EssilorLuxottica tops estimates in Q3 despite slowdown in growth of smart glasses

EssilorLuxottica Beats Q3 Forecasts Even as Smart Glasses Growth Slows

EssilorLuxottica Q3 2023 Financial Performance Overview

Revenue Growth Surpasses Expectations

MILAN, Oct 20 (Reuters) - Revenue at eyewear group EssilorLuxottica rose 7.2% at constant exchange rates in the third quarter, beating analysts' expectations, despite a sharp slowdown in the growth of sales of smart glasses.

Smart Glasses Sales Slowdown

Sales of smart glasses, which have been a key driver of the company valuation, rose 20% in the third quarter, compared with a rate of nearly 100% in the April-June period.

Comparative Analysis and Contributing Factors

The slower growth partly reflected a challenging comparison with the same period last year, when sales of smart glasses benefited from the category building up.

Market Challenges and Share Performance

Over the past year, EssilorLuxottica shares have roughly halved in value, weighed down by concerns over intensifying competition and privacy issues surrounding smart glasses, as well as uncertainty about the group's profitability and governance-related questions.

Wearables Business and Revenue Breakdown

For the first time on Tuesday the group disclosed the exact amount of revenue generated by its wearables business, which also includes Nuance hearing-aid glasses, although the latter account for only a small portion of the total.

Wearable sales reached €486 million ($546 million) in the third quarter, equivalent to roughly 6.5% of total revenue.

Overall Revenue and Regional Performance

Total revenue for the quarter came in at €7.49 billion, above €7.36 billion expected by an analyst consensus by Visible Alpha.

Sales in North America, the largest region for the company, rose 4.7% in the quarter, while revenue in Asia Pacific rose by double digits, helped by the myopia management portfolio.

Leadership Commentary

"Our eyecare, eyewear and medtech activities remained a powerful engine of growth, up over 6% in both the quarter and the first nine months of the year," CEO Francesco Milleri and Deputy CEO Paul du Saillant said in a joint statement.

($1 = 0.8899 euros)

(Reporting by Elisa AnzolinEditing by Keith Weir)