(Bloomberg) -- EssilorLuxottica SA said Thursday that deteriorating market conditions in China are taking a toll on the eyewear company’s sales.
Revenue for the three months ending in September rose 4% year-on-year at constant exchange rates to €6.44 billion ($7 billion), below a Bloomberg consensus estimate of a 5.3% increase.
North America, where the French-Italian group generates about half its sales, grew 1.6% compared with last year. The main driver was a sluggish performance from sunglasses, the company said in a statement.
The performance at Sunglass Hut, while still problematic, showed initial signs of improvement last month, the company said.
Sales in Asia-Pacific rose 5% to €794 million, with China offsetting a negative performance from Hong Kong. Results for greater China were driven by Stellest prescription lenses, EssilorLuxottica said, with sales up 40%.
EssilorLuxottica’s American depository receipts fell 2.3% to a session low following the release on Thursday.
AI Features
The Ray-Ban maker has been channeling investments toward connectivity and artificial intelligence features to embed in its glasses as it turns its focus to medical technology.
Models produced through a Ray-Ban partnership with Meta Platforms Inc. were one of the strongest third-quarter drivers in North America, the company said, calling connected glasses a “disruptive category in digital eyewear.”
Speculation had heightened over the future of the venture when Chief Executive Officer Francesco Milleri confirmed that Meta was weighing a purchase of a minority stake in the eyewear maker.
While Meta Co-Founder Mark Zuckerberg said last month the US group’s interest in EssilorLuxottica is “not going to be a major thing,” he also said an eventual stake acquisition would be a “nice gesture” in light of the long-term partnership.
EssilorLuxottica Chief Financial Officer Stefano Grassi said Thursday the company sees revenue growth picking up in the final quarter of the year, but said there’s “nothing to report” about a potential investment by Meta.
--With assistance from Alberto Brambilla.
(Updates with ADRs in fifth paragraph, company quote in eighth.)
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