Despite a slowdown in smart glasses growth, EssilorLuxottica's third-quarter performance exceeded expectations

Reuters Milan, October 20 - EssilorLuxottica (ESLX.PA) reported a 7.2% increase in third-quarter revenue at constant exchange rates, exceeding analyst expectations, despite a significant slowdown in smart glasses sales growth.

Sales of smart glasses—a key driver for the company’s valuation—increased 20% in the third quarter, whereas between April and June the growth rate was close to 100%.

The deceleration in growth was partly due to a high base of comparison from the previous year, when smart glasses sales benefited from a rapid initial accumulation in the category.

Over the past year, EssilorLuxottica shares have fallen by about half, mainly weighed down by market concerns about intensifying competition in smart glasses, privacy issues (link), as well as doubts over the group’s profitability and corporate governance.

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On Tuesday, the group disclosed for the first time the specific revenue figures for its wearables business, which also includes Nuance hearing aid glasses, although the latter accounts for only a small share of total sales.

Third-quarter wearable device sales reached 486 million euros ($546 million), accounting for about 6.5% of total revenue.

Total revenue for the quarter was 7.49 billion euros, above the Visible Alpha analyst consensus estimate of 7.36 billion euros.

In North America, the company's largest market, sales grew 4.7% this quarter; in Asia-Pacific, revenue grew by double digits driven by the myopia management product portfolio.

“Our eye care, eyewear and medical technology businesses remain strong growth engines, with growth this quarter and in the first nine months of the year exceeding 6%,” Chief Executive Officer Francesco Milleri and Deputy Chief Executive Officer Paul du Saillant said in a joint statement.

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(1 US dollar = 0.8899 euro)

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