Ray-Ban maker's shares jump as strong eyewear sales temper AI glasses worries

EssilorLuxottica Shares Jump Over 11% as Eyewear Sales Offset AI Glasses Concerns

EssilorLuxottica Outperforms Expectations Amid Smart Glasses Uncertainty

By Gianluca Lo Nostro

Strong Share Performance Following Revenue Beat

Oct 21 (Reuters) - Shares in EssilorLuxottica rose more than 11% on Wednesday after the Ray-Ban maker beat third-quarter revenue expectations, with resilient demand for its core eyewear products outweighing signs of moderating growth in smart glasses.

The move is a sign of easing pressure on the world's largest eyewear company, whose stock has nearly halved in value after reaching a record market valuation of €149 billion ($167 billion) a year ago.

Investor Concerns and Market Reaction

Analysts say the slump began as investors raised concerns over governance and the company's nascent smart glasses business, particularly around privacy and sales expectations.

EssilorLuxottica's shares were up 11.4% by 0712 GMT, leading gains on France's CAC 40 benchmark index and trading at their highest price since August.

Analyst Commentary on Smart Glasses Threat

"The prospect of smart glasses disrupting traditional eyewear will likely stay as a sword of Damocles hanging over EssilorLuxottica," Bernstein analysts said in a note to investors.

With Alphabet's Google set to launch its Gemini AI glasses by the end of 2026, it "makes sense for EssilorLuxottica to espouse a conservative message" on the fourth quarter's expectations, they added.

Financial Results and Business Drivers

Third-quarter revenue at the Franco-Italian company was €7.49 billion, beating the €7.36 billion expected by analysts.

Eyewear Sales Offset Slowdown in Smart Glasses

But unlike previous quarters, sales of the smart glasses made with Meta slowed down compared with higher rates earlier in the year, while the group's eyewear core business was the main growth driver.

($1 = 0.8911 euros)

Reporting and Editing Credits

(Reporting by Gianluca Lo Nostro; Editing by Jan Harvey and Milla Nissi-Prussak)