More Images
CHARENTON-LE-PONT, France—EssilorLuxottica (Reuters: ESLX.PA) yesterday reported consolidated revenue of €4,085 million for the third quarter of 2020 ending Sept. 30, representing a year-on-year decline of 5.2 percent, or -1.1 percent at constant exchange rates. The performance highlighted a strong sequential recovery compared to the second quarter of 2020, when EssilorLuxottica’s revenue was significantly impacted by the COVID-19 pandemic. “The COVID-19 crisis has turned out to be a clear catalyst for EssilorLuxottica to implement key decisions made just before the pandemic: to deepen its integration, simplify its organization, accelerate its decision-making process, digitalize its business and transform the eyecare and eyewear industry while controlling costs and preserving cash,” the company said in a statement.

For the first nine months of 2020, EssilorLuxottica’s consolidated revenue amounted to €10,315 million, representing a year-on-year decline of 21.2 percent, or -20.0 percent at constant exchange rates.

“We are pleased with the strong rebound that our company delivered during the third quarter and proud of all of our employees who made this possible. They swiftly adapted to a challenging environment and a new way of working, enabling the company to continue its solid recovery,” commented Francesco Milleri, deputy chairman and CEO of Luxottica, and Paul du Saillant, CEO of Essilor.

“With the second wave of COVID-19 leading to new lockdowns in Europe, our priority remains the protection of our employees and the engagement with our customers and stakeholders, while we continue to closely manage business continuity and to control costs.

“EssilorLuxottica has become stronger in these unusual business conditions, which have shown the clear benefit of our resilient optical business and our balanced mix in terms of products, segments and geographies,” the executives said.

They cited several factors contributing to the company’s growth, including the recent launch in China of Stellest, a new lens for managing myopia in children, and the recent partnership with Facebook in smart glasses. 

EssilorLuxottica’s Lenses & Optical Instruments division posted revenue down 1.8 percent (up 2.7 percent at constant exchange rates). The Sunglasses & Readers division posted revenue down 8.0 percent (-4.0 percent at constant exchange rates). The Equipment division posted revenue down 14.9 percent (-11.7 percent at constant exchange rates).

Revenue for the company’s Wholesale division fell 5.3 percent (-1.2 percent at constant exchange rates), marking a sharp improvement compared to the second quarter, supported in particular by a positive geographical and price-mix effect. The business was primarily boosted by the overall restocking of the independent channel, which restarted activity after restrictions in the second quarter caused more than two thirds of wholesale customers worldwide to close, according to EssilorLuxottica.

The divisional performance was driven by a strong North America and a positive Europe, while Asia and Latin America continued to be under significant COVID-related pressure. The company’s STARS program closed the quarter slightly above 16,700 doors (after 50 net additions in the period, mostly in the U.S. and Brazil), posting 23 percent growth in revenue at constant exchange rates and representing approximately 18 percent of the division’s total business. Third-party e-commerce platforms played a role in the recovery, particularly in North America, the company reported.

The Retail division registered revenue down 8.3 percent (-4.6 percent at constant exchange rates), with the number of open corporate retail locations going from 90 percent of the total at the beginning of the period to more than 95 percent at the end of the quarter. Adjusted comparable store sales were down 6.4 percent in the quarter.

Business bounced back from lockdown lows of the second quarter mainly due to optical retail and e-commerce, while sunglasses were affected by extremely poor travel flows and tourists’ spending. Sunglass Hut was negative worldwide.

North America posted flat revenue at constant exchange rates supported by the optical business (EyeMed and Target materially positive, LensCrafters neutral at adjusted comparable store sales), Asia-Pacific was single-digit negative at constant exchange rates sustained by a continued strong performance at OPSM in Australia/New Zealand (up double digits in sales), while Europe and Latin America posted more negative trends.

Direct e-commerce continued to outperform, with revenue from mono-brand platforms up almost two thirds at constant exchange rates, boosted by Ray-Ban.com, Oakley.com and SunglassHut.com, all mostly driven by sunglasses sales as well as helped by focused promotions, EssilorLuxottica said.