Summary
- H1 operating margin rose 100 basis points to 18.4%
- Comparable revenue rose 7% to 6.39 bln euros
- Sales growth in North America worsens quarter-on-quarter
- Shares down 1.7% at 1150 GMT, fell nearly 4% earlier
Ray-Ban parent EssilorLuxottica (ESLX.PA) saw sales growth decline in North America in its latest quarter, sparking concerns about its exposure to recession in the United States and counteracting an improvement in its operating margin.
The Franco-Italian company whose brands also include Varilux and Oakley said its adjusted operating margin grew by 100 basis points to 18.4 percentage points in the six months to June 30, powered by its high-end brands.
“The main driver of that margin expansion for the first half was very much our price mix,” finance chief Stefano Grassi said on a call with analysts, signaling new product launches and strength of its branded and luxury lens portfolio.
However, the group said sales increased sales in North America had declined quarter-on-quarter, as business conditions in the United States worsened.
Luca Solca Bernstein analyst said in an email that EssilorLuxottica’s results and the analyst call indicated a slump in the United States, the group’s largest market.
Solca added:
“This dovetails with market concerns about an upcoming recession, to which EssilorLuxottica would be more exposed, given its larger and broader consumer audience.”
Shares of the company slid 1.7% at 1150 GMT after plunging about 4% earlier in the day. Still, CFO Grassi said the company expected the North American business to remain in positive territory this month, in both consumer and professional segments.
EssilorLuxottica’s comparable revenue climbed 7% to 6.39 billion euros ($6.5 billion) in the previous quarter at constant exchange rates, as Europe, the Middle East, and Africa (EMEA) region continued to rebound with double-digit growth.
The group also restated its medium-term targets for 2022 to 2026.
($1 = 0.9790 euros)
