EssilorLuxottica sales slump on coronavirus hit, worst yet to come

Oakley and Ray-Ban maker EssilorLuxottica reported a slump in first-quarter sales on Tuesday and warned of an even bigger hit in the current quarter as the coronavirus outbreak prompted store closures.

The eyewear company, which previously suspended its dividend and scrapped its 2020 outlook due to the pandemic, said revenue had declined further in April.

“Second-quarter revenue and profitability will still be negatively impacted by the crisis, and more severely so than in the first quarter,” it said.

The company’s first-quarter sales fell 10.1% from a year earlier to 3.78 billion euros ($4.12 billion).

EssilorLuxottica, which is both a manufacturer and a retailer with a vast shop network, confirmed it could propose a special dividend before the end of 2020 if the recovery after the end of the outbreak is solid.

The company, which makes eyewear for luxury brands such as Chanel, Prada, and Versace, said that sales of prescription glasses were more resilient than sunglasses in China in the first quarter.
Lockdowns aimed at curbing the spread of the virus are forcing people to stay at home, reducing demand for sunglasses.

“Worldwide needs for better vision are structural and likely to fuel pent-up demand when the crisis fades,” the company said.

The company, the result of a merger between French lens makes Essilor and Italian spectacles maker Luxottica, added that sales in China of prescription lenses returned to growth since the end of April as the country returns to normality.

Opticians group GrandVision, for which the company has made a 7.2 billion euro bid which prompted antitrust scrutiny, also reported a decline in first-quarter sales of 4.4% at constant currencies due to the virus.

The Dutch company added that it would revise its 2019 dividend proposal.