Good morning, and good afternoon, everybody. This is Giorgio Iannella from the IR team. Thank you for joining EssilorLuxottica Q1 Revenue Management Call. The group's CFO, Stefano Grassi, will walk you through the revenue performance of the first quarter of the year. After his presentation, there will be a 30-minute Q&A session. If you want to make a question, please press star followed by five. We kindly ask you to limit your questions to a maximum of two. With that, I hand it over to Stefano Grassi.
Hello, everyone, and welcome to our Q1 trading update. We closed 2025 with a double-digit year. The revenue for EssilorLuxottica last year grew 11.2% at constant currency for the full year. We are now opening up Q1 2026 with another double-digit start. The first quarter saw revenue up 10.8% at constant currency, with a well balanced between Professional Solution and direct to consumer, both of them on a double-digit pace. Our regions show North America up 12.5% at constant currency while EMEA, Asia Pacific, and Latin America, they were all up in the high single digits in Q1.
Our growth profile was very much driven by our traditional business that posted mid-single-digit growth and coupled that on top by a strong demand of AI glasses with a product range that continued to expand thanks to the introduction of the new Ray-Ban Meta optics, two models in particular, Blayzer and Scriber, that were specifically designed to enhance our prescription offer on AI glasses. Those glasses, together with few other innovations, were all showcased at The Switch, the Vision Innovation Summit that was organized for the first time ever in EssilorLuxottica history in the month of March in Orlando, Florida, and in the month of April in Monaco, hosting our Asian and EMEA clients. Was very much the opportunity to showcase our product and innovation to thousands of clients that were actually coming over to experience at full, at the best, EssilorLuxottica.
We now switch gear and talk for a second about foreign exchange. From an FX perspective, let me share that in Q1, we still experienced some currency headwinds. In particular, you might have seen that we have about seven percentage points of difference between constant and current exchange results, and that was very much driven by the U.S. dollar, that during the course of the first quarter, devalued approximately 10% against the euro in Q1. Now, as usual, let's move to the four different regions, and let's start by the largest one, North America. North America was up 12.5% in Q1. That represents the third consecutive quarter of double-digit pace with both segments, Professional Solutions and Direct to Consumer, that deliver another double-digit quarter. When we look at our Professional Solutions, we experienced a strong growth with the Ray-Ban.
Ray-Ban was very much in the spotlight for wearables, the Tribal, the Cyber during the course of Q1, but also on Ray-Ban sun and Ray-Ban prescriptions, they both delivered double-digit growth during the course of Q1. On the lens side, I would say that our growth on the lenses brand portfolio was solid, was strong. That was very much driven by Eyezen, by Varilux, Shamir, and also Nikon. I would probably make a last comment on lenses with respect to Stellest. During the course of Q1, we have about 6,000 doors that are daily dispensing Stellest lens in the U.S., and the Stellest lenses, the myopia management lenses, are gaining continued traction, visibility, and awareness in the optical industry. When we look at our two different distribution channel within the optical channel, I would say that our independents grew solidly during the course of Q1.
In particular, the independents that are part of the Vision Source Alliance, that deliver a high single-digit growth in the first quarter. Also our key accounts grew on a high single-digit quarter. Overall, our two distribution channels within the optical division were very strong. Also, our e-commerce partners were solid at double-digit pace, while the last distribution channel, the department stores, were on the low single-digit territory. If we now move to direct-to-consumer, I must say the sun shined during the course of Q1 in North America for our Sunglass Hut business. Despite what I would say, weather conditions that were definitely not ideal in Q1. We delivered double-digit comp sales in Q1, with January, February, and March all at double-digit pace. We had six consecutive quarters in Sunglass Hut of positive comp sales, and that's obviously extremely reassuring.
We experienced a quarter, the first one, with positive traffic in stores, with both our international and domestic stores that delivered double-digit comps. Last but not least, the growth profile was not only driven by AI glasses, but we coupled that with a strong growth also on our traditional analogical sunglasses. If we move for a second now to the optical part, let me say that we have another outstanding quarter at a high single-digit comp sales in LensCrafters. That happened despite a tough comparison base, as in Q1 last year, we deliver a high single-digit growth in LensCrafters. Price, mix, eye examination, they were all positive. Just a last comment on the fact that we built a first important milestone on our med tech journey by opening the first surgical location in a LensCrafters store in North America in Pennsylvania.
This, I can tell you, will be followed by a few others in the course of 2026. Stay tuned for more news in that respect. Let's move now to EMEA. EMEA delivered a 9.5% at constant-currency. This is the 20th consecutive quarter of revenue growth in the region. Professional Solutions delivered a mid-single-digit quarter. Direct-to-consumer was up double-digit. When we look at our different countries across the region, Italy, U.K., Turkey, Poland and Eastern Europe, they were all up double-digit in Q1. On the Professional Solutions side, price/mix was the primary driver on both frames and lenses, but also volume was positive in the two product categories. AI glasses were a success story in Q1 as we continue to expand our distribution, but at the same time, we continue to gain good productivity on the existing doors.
Taking a closer look at frames, I would say very pleased by Ray-Ban, but also very pleased by our luxury portfolio, in particular, thanks to Miu Miu that in Q1 shine in the EMEA region. On the lens side, Varilux and Transitions were both in the spotlight for a strong growth in Q1. Moving to the direct to consumer, I would say that in EMEA, we had another shining region for Sunglass Hut, that deliver outstanding Q1, a double digit pace with double digit in Iberia, in Italy, and in Turkey. The optical comps were up on the mid-single digit territory for Q1. Vision Express was up double digit, and Générale d'Optique was low single digit comp sales with negative traffic in the quarter. Now moving to Asia Pacific. We had a 9.8% growth at constant currency.
We had a strong start in Asia Pacific, in China, in India, in Southeast Asia. They were all double-digit in Q1. When we look at our Professional Solutions side, in China, the full set of myopia solution delivered an outstanding Q1 at double-digit pace. While on the frame side, I would probably mention two brands, one Bolon and the other is the overall luxury portfolio that was strong pretty much across the board with a growth that was in excess of 10%. In India, our Ray-Ban AI glasses had already an important part in our growth profile of the country. That's obviously very reassuring as we want to expand this product category in fast-growing markets and ideally to replicate the success story that we already have in very mature geographies like EMEA or North America.
If we now move quickly to the direct to consumer side, OPSM posted flat comps in Q1. I would say that tough comparison base and a holiday shift were very much the two main driver, while China, and in particular mainland China, delivered a double-digit comp sales. Now let's move to the last region in the pipe, and that is Latin America. In Latin America, we had a first quarter at mid-single-digit, 6.7% growth at constant currency, high single-digit growth in Professional Solution, mid-single-digit growth in our direct to consumer. Let me give you just three highlights for the Latin America region. Country-wise, Mexico and Argentina up double-digit, Colombia high single-digit, Brazil low single-digit in Q1. The second important highlights pertain to our largest country, Brazil. In Brazil, I would say we experienced a successful launch of Ray-Ban AI glasses.
You remember in recent months, we introduced our AI glasses in both Brazil and Mexico. In Brazil, the launch of AI glasses were very much the opportunity to re-engage our clients, in particular our Óticas Carol franchisee, while on the lens side, we had a lens product category that was flattish in Q1. I think we did pretty well in Q1 2025, so we had a pretty, I would say, strong comparison being last year. You remember in 2025 Q1, we launched a Transitions GEN S, which was a great success story in Brazil throughout 2025. On the direct-to-consumer side, happy to report a double-digit comps in Brazil, very much driven by Sunglass Hut and Fototica. The third important part related to this region pertained to Hispanic LATAM. We had a double-digit growth in Professional Solution in Q1.
All the key countries in the region on Hispanic LATAM, Mexico, Colombia, Argentina, they all deliver a double-digit pace in the quarter with a widespread positive trend across all product categories, frames, and lenses. While on the direct to consumer side, we had a high single-digit comp sales in GrandVision banners and low single-digit in GMO. That concludes our journey across the four geographies. Now let me hand it over to the operator for the usual Q&A session.
Ladies and gentlemen, we will now start the Q&A section. Our first question comes from Oriana Cardani in Intesa Sanpaolo. Please go ahead.
Yes. Good evening. Thank you for taking my two questions. The first one is about the growth trend of the quarter and current trade. What has been the growth progression over the quarter, and what are you seeing in April in each region and for the group? My second question is, on the revenue growth profile in the first quarter for the traditional business, you say that it was up mid-single digit. Can you provide the split between volume, price effect, and mix effect? Thank you very much.
Good evening. Good evening, Oriana. Let me answer your two questions. I think the first part of your question was about the trend. Between January, February, and March, I would say it was pretty consistent throughout the quarter. In April, we still haven't closed the month, but I would say ballpark aligned with the first quarter trend. Your second question is around the profile of growth related to the traditional business, and I would say that probably price mix was predominant versus volume, but volumes were positive as I think I mentioned, both frames and lenses.
The next question comes from Hugo Solvet, Exane BNP Paribas. Please go ahead.
Hi. Hello. Thanks for taking my questions. I have two, please. First, on the use case for smart glasses, did the recent release of the new Meta model trigger the change in adoption, activation rate, or use case? Second, on the base business, growth in the base business of mid-single digits, can you share what's the revenue contribution from Stellest and Nuance Audio, please? Thank you.
Hugo, good evening. The first question is related to the new Meta model. Clearly, the new model have been launched in the month of April, so it's early to say, but let me give you an expectation just using common sense here. Those are two models that have been specifically designed to be worn as a prescription glasses. You might expect the deep penetration of prescription into the overall product assortment might increase. Just to give you an idea, and I think this is an interesting data point, if we just look at the Ray-Ban Meta, which is obviously the most important product that we have, when we look at the revenue of the Ray-Ban Meta, the penetration of Rx is in excess of 30% already, so it's pretty high. I believe those new models will further increase in our own brick-and-mortar store.
That's what I was referring to. It was very much an addition to the penetration that we currently have. The second question was the contribution from Nuance Audio and Stellest. Nuance Audio, it's doing well, I would say. We are about 16,000 doors on overall. The vast majority of those doors are on the B2B side of the business. I would say that we have an increased productivity when we do have a test performed in the stores, in particular in our own stores, and also on the B2B one. Whenever we have tests, the adoption of Nuance Audio, it's exponentially higher. That's obviously very reassuring. I think you will see some new products coming along 2026 in terms of innovation for Nuance Audio, and I think we'll talk about it more during the course of the second quarter, first half results.
Stellest, I think you're referring more probably to the United States. In China, you've seen the success story. In Europe, you've seen the success story, the growth that we continue to post. I would probably spend a bit more time on the U.S. I think in the U.S., it's a good story. I think we're looking at already 6,000 doors. You remember we had 4,000 doors ordering Stellest at the end of last year. In Q1, we're looking at 6,000 doors right now. I think there are really three priorities for now. Continue to establish protocol with doctors. That is the first priority. Remember that Stellest is a journey. It's not just dispensing a lens. It's a journey that will accompany kids from the young age of five, six years old, up to 16, 17 years old.
It's important that the protocol, it's well delivered to the patient, to the families. The second important thing is increasing awareness. Obviously, we are investing to make sure that more and more people, more and more family understand that Stellest exists. That is the only lens that today is available in the U.S. market to manage myopia, to slow down materially progression of myopia in young kids. The third important pillar is clearly distribution. Distribution is critical. I would say that between now and the second quarter, early third quarter, we are going to be activating all the top accounts, all the top key accounts in the United States so that we have thousands of doors that will be activated and ready to dispense Stellest between the second quarter and the second half of 2026.
The next question comes from Julien Dormois, Jefferies. Please go ahead.
Ciao, Stefano. Thanks for taking my two questions. The first one relates to smart glasses. Just trying to do the math here. You mentioned that the traditional business has been growing at a mid-single digit pace, and I would assume that M&A has contributed probably anywhere between 50 and 100 basis points. Is it fair to assume that smart glasses contributed in the mid-single digit range to Q1 growth? That would be the first question. Also a housekeeping question on Stellest and more broadly on myopia management. If I'm right, you previously mentioned that China accounted for roughly 90% of myopia management sales. You posted an impressive 26% growth in Q1 globally, and you specified that China was at 18%. That would basically mean that ex-China sales have doubled in Q1 versus last year.
Wondering whether my calculation is anywhere right, and also whether this is only the effect of U.S. growth helping here.
Hello. Let me answer your questions. With respect to the smart glasses growth in the first quarter, the mid-single-digit contribution and constant currency is correct. When we look at the overall contribution of China, that is the predominant one in terms of country overall on the myopia management solutions. What I can tell you is that it's around 30% of the overall revenues in China, and it's growing double digits during the course of the first quarter.
The next question comes from Hassan Al-Wakeel, Barclays. Please go ahead.
Hi, good evening. Thank you for taking my questions. A couple from me. Just firstly, on Stellest having cleared key milestones previously that you've talked about, it'd be great if you can talk about the commercial traction that you're seeing in the U.S. and then expectations over the short to medium term. Secondly, just on the conflict and what you're seeing in terms of both demand as well as inflation, and whether you expect inflation across some of the key buckets to accelerate over the course of the year, and how you intend to mitigate this. Thank you.
All right. Hassan, good evening. Let me take your two questions. The first one around Stellest. I mentioned before what are our priorities, right, in terms of the development of Stellest in the United States. Again, the establishment of the protocol with doctors, it's critical, it's important. The investment and awareness, it's another important one, and the distribution. Today we have an opportunity, which is very much sized around the 15 million kids that today correct myopia through single vision lenses in the vast majority of the cases. The opportunity for us is to make sure that those kids are equipped with a product that structurally improve their lives over the longer term. This is the message that we're conveying. This is what clinical study clearly prove after years of tests done in China and other parts of the world.
This is the understanding that more and more doctors have in the United States. I believe it's a product that it's incredible. I believe it's a product that it's proven to be successful in other markets, and I think it's just a matter of taking this to the next level, and I believe the team is fully committed to get there. The second question you had is around the situation in the Middle East. We don't see inflationary headwinds. Just to give you and put things in perspective, the Middle East accounts for less than 1% of our revenue base, and in the first quarter closed flattish. That's obviously a very strong performance in the first two months of the quarter, and obviously a negative trend during the month of March as a result of the conflict that took place in the region.
I think we obviously give priority to our people, give priority to sustain our clients, and that's obviously what we're currently doing. We'll keep monitoring the situation, and obviously we will be able to provide you more update as we progress throughout the quarter.
The next question comes from Veronika Dubajova, Citi. Please go ahead.
Ciao, Stefano. Ciao, Giorgio. Thank you so much for taking my questions. I'm going to keep it to two as well, please. My first one is just if you can give us a little bit of a flavor for where you are in terms of your manufacturing, not necessarily for AI glasses. I know you don't want to comment on capacity, but just maybe if you can characterize the constraints that you're seeing in the business. Obviously, there's been a lot of discussion in the press about why some of the models aren't available in certain regions. If you can give us some color, Stefano, how much progress you've made in terms of expanding that capacity and where you stand, even qualitatively, that would be super helpful. My second question is just following back up on Hassan's query about sort of longer term inflationary impacts.
Obviously, we've now had elevated oil prices for a couple of months. That tends to feed into other things like packaging and freight over time. Stefano, you were super successful mitigating that back in 2022, 2023 through price increases. I'm just curious if you have any high level thoughts on sort of how much give there is in the world of consumer, where you might be able to pass some of these input prices on to the extent that we are in a more persistent inflationary environment. Thank you, guys.
Veronika, good evening. Let me take your two questions here. The first one regarding manufacturing, overall supply chain. We have the machine up and running. We have a service level that has been guaranteed. We don't see disruption in our supply chain. Actually, the company's marching well. The service level that we obviously continue to monitor, it's there. It's there for lenses, it's there for frames, and it's satisfactory, I would say. Clearly, logistics had to be adapted and adjusted based on the turmoil that we've seen in the Middle East. But we had no consequence with respect to our manufacturing and distribution capacity. One of the big plus of EssilorLuxottica, and Veronika, you follow us for a long time, you know that very well, is the fact that we have a very widespread network of laboratory, widespread network of manufacturing capacity and frames, logistics centers.
We are capable to eventually overcome challenges that we might see or face in certain parts. That's obviously very important. The second question you have is regarding the headwinds from inflationary situation that might arise potentially. We don't see it. We have something on commodities, but it's a marginal part of our cost base, and I don't think we can call out anything here that is material for us. You might remember the situation in 2022, 2023 well, but you know that that situation was structurally different. It was a widespread inflationary trend that hit the labor market primarily, and our reaction in terms of price adjustment was very much the consequence of what happened especially in the labor market. That's very different from what we see today.
I would tend to make a distinction really from what happened three years ago and what is the situation today.
The next question comes from Domenico Ghilotti, Equita. Please go ahead.
Good afternoon. Two questions on my side. First, I'm trying to get your thoughts on how we should really look at the comparison for the second half, because you will have a tough Q3 and even tougher Q4. I'm trying to understand if you have launches and new products, new countries to cope with this kind of additional challenges or if we have to assume some kind of natural slowdown going into the second half. The second question, if you can share any thoughts at this point also on the margin side. I know it's a call on the sales, but any indication would be very helpful.
Good evening. Buonasera! Domenico. Two question, probably one answer here. You're right, second half of 2026 comparison, it's tougher because last year we grew around 14% in H2, and the first half was a 7% growth at constant currency. No doubt there is a tougher. The answer to your question with respect to top line and also profitability, it's really our guidance. It's the solid growth of our revenue at constant currency year-over-year, and is the anchoring of that growth to the profitability, our adjusted operating profit that we expect broadly in line with that. That's really where we are, and that's where we are progressing to.
The next question comes from Thierry Cotter, Bank of America. Please go ahead.
Yes, good evening. Thank you for taking my questions. Actually, they've been mostly asked, but one is left. On the growth of the wearables in Q1, can you give us an indication of price versus volume? The price of the new products in September has been much higher than a few months earlier. What has been the scale of benefit from the higher pricing of the products please?
The price, it's helping wholesale wearable progressively. You're right, Thierry. That's a good point, because we have seen progressively products being priced higher because of new features, because they're targeted and segmented for customers that needed specific features. We do see a higher contribution within the wearable category from price mix. Clearly, volume continues to be predominant. Just to give you an idea, you remember Ray-Ban Stories priced at $299, now we have a wide range of family that starts at $399 with Oakley Meta, gets up to $379, I'm always talking about dollars here, for Ray-Ban Meta second generation. Then we have the new ones, the Blayzer and the Scriber, priced at $499, and we go up to the $799 of Ray-Ban Meta Display. The purpose and the goal that we have, it's very clear.
We want to enlarge the product range, and we want to make sure that we properly segment our customers based on usage of the product, based on affordability, so purchasing power, and based on features that they will require for one glasses versus another. That's obviously extremely important for us. Just to give you another data point, I think last year we ended up with about 40 SKUs. Today, our product range is made of 11 models and 60 SKUs, and we'll further increase that number in the upcoming months. It's obviously very exciting news here. With respect to the scale, I think we're still building up a category. That's very important for us, and we see continuous growth. I think you can clearly witness that from our growth profile. The mid-single-digit contribution from AI glasses is there.
Again, the higher is that contribution in the growth, the bigger is going to be the scale effect in terms of also margin.
The next question comes from Luca Solca, Bernstein. Please go ahead.
Yes. Good evening. Thank you for taking my question. I would like to ask you two very different questions. One is on retail. We looked at the acquisition of this new retail chain in Thailand. Can you maybe give us a bit of more detail on how you frame the opportunity there? We saw that the penetration in Europe at GrandVision continued to increase, and maybe you could update us on where you stand on both frames and lenses in this chain. I wonder what the magnitude of this opportunity in Thailand could be, and where you start in terms of EssilorLuxottica product penetration in that business. The question instead on the new smart glasses category that you have been pioneering, there's a lot of imitators following you. There's technology companies following on your footsteps. We often get the questions on how exclusive the agreement you have with Meta is.
We are assuming that EssilorLuxottica could distribute a third-party product, third-party smart glasses, but may not engage, at least for a certain amount of time, with product and branding collaborations. Please correct me if I'm wrong in this assumption. Thank you very much.
Luca, good evening. Let me take both your questions. Top Charoen, it's a very important and strategic acquisition for EssilorLuxottica. It's B2B customers for us, in an important and strategic market that is Thailand, with a very promising prescription market. We are taking that step into the Thailand market because we believe we could get the proper scale. We could use Top Charoen as an opportunity to showcase our products. Clearly, there are different variety of stores that are addressing different customers in the countries, and we believe that is a great opportunity for us in that respect. The answer to your question on Top Charoen is the question on progress on integration. We don't talk any longer about integration of GrandVision, because now GrandVision, it's truly part of EssilorLuxottica.
Let me say, the penetration of frames and lenses in GrandVision coming from EssilorLuxottica is now ranging anywhere between 85%-90%. We're pretty much done. It's the end of a journey that has been done successfully. Now, obviously, we continue to see good traction, we continue to see good performance, and we also have a good profitability that we achieve in GrandVision. I would say a very successful story so far, which is not completed in a way, because we continue to grow, to develop products, to launch products in GrandVision, and that's obviously very important, instrumental to elevate the consumer journey in our optical retail banner. The second question, I think, pertains more to the relationship between EssilorLuxottica and Meta. As we probably said a few times already, that relation encompass certain parts that are exclusivity from one side and the other side.
I can't get into the detail of that exclusivity, but it's a very successful collaboration between two companies. The other thing that you have to bear in mind with respect to our own retail is that typically the space that it's made available in our own stores for third-party brands, it's anywhere between 5%-10%. Remember, if there is something entering into that space, there is something else that is going to go out, and that's really what you have to bear in mind. When we'll see new products coming into the market, we'll obviously make the proper assessment according to the desirability and the demand that we might see from the market itself. There are no more question. I want to thank you everyone for the participation today, and wish you a pleasant evening or a pleasant rest of the day. Thank you very much.