Industry News
Essilor and Luxottica Report Increased Revenues for 1Q2017
Early this year Essilor and Luxottica annouced the proposed merger of both companies into EssilorLuxottica. According to the companies, the proposed combination of Essilor and Luxottica progressing very well. Both companies reported for the first quarter of 2017 good results.
Luxottica's first quarter revenues were up 5.2% as a result of the Group’s strong performance in Europe and Latin America, a favorable foreign exchange rate environment and the excellent performance of the Ray-Ban brand which confirmed its vitality driven by the success of its latest collections and new Ray-Ban stores in China and United States.
Both the Wholesale and Retail divisions contributed to quarterly positive results. The wholesale business grew by 2.5% compared to the first three months of 2016 (unchanged at constant exchange rates), despite the stricter commercial policies Luxottica implemented in North America and China. The retail business recorded a 7.1% increase (+3.3% at constant exchange rates) thanks to the growth of new stores, the positive performance of optical retail in China and Australia, along with Sunglass Hut in Europe and Latin America, and the consolidation of Salmoiraghi & Viganò’s net sales into the Group's results. Comparable store sales , negative in the period, were the result of a series of commercial decisions aimed at enhancing brand equity and sharply reducing discounts and promotional periods across the Group’s retail network. While this had a negative impact on first quarter net sales, it was less significant than initially projected and is set to positively affect the Group’s income statement results.
The growth of Luxottica's e-commerce platforms, equal to 6%, was affected by the drop in promotional activities at Oakley.com and SunglassHut.com in the quarter. Ray-Ban.com continued to grow double-digits, confirming the strength of the brand and the consumer's willingness to buy through authorized channels.
In Australia, positive results were driven primarily by OPSM's excellent performance stemming from new assortment policies introduced in 2016 along with the ability to attract consumers through the quality of in-store eye-exams.
Essilor International announced that consolidated revenue for the first quarter of 2017 increased by 10% to €1,962 million. Newly acquired companies increased Essilor's revenue by 4.6%. This was composed primarily of the carryover effect from acquisitions consolidated during the 2016 fiscal year, particularly Photosynthesis Group (MJS) in China and MyOptique Group in Europe.
Essilor's e-commerce activities in North America posted like-for-like sales growth of around 10%, driven by eyeglasses sales and reflecting a substantial progression in sales for EyeBuyDirect™, solid delivery from Frames Direct™ and improved trends in Clearly™.
Since the beginning of the year, Essilor has completed six new transactions representing combined revenue of around €40 million on a full-year basis. In addition to the previously announced acquisitions of Visolab Produtos Opticos Ltda in Brazil, Mangalsons Optics PTE Ltd in India, Sun Optical Technologies in Ethiopia and Optitrade Logistics Center (OLC) in the Netherlands, Essilor increased its equity investment in the joint venture Topcon Visioncare Japan (TVJ), the distributor of Topcon’s optometry line and Essilor’s lens finishing line to opticians in Japan, to 51%. This transaction will strengthen Essilor’s expertise in the optometry field and will enhance its offering to Japanese eye care professionals. In early April, the Company also finalized the acquisition of a majority stake in Optical Center, an integrated prescription laboratory that operates around 50 optical stores in Guatemala.
