EssilorLuxottica - Navigating tariffs

EssilorLuxottica delivered a solid first-quarterly update recently, with revenue up 8.1% year-on-year to EUR6.85 billion, a touch below consensus expectations but still broadly positive given the current operating environment.

Growth was well spread across geographies and channels, led by Europe and the Middle East (up 10%) and supported by double-digit gains in Asia-Pacific, thanks to surging demand for myopia treatments in China. North America was more subdued, up 4%, partly weighed down by currency headwinds and looming US import duties.

The direct-to-consumer segment was solid, growing 10.1%. Online sales also impressed, especially Ray-Ban.com, buoyed by early demand for the Ray-Ban Meta smart glasses. Flagship brands like Oakley, Miu Miu, and Stellest lenses also contributed meaningfully to the momentum.

EssilorLuxottica is also eyeing US factory expansion. With its large American customer base, the group is under pressure to localise production to dodge rising import duties. Building domestic capacity cushions margins and ensures faster delivery, better control over quality, and protection from geopolitical crossfire.

We like this company's long-term growth story.