022 (+11.4 percent at current exchange rates), visibly accelerating from the fourth quarter and on top of the best quarter of last year. Professional Solutions in North America 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, the company noted.

Direct to Consumer in North America 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, the announcement said.

In EMEA, Europe, Middle East and Africa as a whole posted revenue of €2,194 million, up 8.9 percent compared to the first quarter of 2022 (+6.8 percent 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 in EMEA rose double digits, boosted by the sound brick-and-mortar business, up 10 percent in comparable-store sales. In the optical segment, all the countries were positive in comparable-store sales (with the only main exceptions of the Netherlands and Belgium), led by the U.K. 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 percent, on top of the triple-digit reopening jump of last year.

Sales in Asia Pacific also rose 12 percent to €750 million, driven by the recovery in China from February as well as a robust sun category in all major countries.

Latin America also saw sales increase, posting revenue of €349 million, up 11.5 percent compared to the first quarter of 2022 (+15.7 percent 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 in Latin America 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.

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.”