Ray-Ban maker EssilorLuxottica beats estimates as tariff refunds boost profit
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Ray-Ban glasses, manufactured by EssilorLuxottica, stand on display in their exhibition space at SILMO in Villepinte, near Paris, France September 24, 2022. REUTERS/Benoit Tessier
By Elisa Anzolin and Gianluca Lo Nostro
MILAN, July 28 (Reuters) - Franco-Italian eyewear group EssilorLuxottica reported a 15% rise in first-half adjusted operating profit on Tuesday, comfortably beating analysts' expectations, as the Ray-Ban maker benefited from U.S. tariff refunds.
EssilorLuxottica's adjusted operating profit totalled €2.75 billion ($3.13 billion) in the six months to June 30, compared with a Visible Alpha analyst consensus of €2.46 billion.
In recent weeks, some European companies, including Philips, have reported margins ahead of market expectations, partly helped by U.S. tariff-related reimbursements.
"We had a strong price mix, for sure that was an important help, and we also had the net positive impact year-over-year from (refunds of) tariffs in the U.S. And those were really the two main drivers of the gross profit accretion," finance chief Stefano Grassi said on a call with analysts.
The company had increased U.S. prices last year to help offset the impact of import duties in that country. North America is EssilorLuxottica's largest market.
AI SMART GLASSES SALES NEARLY DOUBLED
Second-quarter revenue rose 8.7% at a constant exchange rate, supported by an almost doubling of sales from AI smart glasses produced in partnership with Meta and a 24% increase in revenue from the myopia portfolio over the same period.
The company said its core eyewear and eyecare business, which accounts for the vast majority of revenue, delivered mid-single-digit growth during the period.
Revenue was €7.7 billion, slightly below analysts' expectations of €7.8 billion, according to the Visible Alpha consensus.
Shares in the group have nearly halved from their mid-November peak partly on concerns over the smart glasses outlook, profitability concerns and uncertainty at major shareholder Delfin.
In late June, the two companies unveiled a new range of lower-priced AI smart glasses, starting at $299. The new models will be manufactured outside EssilorLuxottica's facilities.
The company confirmed the medium-term outlook it provided earlier this year.
($1 = 0.8774 euros)
(Reporting by Elisa Anzolin and Gianluca Lo Nostro; Editing by Emelia Sithole-Matarise)
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