Focus: U.S. Stock Q1 2026 Earnings Report Organic revenue growth slowed to 11% in the first quarter of 2026, compared to 18% in the fourth quarter of last year. Following a surge in smart glasses sales last year, the eyewear giant experienced a deceleration in revenue growth at the start of this year, leading to a decline in its share price. In an update released on Wednesday evening, the Franco-Italian eyewear giant reported 11% organic revenue growth for the first three months of 2026, a slowdown from the 18% growth rate seen in the fourth quarter of 2025.
Last year's strong performance was primarily driven by the sale of 7 million smart glasses for the full year, a significant jump from the combined total of 2 million units sold in 2023 and 2024. This business segment benefited from the group's collaboration with technology company Meta to launch the first Ray-Ban branded smart glasses, with Meta providing the associated software. The company's Chief Financial Officer, Stefano Grassi, stated during a post-earnings analyst call that the initial explosive sales effect is diminishing. He noted that the smart glasses category contributed only a mid-single-digit percentage to growth in the first quarter of this year. Concurrently, market supply chain constraints exist; Meta indicated earlier this year that it would pause the European rollout of Ray-Ban smart glasses due to surging demand in the United States. When trading opened on Thursday, shares of EssilorLuxottica, listed in Paris, fell by 4.2% to 193.10 euros. Analysts at Bernstein pointed out in a research note that despite the negative investor reaction to the growth slowdown, EssilorLuxottica might actually prefer only a moderate expansion of smart glasses' contribution to total sales. Compared to the group's traditional eyewear care business, where it maintains strong supply chain control, smart glasses carry lower profit margins. "We expect EssilorLuxottica to pursue a cautious growth strategy for wearables, prioritizing growth through its own retail channels over wholesale business to protect key operational leverage," Bernstein said. "For now, EssilorLuxottica is perfectly capable of balancing the optimal returns from both sides." At the beginning of the year, the group set more cautious medium-term targets, aiming for "robust" revenue growth and roughly matching profit growth, without specifying concrete numerical goals.
Comments