EssilorLuxottica Q2 sales disappoint, raising questions ahead of H2

研报英文原文证据摘录

EssilorLuxottica Q2 sales disappoint, raising questions ahead of H2

Forecast returns

Forecast price appreciation 64.8%

Forecast dividend yield 2.9%

Forecast stock return 67.7%

Market return assumption 7.8%

Forecast excess return 59.9%

Company Description

EssilorLuxottica is a fully integrated player in the design, manufacture and distribution of

ophthalmic lenses, frames and sunglasses. As of FY 22, 47% of sales are generated from

North America, and the company continues to expand through investments in Europe and

fast-growing markets. The company has two divisions: Professional Solutions (48% of FY 22

sales) and Direct to Consumer (52% of FY 22 sales). Having closed its own merger in October

2018, the company acquired GrandVision, the largest optical retailer in Europe, which has

been consolidated since 1 July 2021.

Valuation Method and Risk Statement

Essilor side – Most of the sales are generated in mature markets. Sales in mature markets are

therefore at risk in times of weakening macro consumption and increasing unemployment

rates. More generally, any changes impacting private health care insurance subsidies

(regarding ophthalmic lenses) could impact sales. State health insurance is progressively

coming to an end, and regulation changes should progressively have very limited impacts.

Sales in mature markets can also be threatened by lower traffic in retail chains. As for

emerging economies, since their equipment rate is currently low, any strong decline in GDP

growth could put a temporary stop to double-digit growth. Currency swings can also have a

material impact on the entity, most importantly on USD:EUR. Additionally changes in

customer tastes and distribution channels could also be a risk. Luxottica side – Luxottica’s