EssilorLuxottica says too early to reinstate guidance as sales halve in second quarter

Oakley and Ray-Ban maker EssilorLuxottica's second-quarter revenue almost halved due to store closures to curb the spread of the coronavirus, it said on Friday, sending operating profit tumbling by more than 90%.

The company, which in March suspended its dividend and scrapped its guidance for the year, said it was too early to reinstate financial targets, adding that the third quarter would be "another period of transition" for the group.

"At this stage, the situation remains too volatile to re-instate financial objectives for the year," the company said in a statement.

Sales in the second quarter plummeted 46% at constant currencies to 2.45 billion euros (2.22 billion pounds), while adjusted operating profit slid 92% to 126 million euros. Bryan Garnier analyst Cedric Rossi said in a note that the near-term recovery "should take a bit more time than some expected".

EssilorLuxottica said 90% of its retail stores and all of its factories and laboratories had been reopened by the end of June as lockdowns measures were gradually lifted.

As stores closed and people stayed at home, online sales soared 68% in the quarter to reach 10% of first-half revenue, up from 5% a year earlier.

The company, formed as a merger between French lens manufacturer Essilor and Italian spectacles maker Luxottica, confirmed it could deliver net merger synergies of 420-600 million euros on adjusted operating profit over 2019-2023.

EssilorLuxottica earlier this month filed a legal action against its acquisition target GrandVision , for which launched a 7.2 billion euro bid last year, seeking information about its management of the coronavirus crisis. GrandVision said on Thursday it had launched an arbitration case against the group to ensure it "complies with its obligations" under a support agreement connected to the deal.