Regardless of the ongoing macroeconomic and geopolitical challenges, EssilorLuxottica (ESLOY), the French manufacturer of ophthalmic lenses, sunglasses, and frames, continues to deliver double-digit growth.
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The company started the current fiscal year on a strong note, with continued double-digit growth in revenue. Notably, its top line increased 38% year-over-year. Further, comparable sales marked 11.5% growth on a constant currency basis. The ongoing demand for luxury brands, economic reopenings, and acquisitions drive growth at EssilorLuxottica.
CEO Francesco Milleri stated that the company recorded solid performances across all regions and divisions. Milleri added, “We are off to a good sun season, demand for luxury brands continues and our innovative products like Stellest are beginning to rewrite the story of sight for so many people.”
The Ray-Ban and Oakley brands registered double-digit growth during the first quarter.
While EssilorLuxottica continues to perform well, The Wall Street Journal recently reported that one of its units (Essilor Manufacturing (Thailand) Co. or EMTC) has sued JPMorgan for ignoring red flags that led to a theft of $272 million in one of its bank accounts in 2019.
JPMorgan has reportedly denied the allegations.
Bottom Line
The lawsuit’s outcome and its impact on EssilorLuxottica’s financials are unknown. However, economic reopenings, strong demand, acquisitions, and product innovation could continue to support its growth.
EssilorLuxottica projects mid-single-digit annual revenue growth through 2026. Further, it targets an adjusted operating margin of 19-20% in 2026.
On the other hand, TipRanks’ Stock Investors tool shows that investor sentiment has remained negative on EssilorLuxottica. Per the data, 15.4% of investors holding portfolios on TipRanks sold EssilorLuxottica stock in the last 30 days. Furthermore, EssilorLuxottica stock has an underperform Smart Score rating of 2 out of 10 on TipRanks.
While things are looking up for EssilorLuxottica, the current macro and geopolitical environment could play spoilsport.
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