EssilorLuxottica to Raise US Prices Amid Tariff Concerns
By Hugo Lhomedet and Alessandro Parodi
(Reuters) -Ray-Ban maker EssilorLuxottica on Wednesday confirmed its forecasts through 2026 but also said it was implementing measures including U.S. price increases to manage the impact of import duties in that country.
The company, which makes lenses and sunglasses in Thailand and China and exports premium frames from Europe, is exposed to potential tariffs of up to 36% on Thailand-made products and 145% on those from China, and up to 20% on imports from Europe.
"Clearly we're not immune to tariffs; we make about 43% of our revenue base in the U.S.", Chairman and CEO Francesco Milleri told analysts in a post-earnings call.
"We're moving toward the price adjustment in the single-digit territory in the U.S. across the different product lines and across our distribution channels", Milleri said.
He added that the company would continue diversifying its supply chain.
While most of Trump's tariffs have been paused for 90 days until July 8, those on Chinese imports and a 10% universal rate remain in place.
The Franco-Italian group reaffirmed its target of mid-single-digit percentage growth in annual revenue between 2022 and 2026 at constant exchange rates, with a goal of 27-28 billion euros ($30.6-31.7 billion) by the end of the period.
It also confirmed it expects adjusted operating profit equal to 19% to 20% of revenues by 2026, compared to 17% at the end of last year.
In the first quarter, EssilorLuxottica posted a 7.3% increase at constant rates in its revenues, to 6.85 billion euros, helped by gains in Europe and the strong performance of its Ray-Ban Meta smart glasses, it said.
Quarterly sales in the Asia-Pacific region, the group's fastest growing market, grew by a yearly 10.4% at constant rates, helped by rising demand for its myopia management solutions, a growing offering which Jefferies analysts expect to achieve 25-35% annual growth in the foreseeable future.
"EL has largely delivered against a high consensus bar in our view, with robust revenue growth in a tough consumer marketplace," RBC said in a note.
($1 = 0.8810 euros)
(Reporting by Hugo Lhomedet and Alessandro Parodi in GdanskEditing by David Goodman and David Gregorio)
