Essilor International reported strong sales of the Costa sunglasses in the United States and its Bolon brand in China helped drive sales to €1.66 billion for the first quarter ended March 31, up 12.7 percent in currency-neutral (c-n) terms.
The company, which derives the bulk of its revenue from the manufacture and sale of prescription lens and optical instruments, said sales of Sunglasses and Readers reached €163 million in the quarter, up 31.5 percent from €124 million in the first quarter of 2014. In North America, sales rose €183 million, or 39.2 percent to €650 million.
As expected, sales declined at the company's FGX unit, which distributes readers and other optical products to the drug stores and mass channels in North America. Essilor said it expects that business to rebound in second quarter.
Essilor said the results reflected an 8.7 percent positive impact from changes in the scope of consolidation, including 6.8 percent positive impact of strategic acquisitions, comprising Transitions Optical and Coastal.com, where integration plans remain well on track, as well as the 1.9 percent positive impact of bolt-on acquisitions.
The sharp increase against the euro of the main billing currencies in the first quarter, notably the US and Canadian dollars, the Chinese yuan, the British pound and the Indian rupee, had a significant 12.8 percent positive currency effect on consolidated revenue. The strength of the US dollar, a solid operating performance as well as contributions from recent acquisitions raised the proportion of revenue generated in North America (all divisions combined) to more than 47 percent in the first quarter of the year.
In the Sunglasses & Readers division, growth was driven by the vigorous expansion of Essilor brands in China, including Bolon,, Molsion, and Prosun. Bolon was especially buoyed by the very promising launch of its communications campaign featuring new brand ambassador Sophie Marceau, as well as the extension of its distribution network to the duty free channel. In the United States, Costa sunglasses benefited from the expansion of their geographical coverage. FGX continued to be held back by inventory drawdowns and shrinkage in retail space among certain major accounts in North America, and is expected to perform significantly better as from the second quart er thanks to major distribution contract wins in the United States and the ramp up of Multifocus reading glasses, which enjoyed a very encouraging launch.
