EssilorLuxottica A Strong Quarter with Important Signals for the Road Ahead

EssilorLuxottica closed the most recent quarter with clear momentum, delivering another period of double digit growth despite a challenging global environment. Fourth quarter revenue reached €7.6 billion, up 18.4 percent at constant exchange rates, contributing to full year revenue of €28.5 billion, an 11.2 percent increase year over year. Growth was broad based, with North America, EMEA, and Asia Pacific all posting strong results, reinforcing the group’s global scale and resilience.

What went particularly well was the performance of the Professional Solutions segment, which outpaced Direct to Consumer channels. This highlights continued strength in core eye care partnerships and medical led categories. Innovation also played a major role, with AI enabled glasses surpassing 7 million units sold during the year, and strong early traction in new categories such as myopia management and Nuance Audio. Record free cash flow of €2.8 billion further underscored the company’s operational strength and ability to reinvest while returning value to shareholders.

That said, the quarter was not without challenges. Adjusted operating margin declined by approximately 100 basis points year over year, settling at 16.0 percent at constant exchange rates. Management attributed this margin pressure primarily to U.S. tariffs and the upfront costs associated with scaling AI glasses and other emerging technologies. Net profit was slightly down compared to the prior year, signaling that growth is currently being prioritized over short term margin expansion.

Looking forward, the key issue to watch will be EssilorLuxottica’s ability to balance innovation led growth with margin discipline. While investments in AI wearables, medtech, myopia management, and audiology are clearly driving revenue, the pace at which these categories mature and contribute to profitability will be critical. External factors such as tariffs, geopolitical uncertainty, and currency fluctuations will also continue to test execution.

Overall, the quarter reinforces EssilorLuxottica’s position as the industry’s growth leader while highlighting the transition it is undergoing. The company’s updated five year outlook points to sustained revenue growth with operating profit broadly aligned, suggesting confidence in the long term strategy. For now, the results show a business choosing to invest aggressively in the future, accepting short term margin pressure in exchange for long term relevance and leadership in a rapidly evolving eye care landscape.