(BFM Bourse) – The manufacturer of glasses and corrective lenses has exploded the consensus on its first quarter sales. Analysts are impressed by the strength of growth in North America, a market expected to be penalized by the economy.
We sometimes tend to forget it, but EssilorLuxottica is fast approaching 100 billion euros in market capitalization, with 82.77 billion euros at present, which makes it the eighth largest value of the CAC 40, ahead of BNP Paribas.
The publication delivered Thursday evening by the company born in 2018 from the merger between the French Essilor and the Italian Luxottica, further accelerates its trajectory. On the Paris Stock Exchange, EssilorLuxottica gained 6% around 10:50 a.m., signing by far the largest increase in the CAC 40.
Over the first three months of the year, the group published sales of 6.15 billion euros, up 9.7% on a reported basis and 8.6% excluding currency effects.
The deviation from expectations is significant: according to Stifel, the consensus was only counting on an increase of 4% at constant exchange rates. “For a company like EssilorLuxottica with relatively stable business, the magnitude of the company’s outperformance relative to expectations came as a genuine surprise,” the research bureau wrote.
Acceleration of Ray-Ban in China
For its part, UBS appreciates a “solid” and “reassuring” publication. increase in margins in the first half”, adds the Swiss establishment.
The homogeneity of the group’s growth is appreciable. EMEA (Europe and the Middle East) grew by 8.9% over one year, excluding currency effects, Latin America by 11.5%.
Asia-Pacific, a region of promise for society due to the high prevalence of myopia in the population, grew by 12%. The company notably saw a recovery in China starting in February, a message consistent with that of the luxury groups with which some analysts sometimes associate the manufacturer of glasses and corrective lenses. In terms of retail sales, “physical store activity accelerated during the quarter, with Ray-Ban stores posting higher same-store sales in mainland China and above the pre-pandemic level”, underlines in particular the Company.
The integration of GrandVision at high speed
But the big surprise comes mainly from the North America region. In a recent note, Bank of America noted that investors were worried about the group’s prospects because of its exposure to this region which represented, according to the bank, 47% of its income in 2022, while the economic situation is deteriorating in the States. -United.
Contrary to all expectations, growth proved to be vigorous in the fourth quarter, up 7% excluding currency effects, when analysts were only expecting an increase of 2.5%. And shows a notable acceleration from the 2.7% recorded in the fourth quarter.
“Macroeconomic headwinds did not lead to a significant decline. On the contrary, the high-end categories of frames (luxury) and lenses (Varilux, Transitions, etc.) drove growth in the region,” Stifel analyzes.
Another important signal concerns the synergies drawn from the acquisition of the Dutch optical distribution group GrandVision, finalized in 2021. The group’s management told analysts that the integration of this company was progressing “at high speed”, with in particular the closure of the head office of GrandVision which must be effective in the second or third quarter. Stifel says he is “reassured” by these announcements which should offer protection to the company’s margins in the face of cost inflation.
Julien Marion – ©2023 BFM Bourse
