Story
EssilorLuxottica Shares Fall as First-Half Revenue Misses Estimates
Summary
The eyewear giant reported first-half revenue that fell short of analyst consensus, overshadowing a significant beat on operating profit and sending its shares lower.
EssilorLuxottica (EPA:EL) shares declined after the eyewear conglomerate's first-half revenue fell short of analyst expectations, even as it posted a significant beat on profitability. The company's stock traded down 1.2% following the release of its financial results, according to Investing.com.
Revenue Miss Overshadows Profit Beat
The Ray-Ban owner reported first-half revenue of €14.82 billion, slightly below the analyst consensus of €14.91 billion. Growth in the second quarter slowed, with revenue increasing 8.7% at constant exchange rates, missing the estimated 10.1%.
Despite the top-line miss, the company demonstrated strong profitability. Key figures from the first-half report include:
- Adjusted Operating Profit: €2.75 billion, significantly exceeding the €2.44 billion analyst forecast.
- Adjusted Operating Margin: Expanded to 18.6%, or 18.9% at constant exchange rates.
- Free Cash Flow: Increased to €1.07 billion, up from €960 million in the same period last year.
Segment and Regional Performance
AdEssilorLuxottica's Direct to Consumer segment was a key growth driver, outperforming its Professional Solutions division. Comparable-store sales in its retail network accelerated to 8.0% growth in the second quarter, up from 7.0% in the first quarter.
Geographically, the company saw high-single-digit growth in North America, EMEA, and Latin America during the second quarter. The Asia-Pacific region delivered double-digit growth, bolstered by the consolidation of the Top Charoen retail network in Thailand. The company also noted strong performance in innovative products, with its myopia management lens portfolio growing 24% and revenue from AI glasses nearly doubling compared to the prior year.
Management Commentary
In a statement, Chairman and CEO Francesco Milleri and Deputy CEO Paul du Saillant highlighted the positive aspects of the report. "We’re proud to report a successful first half, delivering nearly double-digit revenue growth while increasing adjusted operating profit by 15% at constant currency," they said.
The market's negative reaction suggests investors placed more weight on the revenue miss and the growth slowdown than on the company's robust profitability and cash flow generation.
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