Essilux celebrates smart glass-driven results in Paris

(Il Sole 24 Ore Radiocor) - Strong buying on Essilorluxottica in Paris (CAC 40 ) in the aftermath of the accounts. The shares of the eyewear group come from a period of weakness: from a record high of EUR 323 touched on 12 November, the stock lost more than 20% at yesterday's close. The world's number one in the sector surprised in terms of sales, driven by more than 7 million pairs of smart glasses (produced in partnership with Meta) sold during the year, well above expectations. In the long term, the focus remains on margins and competition from other players such as Apple and Google entering the market. Competition that, however, does not worry ceo Francesco Milleri: 'We have an advantage in our business model,' he said in an interview with Il Sole 24 Ore.

The fourth quarter numbers surprised the market: sales increased by 18.4% to EUR 7.6bn against expectations that were for +11.2%, driven in particular by North America (+23.8%). Margins were in line with expectations: in particular, the ebit margin fell to 16% from 16.7% a year earlier, as expected. While smart glasses supported EssilorLuxottica's sales last year, they also weighed on profitability: characterised by lower margins, they increased their weight on total sales. Import tariffs in the US also affected profitability, the company said.

However, EssilorLuxottica expects operating profit to be 'broadly in line' with revenue growth over the next few years. This, say Citi analysts, should "reassure investors' recent concerns about significant margin dilution". Equita's analysts point out that "no precise indications on revenue growth expectations have been given, but the message we get," they write, "is that management sees the company structurally on a significantly more robust revenue growth trajectory than the historical trend. Equita thinks that 10% is sustainable, 'not only thanks to wearables but also to the other growth drivers, with CEO Franesco Milleri also emphasising in today's interview with Il Sole 24 Ore the innovation that the company can bring to the medical sector'. Milleri said that in the future the company projects 'a revenue transformation increasingly driven by digital and predictive medicine platforms', emphasising the constant focus on M&A: 'We remain open to extraordinary operations if the right opportunity presents itself,' he said.

Returning to the accounts, on 2026 the management indicated a double-digit growth start to the year in January, while underlining some elements of caution on the margin. "We expect," Equita concludes, "that 2026 may also see some margin dilution, but on a higher top-line, and then a recovery from 2027, with a negligible impact on earnings per share. Analysts say they are 'confident about the group's double-digit growth trajectory in 2026' and underline the weakness of the stock at current levels.