EssilorLuxottica Aktie

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. [Operator Instructions] With that, I hand it over to Stefano.

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. And 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 on the high single digit 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 to continue to expand sensory introduction of the new Ray-Ban Metaoptics, 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 and was very much the opportunity to showcase our products and innovation to thousands of clients that were actually coming over to experience at full at the best EssilorLuxottica.

If 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 7 percentage points of difference between constant in current exchange results. And that was very much driven by the U.S. dollar that during the course of the first quarter, devaluated approximately 10% against euro in Q1. Now -- as usual, let's move to the four different regions. Let's start by the largest one, North America.

North America was up 12.5% in Q1. That represents the third consecutive quarter up double-digit pace with both segment Professional Solutions and Direct to Consumer that deliver another double-digit quarter. When we look at our professional solution, we experienced a strong growth with the Ray-Bans.

And Ray-Ban was very much on the spotlight for wearables, to triple the size 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 continuous traction, visibility and awareness in the optical industry. When we look at our two different distribution channels 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 delivered a high single-digit growth in the first quarter.

But also our key accounts grew in a high single-digit quarter. So overall, our two distribution channel 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 store 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 sixth consecutive quarter 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.

And 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 unlogical sunglasses. If we move for a second now to the optical part, let me say that we had another outstanding quarter at a high single-digit comp sales in LensCrafters. And that happened despite a tough comparison base as in Q1 last year, we delivered high single-digit growth in LensCrafters.

Price/mix, eye examination, they were all positive. And just a last comment on the fact that we built the first important milestone on our Med-Tech journey by opening the first surgical location in our LensCrafters stores in North America in Pennsylvania. And this, I can tell you, will be followed by a few other in the course of 2026.

So stay tuned for more news in that respect. Let's move now to EMEA. EMEA delivered 9.5% at constant currency. It 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're 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 were positive in the two product categories. AI-glasses were a successful 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 and 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 on 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 delivered outstanding Q1 at double-digit pace with double digit in Iberia, in Italy and in Turkey.

The optical comps were up on a mid-single-digit territory for Q1. Vision Express was up double digit, and General Optic 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 to 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 have already an important part in our growth profile of the country. And 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 hyster shift were very much the two main driver, while China and in particular, Mainland China delivered a double-digit comp sales. But now let's move to the last region in the pipe, and that is Latin America.

In Latin America, we had a first quarter a mid-single digit, 6.7% growth at constant currency, high single-digit growth in Professional Solutions, 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 highlight 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 reengage our clients, in particular, our Oticarol 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 base last year. You remember in '25, Q1, we launched 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 [indiscernible].

The third important part related to this region pertains to Hispanic Latin. We had a double-digit growth in Professional Solutions in Q1 all the key countries in the region on Hispanic LatAm, Mexico, Colombia, Argentina, they all delivered 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. So that concludes our journey across the four geographies. And now let me hand it over to the operator for the usual Q&A session.

[Operator Instructions] Our first question comes from Oriana Cardani, Intesa Sanpaolo. Please go ahead.

Thank you for taking my two questions. The first one is about the growth trend of the quarter and current rate what has been the growth progression over the quarter? And what are you seeing in April in each region and for the group.

And my second question is on the revenue growth profile in the first quarter for the traditional business, you say it was up mid-single digit. Can you provide the split between volume, price effect and mix effect. Thank you very much.

Let me answer your two questions. I think the first part of your question was about the trend between Jan, Feb 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, BNP Paribas.

I have two, please. First, from the use case for smart glasses, did the recent release of the new Metal model triggered the change in adoption activation rate or use case. And second on the base business growth in the base business of mid-single digits. Can you share what's the revenue contribution from Stellest nuance, please?

So 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. So you might expect the de-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 Varilux is in excess of 30% already. So it's pretty high.

And I believe those new models will further increase in our own brick-and-mortar store. That was 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 in Stellest. So nuance, 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.

So whenever we have test the adoption of nuance, it's exponentially higher. So that's obviously very reassuring. I think you will see some new products coming along 2026 in terms of innovation for nuance. 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 door 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 lens. It's a journey that will accompany kids from the young age 5, 6 years old up to 16, 17 years old.

So 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 exist 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.

And 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 in a 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.

The first one related 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. So is it fair to assume that smart glasses contributed in the mid-single-digit range to Q1 growth. So that would be the first question.

And 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. So you posted an impressive 26% growth in Q1 globally, and you precise that China was up 18%. So that will basically mean that ex-China sales have doubled in Q1 versus last year. So wondering whether my calculation is anywhere right and also whether this is only the effect of U.S. growth helping here?

Hello. So let me answer your questions. So with respect to the smart glasses growth in the first quarter, the mid-single-digit contribution in 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 solution -- 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. Barclay.

A couple for me. Just firstly, on Stellest, having cleared key milestones previously that you've talked about. It would 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?

And then 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 Meta get this.

All right. So let me take your two questions. The first one around Stellest. So I mentioned before the fact of what are our priorities, right, in terms of the development of Stellest in the United States. And again, the establishment of the protocol with doctors is critical. It's important the investments and awareness it's another important one and the distribution.

Today, we have an opportunity, which is very much size around the 50 million kids that today correct Myopia through single vision lenses in the vast major capital cases. The opportunity for us is to make sure that those kids are equipped with the products that improve the life, structurally improve their lives over the longer term.

And this is the message that we are conveying. This is what clinical study clearly prove after years of test done in China and other parts of the world. And 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. And the second question you have is around the situation in the Middle East. So 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.

And 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 Veronica Dubajova, Citi.

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 necessary 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-- some of the models aren't available in certain regions. And so if you can give us some color on how much progress you've made in terms of expanding that capacity and where you stand even quantitative or qualitatively apologies that would be super helpful.

And then my second question is just following back up on Hassan's query about sort of longer-term inflationary impacts obviously we have now had elevated oil prices for a couple of months, that tends to be into other things like packaging and freight over time. And Stefano we 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 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.

Let me take your two questions here. So 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 companies marching well. The service levels that we obviously continue to monitor that -- 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 we are very-- that very well is the fact that we have a very widespread network of laboratory, quite network of manufacturing capacity on frames, logistic centers.

So we are capable to eventually overcome challenges that we might see or face in certain parts. So that's obviously is very important. The second question you have is regarding the headwinds from inflationary situation that we -- that might raise potentially. We don't see it. I mean we have something on commodities, but it's a marginal part of our cost base.

And I don't think it's -- we can call out anything here that is material for us. You might remember the situation on 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 on the -- especially on the labor market. That's very different from what we see today. So I would tend to make a distinction really from what happened 3 years ago and what is the situation today.

The next question comes from Domenico Ghilotti Equita.

Two questions on my side. First, I'm trying to get your thoughts on how we should 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, in 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.

And 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.

So two questions, probably one answer here. you're right, second half of 2026 comparison is tougher because last year, we grew around 14% in H2. And the first half was a 7% growth at constant currency.

So no doubt there is tougher. But the answer to your question with respect to top line and also profitability. It's really our guidance. It is 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.

So that's really where we are, and that's where we are progressing to.

The next question comes from Thierry Cota, Bank of America.

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. So what has been the scale of benefit from the higher prices of the products?

So the Price, it's helping also on 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 directed and segmented for customers that needed specific features. And so we do see a higher contribution within the wearable category from price/mix.

Clearly, volume continues to be predominant. But just to give you an idea, you remember Ray-Ban story is priced at $2.99. Now we have a wide range of family that starts at $3.99 with Oakley Houston gets up to $3.79. 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 $4.99, and we go up to the $7.99 of Meta Ray-Ban display.

So the purpose and the goal that we have, it's very clear -- 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.

And 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, 6-0 SKUs, and we'll further increase that number in the upcoming months. So it's obviously very, 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. And 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.

I would like to ask you a question -- two very different questions. One is on retail. We looked at the acquisition of this new retail sale 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 continue to increase.

And maybe you could update us on where you stand on both frames and lenses in this chain. But 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?

A question instead on the new smart glasses category that you've 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 third-party products -- third-party smart glasses, but may not engage at least for a certain amount of time with product and branding collaborations. But please correct me if I'm wrong in this assumption.

So let me take both your questions. So Top Charoen, it's a very important strategic acquisition for EssilorLuxottica. It's a B2B customers for us, an important -- in an important and strategic market that is Thailand with a very promising prescription market.

So 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 progression on integration. We don't talk any longer about the integration of GrandVision because now GrandVision is truly part of EssilorLuxottica. But let me say, the penetration of frames and lenses in GrandVision coming from EssilorLuxottica is now ranging anywhere between 85% to 90%.

So we are pretty much done. It's the end of a journey that has been done successfully. And now obviously, we continue to see good traction. We continue to see good performance, and we also have a good profitability that we achieved in GrandVision. So 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 and 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. And 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 is made available in our own stores for third-party brands, it's anywhere between 5% to 10%.

So 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. Then when we'll see new products coming into the market, we'll obviously make the proper assortment according to the desirability and the demand that we may see from the market itself.

So there are no more questions. 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.

Good morning, and good afternoon, everybody. This is Giorgio Iannella from the IR team. Thank you for joining EssilorLuxottica Interim Results Management Call. The Group Chairman and CEO, Francesco Milleri; the Deputy CEO, Paul du Saillant; and the CFO, Stefano Grassi, will walk you through the business and financial highlights of the first half of the year. After their presentations, there will be a 30-minute Q&A session [Operator Instructions]. With that, I hand it over to Francesco.

Welcome back, everyone, and thank you for joining us today. I'm pleased to reconnect with you and to share where we stand with the execution of our new strategy, which is clearly driving the group business momentum. This is in line with our plans, and I believe it will become more and more visible in the near future as the new projects, products and medical services will translate directly into numbers. 2025 marked a year of sharp acceleration for EssilorLuxottica as we manage our deep transformation from a traditional optical company into a leading med-tech and data-driven group. This broader scope now better defines and makes clear our core business, strategic focus and investment priorities. The new ambition of our group is to shape the future of health and human performance.

This evolution represents the key engine behind our faster revenue growth and the driver of the positive progression of our profits. The strong increase of revenue in the fourth quarter reflects the solid performance of our overall business, further reinforced by our clear leadership in wearable and med-tech. We are confident that this trajectory will continue, confirming the strength of our vision and the excellence of our execution. Stefano will walk you through our financial performance later on. I would just like to highlight that we recorded revenue growth at constant currency above 18% in the fourth quarter and 11% in the full year. For the first time, we see a double digit in our history. With EUR 28.5 billion revenue in the full year, the adjusted operating profit reached EUR 4.5 billion after EUR 300 million headwind from U.S. tariffs and materially adverse exchange rates.

Solid operations are clearly shown by a strong free cash flow of EUR 2.8 billion, EUR 400 million higher than last year. At this stage, the new category we have created in AI glasses is at the heart of this journey. In 2025, we sold more than 7 million units of AI glasses, posting exponential growth, driven by the strength of our iconic brands, Ray-Ban and Oakley across all geographies and channels. This success of our wearable brands has been made possible by our unique logistics and distribution footprint. with 18,000 stores in retail and 300,000 partners in wholesale, forming the most powerful go-to-market platform for a product that is first and foremost, a vision care device. This view is further reinforced by rapidly growing attachment rates of prescription lenses and the already high penetration of photochromic lenses, which together are delivering a strong increase in daily usage and confirming the relevance of this category for all consumers.

Wearables are now becoming part of our normal life. As a testament to our capacity to roll out this new category and expand its scope, the recently launched Oakley Vanguard unlocks new use case across both sport and lifestyle. More is coming in terms of brands and futures with increasing levels of personalization, not only in daily and social life, but also in professional activities. Several projects are already underway with banks, consulting firms and health care institutions, opening up larger and sometimes unexpected market opportunities. AI glasses are not only the evolution of traditional eyewear. They are above all, a new digital platform that brings together vision correction, by sensors, audio, cameras and artificial intelligence into a single system. We are increasingly convinced that this category has the potential over time to replace the mobile phone as the primary personal computing interface in both personal and professional context.

In 2025, our plan has been focused on growth and scale. We are convinced that leadership and consistent market share in this strategic area are essential for the future of our Med-Tech vision. This acceleration require significant upfront investments in both OpEx and CapEx across R&D, operations, marketing and communications. As expected, these initial investments are reflected in our P&L, but still the group reached record earnings results. As our Med-Tech and wearables segments reach scale, we expect profit to accelerate and the operating margin to regain momentum for both EssilorLuxottica and the whole optical and Med-Tech industry. The future direction of the company is now set around a clear and well-executed strategy based on emerging field of Oculomics. This enables us to expand our scope from vision correction into medical support and the early detection of metabolic, neurological and cardiovascular conditions.

In line with this vision, our journey will continue to extend into advanced health technologies, predictive medicine, diagnostic instruments and clinical practices, including surgical applications. One of our most important achievements has been our ability to integrate in a truly holistic way, AI glasses as a consumer-facing evolution with a data-driven med-tech, health care and clinical business. You will see our M&A approach evolve with an increasing focus on start-ups in vertical medical AI, advanced diagnostics and support for clinical studies. At the same time, we will continue to improve and extend our logistics and distribution footprint through both internal and external growth across physical retail and e-commerce.

The convergency of these 2 dimensions, digital and physical, together with our strong medical reputation is what we believe makes our strategy truly unique and almost impossible to replicate. Finally, in hearing aid glasses, we continue to invest in a vertical application of our technology in the audio space, bringing in new customer segments and incremental revenues. We have high expectation for the launch of new products in the second half of this year, combined with our strategy to expand audio feature across our wearable through a subscription-based approach. In conclusion, we have closed a remarkable year and are starting the new one with strong confidence and clear plans to be at the forefront of the convergence of multiple sector and different industries into glasses. That is why EssilorLuxottica is taking leadership in the whole med-tech space.

Last word on our financial road map, why we confirm we are fully on track with our long-term outlook dating back to March 2022. Today, we are updating it, planning to deliver over the next 5 years, a solid and broadly aligned growth of revenues and operating profits. With that, I will now hand over to Paul. Thank you.

Thank you, Francesco, and hello, everyone. Happy to reconnect with you. As you have heard, in 2025, EssilorLuxottica took further decisive steps in its strategic journey and delivered solid financial results, driven by an ambitious vision, strong execution and a relentless focus on innovation. This performance is underpinned by our best-in-class manufacturing and logistics platform, our global and resilient supply chain and a unique omnichannel distribution model that enables us to scale innovation efficiently and consistently across markets. Today, I would like to take a step back and focus on what sits at the very core of our vision and strategy in the traditional business, which is the scientific ecosystem we are building around eye health.

Let me start from lens innovation and myopia management in particular, a field that we have been investing in for almost half a century and where we further strengthened our leadership in 2025. Stellest has become a global reference in myopia management, supported by robust long-term clinical evidence and is now worn by millions of children worldwide. Importantly, Stellest remains the first and only spectacle lens to have received FDA market authorization in the United States. This is a decisive recognition of myopia management as a medical treatment. In 2025, we took a major step forward with the launch in China of Stellest 2.0, our most advanced myopia management lens to date. We have maximized the lens power and aspiricity of the micro lenses based on our fundamental research at a neurobiological level, leading to almost 2x lower actual length growth after 12 months in Stellas 2.0 versus the previous generation.

This new generation is being rolled out in EMEA and will apply for authorization with the FDA. At the same time, we are moving earlier in the patient journey. With Stellest Plano solution, we are addressing children at risk of developing myopia based on clinical evidence showing that delaying onset can deliver long-term benefits comparable to years of slow progression. This marks a shift from management toward evidence-based prevention, a meaningful evolution. Our approach to myopia is deliberately multi-technology and multi-brand. Alongside Stellest, SightGlass Vision Dot technology commercialized under Nikon and Kodak in China continues to gain great traction, reinforcing our portfolio and offering eye care professionals a broader set of clinical validated solution across different price points.

As a result, in 2025, total revenue generated by our myopia management portfolio grew by 22%. Beyond myopia, innovation across our lens portfolio remains strong. In presbyopia, brands such as Varilux, Nikon and Shamir continue to introduce designs that combine optical precision, personalization and comfort, leveraging AI-driven modeling. Transition, extending light management benefit across prescription, plano and smart eyewear is increasingly becoming a standard feature in connected glasses. In frames, 2025 was a year of strong brand momentum and creative activation across our portfolio. On the licensing side, we renewed our long-term partnership with Burberry through 2035, reaffirming a collaboration rooted in craftsmanship and innovation, and we launched the first-ever collaboration between MIU MIU and Puyi Optical, demonstrating our ability to blend exclusivity, design excellence and retail leadership, particularly in Asia.

Across our proprietary brands, we further strengthened Ray-Ban's creative leadership by naming A$AP Rocky as its first ever creative director. We celebrated Oakley's 50th anniversary, and we are now seeing the brand gain exceptional global visibility through its presence at the Winter Olympic in Italy. At the core of all our initiatives is science. Last year, we formalized this commitment with the creation of our Scientific Advisory Committee, bringing together 5 world-class experts across physics, mathematics, ophthalmology, bioethics and neuroscience, including Nobel Price and Fields medal [indiscernible]. Their role is to challenge us, guide us and help us explore new frontiers from oculomics to AI and neuroscience, always with patient in mind in areas of human health where ethic matters as much as innovation.

We are reinforcing our ecosystem through open collaboration. Our partnership with the Politecnico di Milano continues to advance research at the intersection of optics, bioengineering and artificial intelligence, while the joint smart eyewear lab is shaping the future of connected vision devices. Our membership in the collaborative community on ophthalmic innovation allows us to contribute to global standards and consensus building across myopia, AI and data-driven ophthalmology. Through our collaboration with Chips-IT, we are also investing in application-specific semiconductor designed to enable the next generation of smart and medical eyewear. Finally, at our [indiscernible] R&D lab in Paris, teams are working at the frontier between vision science and neuroscience, exploring how visual signals are processed and transmitted by the brain.

This research is essential to deepen our understanding of perception and cognition and to unlock the next wave of optical and neuro adaptive solutions. Sustainability remains a fundamental pillar of our strategy, guided by a clear road map across climate, circularity, responsible operation and social impact. This year, our efforts were recognized by leading external benchmarks. We achieved an A rating for climate from CDP, placing EssilorLuxottica among [indiscernible] organizations. In parallel, our Standard & Poor's Global Corporate Sustainability Assessment score reached 66, securing the third position in our industry worldwide out of more than 250 assessed companies. To sum up, 2025 confirm that EssilorLuxottica growth is built on a unique combination of clinical science, technological depth and industrial scale.

From med-tech to neuroscience, from eyewear to eye health, we are not only innovating with our industry, we are redefining its boundaries. At the same time, with our new long-term outlook, we are looking at the next 5 years with solid ambitions on our financial delivery. With that, I will now hand over to Stefano. Thank you.

Thank you, Paul, and welcome to our full year 2025 earnings results. We closed another record year for EssilorLuxottica with revenue that grew 11% at constant currency, almost 2x faster than the 6% that we delivered in 2024. North America, EMEA and Asia Pacific, they were all up double digit, while Latin America delivered a high single-digit year. In an outstanding quarter like 2025, Q4 was actually the strongest one for all the year. Our top line was up 18.4% at constant currency, 12.1% at current exchange results. These numbers are even more remarkable in consideration of the fact that in Q4, Supreme and Heidelberg became full comparable as they were both included in 2024 and 2025. So fully comp for our reporting. In Q4, our North American business was up 24%. EMEA delivered 16% sales growth, while Asia Pacific was up 12%.

And the last, Latin America delivered 8% sales lift in the quarter. Last note on foreign exchange. For the third consecutive quarter, we had some headwinds, unfortunately, in our results with about 6 percentage points of difference between constant and current exchange results. As usual, the main driver for that is the U.S. dollar. They had a devaluation of approximately 8 percentage points year-over-year versus euro. At those currency level, you might still expect some currency headwinds during the course of 2026. But now as usual, let's take a closer look across the 4 different regions. In North America, we recorded a top line growth up 23.8% at constant currency. This result doubled the speed of growth that we had in North America during the course of the third quarter, where our revenue grew 12%.

But what I think is probably even more evident is the different speed between the first half in North America, there was a 5% growth at constant currency and the second half, where we recorded an 18% growth at constant currency. In our Professional Solutions, our B2B business, our independent channels, our key accounts, our department stores were all positive. While when we look at our sales on our e-commerce partners, over there, we have a negative territory for the revenue in Q4. When we look at our product category, frames were up triple digit, thanks to an outstanding performance of our AI glasses category, but also optical frame delivered solid growth in the quarter, while our lens business in Q4 was flattish.

When we look at our frame brands, Ray-Ban and Oakley were up triple digit. On the lens side of our business, we start seeing some good traction of Stellest, the first and only lens myopia solution FDA approval that is now available in the United States that is now getting orders in excess of 4,000 doors in North America. Last comment on price/mix, which I would say was strong in both lenses and frames. But now let's move to the direct-to-consumer. On the direct-to-consumer side in North America, our e-commerce business was just attached below double digit in the quarter, and our retail business delivered high single-digit comp sales for Q4. Sunglass Hut was up 9% and LensCrafters was up 7% in Q4. So I would say a very compelling story proposition for a direct-to-consumer business.

A quick highlight on LensCrafters. We're reporting another great quarter. We posted in Q4 the 2 single days with the highest revenue in LensCrafters history, and that happened during the insurance days at the end of December. Our lens mix continues to improve during the quarter. We have a higher penetration of transition. We have a successful adaptive progressive lens powered by Shamir across the all different LensCrafters stores in North America. All the fundamental KPIs like price mix, eye examination, traffic and conversion that were all trending in the right direction. Moving to the Sun banner, Sunglass Hut now. Q4 was simply the best quarter in 2025 despite a tough comparison base as last year, Q4 comp sales were actually the best in 2024. So best result on top of best result last year.

Our international and co- location performed, I would say, at a fairly even pace. AI glasses continue to represent a key driver of our growth with both Ray-Ban Meta and Oakley Meta that deliver an outstanding results. But before moving to EMEA, let me say that as we enter in 2026, our direct-to-consumer trend in North America is further accelerating. So we're just 1 month into the year, but obviously, we are up for a very promising start. Moving on to EMEA. EMEA delivered a 15.7% growth in Q4, the 19th consecutive quarter of growth in the EMEA region, the best quarter in 2025 for Professional Solutions, the best quarter in 2025 for direct-to-consumer with both segments that delivered a double-digit pace. In the region, Italy, Spain, U.K., Turkey, Eastern Europe and Middle East posted double-digit quarter at constant currency, while Scandinavia was up high single digit and France delivered a fourth quarter in a low single-digit territory.

When we look at our 2 distribution channels in Professional Solutions, our frame business delivered an outstanding quarter, thanks to the AI glasses and the optical business with a growth that was very much driven by volume and also price mix. We're happy with our luxury portfolio in the EMEA region. We had a mid-single-digit pace. I would put on the spotlight, CHANEL, Prada, MIU MIU. Now when we look at the lens side of the business, the other product category, we had a good performance of transition and Varilux and a double-digit growth on Stellest with a growth that was very much driven by volume on the lens side of the business. Now let's switch channel and let's look at our direct-to-consumer.

Comps were in the high single-digit territory for optical EMEA and double digit in the Sun part of our business in EMEA. Optical business, I would say that we are very much at the ending stage of the integration between the former GrandVision banners into the operating machine of EssilorLuxottica. And just to give you a flavor for that, approximately 85% penetration of the EssilorLuxottica product in our frame assortment and approximately 90% penetration of a lens assortment across the banners in the EMEA region. The subscription model is now available in about 19 countries and represents 22% of the optical revenue in the region, a couple of percentage points more than what we have in the fourth quarter of last year. Last but not least, there is another important asset, and that is represented by teleoptometry.

And just to give you an idea how important is this asset and how successful was this exit in 2025, let me share with you that we hit over 200,000 eye examinations performed through the teleoptometry in 2025. That number is up 40% versus 2024 eye examinations. Now if we move to Sun, fourth quarter was actually the best quarter for Sun in 2025, with U.K., Turkey, Italy all at double-digit pace. The top door in the EMEA region for Sun, you remember, those are the 50 largest ones that we have deliver a double-digit quarter. So whether you are in Dubai or you are in Paris, in Madrid rather than in Istanbul, Sunglass Hut more and more is the destination location for Sun in the EMEA region. And that clearly makes everyone in the Sun team in EssilorLuxottica extremely proud for that.

Now let's switch gears. Let's move to East in the Asia Pacific region. Top line up 11.6%. Another strong quarter in this region with India, Australia, Southeast Asia, all up on the double-digit pace. China and Japan were high single digit, while Korea delivered a mid-single-digit growth during the course of Q4. An important asset here is myopia. And the myopia category in China delivered another great quarter of double-digit growth with revenues that today in Greater China are about 27% of the total business. The demand continues to be strong. And I would say it's the demand that continues to be strong for all the different myopia solutions that range from Stellest up to the Kodak and Nikon that leverage the other technology, the DLT1.

When we look at our other category, frame business delivered a strong quarter, I would say, across pretty much all the regions with sales that were driven by volume, but also with price mix. Ray-Ban, Oakley, luxury portfolio, they were all up double digit during Q4. Now when we look at our direct-to-consumer channel, the other channel, I would say that we are very pleased with our key banners in Mainland China. Those banners delivered a double-digit growth pretty consistently throughout 2025 in every single quarter. The other leading optical banner in the region, OPSM, posted a low single-digit quarter in comp sales with the key metrics on premium lenses on transition, on myopia solution that were all improving versus the fourth quarter last year.

Now let's touch on the last region in the pipe, and that is obviously Latin America. In Latin America, we had a fourth quarter up 7.6%. That trend is an acceleration compared to the third quarter, where you remember, we delivered 5.2% top line growth. Both Professional Solutions and direct-to-consumer delivered high single-digit quarter. I would say we had pretty much a great quarter across the different country in the region. Brazil and Argentina were up double digit. Mexico, Colombia and the other Latin American country delivered a mid-single-digit quarter. In the Brazil, the largest country, we had a double-digit growth for our frame business and double digit in Oakley and in our luxury portfolio with price mix being very much the primary driver of our growth in the country.

When we look at our lens business in Brazil, we had a low single-digit quarter, but all the key assets, Transition, Varilux, Eisen, they all delivered positive growth in Q4. Last touch on Oticas Carol as usual. The 1,400 stores delivered a double-digit quarter. And I would say that in Oticas Carol, AI glasses are start becoming more and more important and very much instrumental to our growth and success story for those banners. Let's touch now to the direct-to-consumer region. In the direct-to-consumer region, the Sun banner was just a touch below double digit. Ray-Ban stores, Sunglass Hut stores and Oakley stores were very much the primary driver of our comp sales growth in Q4. While when we look at our optical side of the business, the largest GrandVision footprint, the one that we had in Mexico posted a high single-digit comp sales.

Now we are now concluding our journey across our 4 different regions. And now let's take a closer look to our profit and loss as usual. We will be looking at the full year profit and loss. And as usual, I will walk you through the key line items at constant currency, and I won't spend time on sales as we largely covered that before. So the first line item is the gross margin. Our gross margin is down 260 basis points in '25 versus 2024. And this is really the combination of 2 effects. On one side, you have the impact of tariffs. And here is the gap is largely in the second half versus the first half of the year as those tariffs impacted for 2 quarters in 2025, second half, while in the first half of the year, the impact was very much in the second quarter.

The second part, important part, is the percentage dilution coming from the AI glasses that in the second half of the year due to the higher contribution of AI glasses to our growth rate had a much stronger impact on our margin. I would say that on a full year basis, just to give you a broader picture, approximately 1/3 of the impact is due to -- on the gross margin is due to tariffs, while 2/3 of the impact is attributable to AI glasses. Now let's take a look a little bit of our OpEx. Our OpEx as a percentage of revenues are 170 basis points down versus 2024 levels. Here, you have on one side, the investment that we continue to do to support our new strategic initiatives. We talk about during the different regions, the performance on AI glasses.

Francesco and Paul explained our long-term strategy on med tech the development of the audiology business and those investments, the deployment of those initiatives across the different channels, across the different geography, clearly have an impact on our selling, marketing and also G&A. But at the same time, we are undertaking a deep exercise to relook at our organization, understand whether we have deployed all the people in the right spot, and we are working to realign our organization to our strategic priorities. So overall, you look at our operating profit as a percentage of revenue, that is down 70 basis points at constant FX and about 100 basis points at current exchange rate. Below the operating profit, our cost of debt as a result of a higher interest rate environment, it's higher versus last year.

Clearly, that is the primary driver for that. While on the tax rate, we have a slightly more favorable pretty much as a result of a different country mix. That leads to a total net profit for EssilorLuxottica full year '25, down 50 basis points at constant FX and 70 basis points at current exchange rate. Now the last chapter of this journey before the Q&A session is clearly an important one, and that is represented by our cash flow. I will start saying one number that I believe tells you all, EUR 2.796 billion of free cash flow generation during the course of 2025. This represents a record high free cash flow generation. Those figures were achieved despite the material headwinds from tariffs and the material headwind from currencies.

A last comment on our net debt-to-EBITDA ratio that is now at 1.7 at the end of 2025, clearly confirming our ability on one side to maintain a strong balance sheet and at the same time, to invest in all the strategic priorities for the group. But now as usual, let's leave the floor to the operator for the usual Q&A session.

[Operator Instructions] Our first question comes from Oriana Cardani, Intesa Sanpaolo.

The first one is on the evolution of wearables sales by channel. Considering the full year results, can you provide us with the channel mix for wearable net revenues and tell us if you expect different future trends between the 2 channels? And my second question is on the margin outlook for wearables. How do you expect operating -- OpEx, operating cost to evolve in this year, next year for the wearables? And at what level of production volume do you expect economies of scale to help improve margins?

I take the first question is channel. Is professional solution wholesale, it will be the one that really will give us the best chance to grow everywhere. Also, if we believe that the direct-to-consumer, special the physical network that we have, the 18,000 stores that we directly manage it will be really the crucial factor that it can really activate in the wholesale, the growth of our sales of the AI glasses. AI glasses now is something more common. It is still something different from the normal glasses. So has to be tested, tried, explained sometimes. So it's a outdated fact that we have this very high professional network has helped a lot in the speed of really how we enter in the market. And then the Professional Solution follow also imitating the strategy that we have in our retail stores.

So I believe that the mix will be much bigger on the wholesale because wholesale the number of doors are much bigger than our retail. But the sales -- the number of units for single door, it will be -- it will remain in the future, in the near future higher in our own retail where we can take care and we can better define the communication strategy that will help also the independent optician and also the consumer electronic to better understand how to sell eye glasses and wearable.

I'll take the second question you have for tonight. So margin outlook for the AI glasses. I think there's a couple of things that you need to take into consideration. On one side, we do expect consistently with what we have seen in the last couple of years, a price/mix going up as a result of product innovation. If you think about it, where we priced the original Ray-Ban stories at $2.99 and the evolution of pricing for Ray-Ban Metal now, it's obviously going exactly in that direction. And we believe that, that will happen again, driven by innovation as much as we have done with other parts of the business. Then there is a second part of the equation that is a cost. And I believe that the scale will have to get cost progressively lower throughout the time.

Our next question comes from Chiara Battistini, JPMorgan.

The first question is on the wearables and the rollout of further capacity and production. So I was wondering and also, we've seen some comments from Meta in the last few weeks, if you could give us an update on how to think about the expansion of capacity and also CapEx for 2026 on the back of potentially expanding capacity? And the second question, you've mentioned myopia management up 22%. I was wondering if you could give us an update on the size of myopia management in 2025? And how to think about the priorities for myopia management in 2026, especially given the new push in the U.S.

Chiara, I'll take the answer to the first question with respect to capacity evolution. Let me put it in a broader perspective here. I think we will have the capacity that is needed internally or externally to manage the demand that we will face in the coming years. And I think we are planning according to that in close partnership with Meta. Then the second question is on myopia, Paul.

Yes, I will take the second one. Thank you, Chiara. To give you a little bit of a reference, so the global myopia activity for the group, as it was said, has grown 22% globally. As you know, mainly today, this activity is in China and Europe. For China, just to have in mind, I think Stefano gave a data point, we have close to 30% of the full China activity that is myopia management based. So it's quite significant. The priority for '26 is quite simple, and I did refer to it in my little talking point. First is to continue to deploy the full solution that we have at work with hospitals and the government in China, namely Stellest, Stellest 1, Stellest 2 and the DOT technology, which gives us a full platform to address the different price points and needs. Second is to continue to roll out in Europe and introduce Stellest 2.0, which is the latest technology platform in Europe.

And of course, a huge focus of our American colleagues is following the FDA approval back in September that we obtained, we are now really in the full launching process of Stellest 1.0, the first platform as we prepare to file with FDA the Stellest 2.0 also. But right now, the focus is to establish with the doctors, with the optometrists, with the parents, this totally new solution in U.S., which is first ever available for the children. And we have already close to 4,000 doors that have been trained and equipped. And we, of course, are expanding the distribution to many more doors as we talk. So this is really the plan for us this year. It's a big priority for the teams. And it's a fantastic where also to connect to the med-tech strategy that was explained because this is taking us in the doctor and in the clinic in the high hospital space.

Our next question comes from Anne-Laure Bismuth, HSBC.

Congratulations on the very strong top line earnings. Just 2 questions. So first of all, I would like to come back on the production capacity because there were some headlines mentioning that you can -- there were some discussion to double the production capacity, so let's say, to reach EUR 20 million to EUR 30 million of production capacity in wearables this year. Is this -- is this assumption a number that we should take in consideration? Can you give us a bit more color on that? And the second question is still on the wearables. So the Meta Ray-Ban display. So the display is a big...

Okay. So I will -- I think we don't hear Anne, anymore. So I will take the first question on the capacity. I think you have to look at this question in a different angle. The company is well equipped with building and plans to follow the needs ramp-up as it comes. And you have to have in mind that we have a very modern plant in China, where we have actually a full new building that was realized in the last 18 months. We have also a very large campus. As you all know, we built in Thailand, where we have there, what I call advanced surface ready to be equipped. And as we need to follow the demand, we add production line, which we now have standardized. We know very well how to equip them. And also, we are connected when we need with a Vietnamese partner company to support. So we have an in-place capacity setup that can follow the demand. And I think this is the way to look at it more than anything.

The next question comes from Hassan Al-Wakeel, Barclays.

I have a couple, please. Firstly, if I can follow up on wearables. Your P&L and business is changing in a meaningful way as wearables become a larger share of your top line. Can you talk about the longer-term benefits from scale and better unit economics on the EBIT margin, but also gross margin from product bundling. Do you see a wearables margin over the medium term in line with the group? I ask given your long-term targets broadly imply flat margins? And then secondly, can you please quantify the tariff and meta dilution headwind in the second half as you helpfully provided in H1 and the work that you've been doing to offset tariff, how do you see this in 2026? And what was the FX impact at the margin last year?

I'll take on your question. So beginning with the AI glasses. So the longer-term benefit in operating leverage and I would say, price/mix improvement is fully reflected in our long-term guidance, the new one that we just shared. Clearly, in that guidance, you have -- we are anchoring revenue growth with operating profit. And that's obviously creating that pace of earnings throughout the time. I would say that, again, when you look at the price mix, it's evident. You look at the collections that we have displayed today between Ray-Ban Meta, between Vanguard, Meta Ray-Ban Display, they all have price points that are higher -- significantly higher than the original product that we marketed a few years back because there is a higher technological content and because all those features, which, by the way, have been extremely appreciated by consumer are clearly creating a positive effect on our products.

So remember, when you look at the ecosystem of our wearable AI glasses, you have to bear in mind there's always a couple of other add-ons, which obviously help top line, but also profitability. The first important part is the lenses. 20% of the AI glasses that we sell are equipped with prescription lenses. And that's obviously a margin lift that is quite material. The other important thing is represented by coatings with transition that typically 40% to 50% penetration in our AI glasses. So that's obviously something that helps. And that's pretty much the story for AI glasses. Again, you will see price/mix going up. You will have on a cost side scale that will help also on a cost management. And all of that is pretty much baked into our long-term guidance.

Our next question comes from Hugo Solvet, BNP Paribas.

Congratulations on the print. I'd like to give you a break on smart glasses and focus on the base business. Could you maybe discuss the performance of the non-smart glasses portfolio and whether you continue to see that halo effect that you highlighted in Q3? And would you expect that to continue? And going back to smart glasses, but keen to get your thoughts on how do you see competition unfolding given the recent nervousness in anticipation of upcoming competitive launches?

Hugo, no eyeglasses sun halo effect. I believe that we have to start really thinking to glasses, sunglasses or eyeglasses, not as a really different category. It's really an expansion of category for different functionality. So we now start to consider AI glasses or wearable really part of our normal portfolio. Then, of course, the -- as any big innovation, especially the Ray-Ban display, they will drive traffic into the store. And honestly, the conversion is very high when the product is available and when it's not available is really we convert in a different kind of sunglasses of eyeglasses. So of course, the halo effect is quite important. But I believe that is really a part of the game. We don't consider something special. It's something that will continue in the future.

This is the strategy of how we manage our portfolio. The same for competition, welcome competition on this new category because we are 2 years ahead of all others. We have the unique distribution platform, really almost impossible to be replicated in the short term, maybe also in the long term is not easy. And competition means more investment in the category. And since we lead the category, that means that for us is we expect an increasing share of the market. So both are good things, halo effect and competition are really welcome in our future. Thank you.

The next question comes from Veronika Dubajova, Citi.

Congratulations on a very impressive finish to the year and frankly, on a very impressive 2025. I will keep it to 2. I'm actually going to change it up a little bit and ask about Stellest and your ambitions in the U.S., Paul, I think based on the disclosure that you've given us, China is about a EUR 300 million or so revenue line for Stellest. How long do you think until we get to a similar number in the U.S.? And ultimately, how do you assess the potential in the U.S. market versus China? If you could talk about that, that would be super helpful. And then my second question is going back to wearables. And I was hoping maybe you can give us a little bit of a preview around what's in the pipeline for 2026. Obviously, I noted your comments around it sounds like Nuance Generation 2.0. But to the extent that you can maybe talk upon what what's planned on the sort of AI glasses front in terms of iterations in 2026, that would be helpful.

Yes. Thank you. So I will take your -- I'm sure I understand fully, and we also are trying to be reasonable in the ambition we can fix ourselves for the U.S. Let me give you just a few data points. In the U.S., you have 15 million children from the age of 5 to 17 that are corrected for their myopic vision. in China, this number, of course, is very much more than that. And in China, we have been able to see that myopia solution have been progressively deployed to 20% of those children that need -- that are corrected for myopia. So if you take that metric, which, of course, will take time, we have been in market really with those solutions for now 5, 6 years in China. But in the U.S., if you say that it could represent progressively 20% of the children that will embrace that technology, although Francesco will tell me every children have to be wearing Stellest.

And he's right because it's actually the duty to make it available to any children. But this is the kind of order of magnitude that we see in the U.S. And the most important, it's that it's our duty and the duty of the parents of the -- all the stakeholders to make it available to equip the children in the U.S. with this solution because it's a good solution. It's super efficient. But that is what we are talking about. And be sure that there is a huge focus on that to reach millions of children with this solution in the U.S.

About the wearable pipeline once -- and just one thing on Stellest U.S. ambition. We start to understand that longevity is start when you are young. So that is why we are pushing so hard on Stellest. Stellest can change the progression of your myopia that it will prevent early stage of many others ocular pathology. So we believe that there is also a netic approach that we have -- we need to have because a kid with Stellest really have a chance to have a better life in the future. And this is the first time that is that problem we have to deal with. It's like in the pharma industry, when you need to make available some drugs to everybody because this will affect the future of your life, not just correct something, is slow down the pathology.

That is really something that we are looking at, and we are reflecting how to really very well penetrated the market to give the information to doctors and to parents. For wearable pipeline and ones, of course, we believe that the portfolio has to grow very, very fast, as to touch different segments of our customers from luxury to more affordable eyeglasses and as to really have cover in a much better segmentation approach of female, male, kids, everyone that is -- can have interest in this new category. So it's not so easy like in analogic glasses to have a new product, but now the platform is very solid. We have more than one platform with different capability and features. And we are really focused on expanding our portfolio. The same for Nuance. We had a wonderful return on the first launch of Nuance.

People have to really understand that is totally different approach, having Nuance towards in canal traditional hearing aids. At the first try, you don't see immediately the big benefit that amplification in canal gave to the patient. But in the long term, really, we had a strong return. People is telling us that their life change, the capability to have a clear understanding and conversation in-house with the TV or outside in the noisy place improve a lot. So the new launch that we expected for the second part of the year, it will really expand the portfolio with something that we will see big improvement in amplification and in the power supply, the battery and many other features, including the capability to take phone call from our hearing aids out of Canal.

The next question comes from Thierry Cota, Bank of America.

First, on the guidance, so you get for an aligned growth of sales and EBIT over the coming 5 years. I was wondering whether you think this is going to be aligned more or less every year or whether we should still have a margin drop at EBIT level in 2026. And secondly, in Q3 or on Q3, you gave the contribution of AI glasses to the growth of the quarter on an organic basis. Could you give us the same amount, the same number for Q4, please?

Thierry, let me answer your 2 questions here. First question on the guidance. I mean, we gave and shared a long-term guidance. And when we do that, we clearly don't guide on a single year. Clearly, there are certain things that are evident in 2026 as far as we see today. We have the annualization of tariffs. As you know, in 2025, we had from the second quarter until the end of '25, the impact of tariffs. We will annualize that effect in 2026. FX, apparently, it doesn't look like it's going to be our friend for 2026 with the U.S. dollar-euro exchange rate at this level. And obviously, the other thing that we know is that AI glasses will represent an important constituents of our growth profile this year.

And we also know that the new initiative, the new assets that we recently deployed, Paul talked about the Stellest launch and deployment in the United States as the one and only solution to manage myopia as a lens. We know that the hearing aid will evolve throughout 2026. We know that the AR glasses family will expand in 2026. So all of those are constituents of this year. We have a checkpoint in the middle of the year where we'll see where we are in terms of trajectory. What I can tell you tonight is that already January started well. We are delivering a double-digit month in January. Clearly, is the lowest month in terms of contribution to the overall revenue. We have 11 months more to go, but it's a promising start for 2026.

The second question you had, Thierry, was around the contribution of AR glasses. I can tell you, I mean, I think it's pretty evident that the contribution of AR glasses to our revenue profile, it was bigger during the second half of the year, particularly in the fourth quarter, even more than in the third quarter. I -- again, I think it's a natural evolution of our expansion of distribution network, as mentioned before. There's also probably a little bit of a seasonality linked to the holiday season. But again, it's nothing that shouldn't surprise as we keep rolling out a product that is highly desirable in the market and is very successful on both direct-to-consumer as well as Professional solution.

The next question comes from Richard Felton, Goldman Sachs.

My first one is a follow-up on Veronika's question on Stellest in the U.S. I appreciate the comparison with China, but my understanding is that reimbursement is a little bit better in the U.S. So could you comment on current reimbursement coverage for Stellest and your expectations during 2026? And if that is reasonable to potentially drive higher penetration rates than you commented on in China? And my second question is on AI glasses. Are you able to provide any color on the acceleration in AI glasses in Q4 by product? So which products within the AI glasses portfolio were driving that acceleration in growth?

Reimbursement. So clearly, you're right, in the U.S., you have managed vision care programs and a very important, very positive news is that Stellest has already been put in the so-called formulary of VSP, which means that it is already very visible by all the eye care provider, the eye care professional as being a reimbursed product solution. So it's part of the installing this category, this product, this solution in the U.S. You are right, we are looking at every aspect that is going to make this, as Francesco and I said, a standard solution for children, for myopic children.

And I'll take the second question, Richard, with respect to eyeglasses. I have a hard time to honestly put on the spotlight a specific model for the fourth quarter because I think we had a successful rollout of the second generation of Ray-Ban Meta. We had an incredible, incredible curiosity and excitement around the launch of Vanguard and also the other product that we are selling during the end of the third quarter that is Houston. So -- and Meta Ray-Ban display, it's another product that attracted a lot of curiosity, a lot of interest. We have pretty much all the appointments booked in our stores to try on Meta Ray-Ban display booked throughout the end of the year. So all of them have been contributing to our successful story in the fourth quarter.

So thanks for following us also today. Really appreciate the patience that you show to our company and has been a really interesting question. I hope that next time, we will talk a little bit more about health care, predictive medicine and our investment in eye clinic and clinical study that is a part that will be really relevant for our future as eyeglasses are now. Thank you, and see you soon.

Good morning, and good afternoon, everybody. This is Giorgio Iannella from the IR team. Thank you for joining EssilorLuxottica Third Quarter Revenue Management Call. The Group CFO, Stefano Grassi, will walk you through the revenue performance of the last quarter. After his presentation, there will be a 30-minute Q&A session. [Operator Instructions]

With that, I hand it over to Stefano.

Good morning, and welcome to our third quarter revenue results. We couldn't imagine today a better start of the second half of this year for EssilorLuxottica, where our revenue posted a record high growth of 11.7% at constant currency, the best result ever for EssilorLuxottica. The 3 largest geographies delivered all double-digit growth with North America up 12.1%, with EMEA up 12.7%, with Asia Pacific up 10.5%. Latin America delivered mid-single-digit quarter with a top line up 5.2%.

Both our segment Professional Solution and Direct-to-Consumer deliver a double-digit quarter. As an additional info for today's call, the 2 acquisitions, Heidelberg and Supreme, accounts for about 2 percentage points in our sales growth.

The wearables products play a major role in our third quarter growth profile. We really now are building a brand-new category with unprecedented opportunities to develop products and services that are associated with our glasses that now, I would say, more than ever, should be imagined as a platform device. Just to give you an idea, our wearable category accounts for more than 4 percentage points in our growth profile at constant currency. And the exciting product pipeline that have been recently presented at the MetaConnect and that are about to hit the market, like the Oakley Vanguard, the Ray-Ban Meta second generation, the Meta Ray-Ban with an integrated display, I'm sure they will all further strengthen our leadership position in this key product category.

But now let me switch gear and talk about e-commerce. Our e-commerce business posted an outstanding quarter at a double-digit pace with all the main platform like Ray-Ban.com, Oakley.com, SunglassHut.com. they all deliver a double-digit sales growth. Our revenue growth profile, our current FX is affected by the devaluation of few currencies like the U.S. dollar, the Chinese renminbi, the Turkish lira and the Brazilian reais, which diluted our constant currency growth by about 5 percentage points, leading to a total growth at current change at 6.7% for Q3.

But now, as usual, let's begin our journey across the 4 different regions. And as per our tradition, let's begin with the largest one, North America. In North America, we had the third quarter at double-digit pace, 12.1%. We more than doubled the pace of growth that we deliver compared to what we had in the second quarter, where I remind you, we posted a top line up 5.5% at constant currency.

In the Professional Solution, our B2B division, our top line was up double digit. And Ray-Ban Meta clearly played a major growth driver in the B2B segment. Both our independents and key account posted a solid growth. And in those 2 distribution channel in North America, we were overall positive in Lenses and positive in frame. So I would say, a great momentum for our 2 optical channels in North America.

Now if we look at our 2 product categories, lenses and frames, on the lens side, our revenue were up low single digit, and the volume was really the main driver. I would say we were positive in a single vision business. We were positive on the progressive business. But now more than the performance on the lens, we are all very excited to really be the pioneers in myopia management in the United States. With our revolutionary lens Stellest that will be finally sold in the U.S. after we got the FDA approval. And EssilorLuxottica will be the first to offer this lens that will materially help kids to slow down myopia progression.

Let's touch on our frame business. Frame business was up on a double-digit pace with volume and price mix, both positive with Ray-Ban, that was double digit. And even when you exclude the impact of wearables, you would be looking at Ray-Ban that was up high single digits on Sun and was double digit up on the prescription business. So I would say that probably in Ray-Ban, we do have a sort of a halo effect coming from the excitement around the wearable products, that is also creating some benefits on the other part of the Ray-Ban business.

If we now move to the direct-to-consumer, I would say that we are extremely pleased with the third quarter outcome. As our comp sales were up 7% at -- on a comp basis, with LensCrafter that had the best quarter of the year with the comp sales in excess of 8%, and Sunglass Hut, the likewise posted the best quarter of 2025 with comp sales up around 8.5%.

I would say that for both of them, we had a strong fundamentals in terms of traffic, conversion, volume and price mix. And just to add a further perspective to this performance, I can say that the first few weeks of October show a further acceleration trend in both LensCrafter and Sunglass Hut. So very excited about the third quarter result, even more excited by the trajectory as we enter in the fourth quarter.

And now let's move to Europe. Europe was up 12.7%, material acceleration compared to the second quarter delivery of 9.1%. This represents the 18th consecutive quarter of revenue growth in the EMEA region and the best results since the first quarter of 2022.

Let me share with you a few highlights here. From a country standpoint, Italy, Germany, U.K., Turkey, Eastern Europe and Middle East, they all posted double-digit growth. When we look at our 2 distribution channels, both Professional Solutions B2B, direct-to-consumer, they were all up double digit. Our professional solution, key channels the independents, the large key accounts, our e-commerce partners were all positive. And when we look at our 2 product category, lenses and frames both positive.

On the lens side, I would say the price mix was the main driver. While when we look at our frame business, both volume and price/mix they were strong. When we look at our branded lens portfolio on the B2B side, we are very happy with the key brands, Varilux, Eyezen and Transition, they all deliver high single-digit growth and our myopia management lens, Stellest delivered a double-digit quarter.

Now let's move to the other distribution channel, the direct-to-consumer one for a minute, and let's talk about our 6,000 EMEA stores that in the third quarter, delivered the best quarter for 2025 with comp sales up 9.4% and both optical and sun banners delivered an even pace of growth during Q3. In Optical EMEA, we had double-digit comps in Italy, double-digit comps in Germany, in U.K., in Portugal, in Turkey, in Ukraine and a high single-digit comp sales in the Nordics. The subscription model, it's continuing to deliver outstanding growth is now representing 22% of our revenue in the optical business for EMEA, and it's about 3 percentage points higher than what it was in the third quarter of last year.

Let's now shift to Sun. We had a very tough comparison base on the Sun business in EMEA but we are pleased with a strong delivery in the third quarter. We had a strong demand for Sunglasses during the summer season with 2 out of the 3 months of Q3 deliver a double-digit pace. And so far, the fourth quarter is a double-digit quarter. So can't really wish anything better for our Sun business in the EMEA region.

Now let's move east, and let's touch Asia Pacific. A double-digit quarter, material acceleration compared to the 7.8% that we had in the second quarter for the Asia Pacific region. It's the best quarter so far in Asia Pacific. We had, from a country standpoint, China up on the high single digit. Southeast Asia, that was double digit. Korea that was double digit and Japan to deliver a double-digit quarter.

Just to share with you a bit of a highlight of what happened in the Asia Pacific region. In China, Stellest 2.0, the new generation of our myopia lens, progressively rolled out during the course of the third quarter. You remember, we launched at the beginning of July, and we're now prioritizing clinics, hospital and selected key accounts. And so far, I must say that the early readings are very reassuring because we are gaining a clear indication of strong productivity in the doors where Stellest 2.0 is actually sold.

The overall myopia solution category continues to gain traction in China and now represents 1/3 of our revenue in the country with the overall portfolio that is growing approximately 20% at constant currency during the course of the third quarter. The frame business, the frame product category were actually strong in the quarter for China. We delivered double-digit quarter, I would say the main driver for that was the luxury portfolio and the Oakley brand.

And now let me just give you a quick touch on the direct-to-consumer side. The optical stores in the region deliver a low single-digit comp sales. And I would say we had a soft Hong Kong business, while on the other side, Mainland China was up double digit and OPSM delivered a low single-digit quarter.

But now let me move to the last region in our journey, and that is Latin America. Latin America, as I mentioned at the beginning, was a mid-single-digit quarter with both channels deliver a mid-single-digit growth.

In Brazil, we had low single-digit Q3. Óticas Carol was a bit soft in Q3, I would say, primarily due to a timing difference that we have between last year and this year. In the presentation of the frame collection. I believe we should get most of it back in the fourth quarter. But outside Óticas Carol, the frame and the lens business were solid positive. The EssilorLuxottica days that were held in Brazil at the beginning of Q3. So a large engagement, I would say, probably an unprecedented engagement of our key clients and independents. And the payback was very evident in my view, when we look at our order intake on the key accounts.

If we look at now our other 2 countries, Argentina was up double digit. Volume was the main driver on the frame business and price/mix was really the main driver on the lens part of the business. Mexico, another key country in the region, delivered a mid-single-digit growth and kudos here to our direct-to-consumer part and in particular, to Sunglass Hut and GrandVision Mexico that were very much instrumental to our growth in Mexico.

But now let me hand it over to the operator for the Q&A session.

Our first question comes from Oriana Cardani, Intesa Sanpaolo.

The first one is on the significant acceleration seen in North America in Q3 compared to Q2. What greater contribution from the price/mix effect in Q3 compared to Q2, considering the repricing implemented in response to tariffs? And can you give us an idea of how much of the growth seen in North America is due to the growth of Meta glasses?

And my second question is on M&A policy. Is it possible to quantify the contribution to revenue growth expected for next year resulting from the consolidation of the acquisition already announced?

Let me answer your 2 questions here. North America, the impact of the price increase is not the primary driver of the overall growth in North America. Clearly, we do have a lift coming from that. But I think it's really a combination of different factors coming to play altogether. Clearly, there is a lift coming from Ray-Ban Meta wearables as a product category, I would say. There is an improvement on some fundamentals on the optical channels, meaning key accounts and independents. And that improvement is not only price, it's mix and it's also volume. That, I think, is important to be said, especially on the lens part of the business, especially on the key accounts.

So it is really a combination of different things. The contribution for -- from Ray-Ban Meta and wearable, as I mentioned before, is in excess of the 4 percentage point overall for the group. But again, the pleasing thing is that when we look at the underlying part of our business, even our core business show material improvement on the B2B and show a material improvement also on the direct-to-consumer side. I think you heard me saying before that both Sunglass Hut and LensCrafters, the 2 leading banners in North America delivered the best quarter of the year during the course of the third quarter.

And obviously, it's not part of your question, but I want to reemphasize that. We are entering into the fourth quarter with a further acceleration trajectory on our direct-to-consumer banner, which is obviously very encouraging.

The other question you had, Oriana, is regarding the acquisition of RetinAI. It's a bolt-on acquisition. So in that respect, you should see that acquisition that's been announced just yesterday.

The next question comes from Chiara Battistini, JPMorgan.

The first question I have is on wholesale and a very strong acceleration that was in Q3. I was wondering to what extent there is any timing of shipment sell-in that is impacting that acceleration? And to what extent is actually just a step-up in the growth profile as all of the innovation starts gaining weight also within that channel.

And the second question I have is on Stellest, in the U.S. after your approval, and you mentioned that you're going to be making it available in Q4, I was wondering if you can share some more color on how we should be thinking about the rollout and the ramp-up and maybe the opportunity in the U.S. as well, please.

So first question regarding Professional Solutions acceleration. I don't think there is any particular sell-in push here. It's a natural performance that we've seen, I would say, pretty consistently throughout the third quarter on the B2B side. And what I'd like to see is, obviously, that performance, especially in key accounts, on the large accounts that we have in North America being quite strong and being quite strong on frames, being quite strong on lenses. I also seen and observed a sequential improvement on our independents, our ECP. So that's obviously, I would say, extremely encouraging.

Meta, the innovation, Ray-Ban Meta play obviously an important role during the course of the third quarter. And you know that when we look at wearables, we should also think about the add-on that we have from a lens perspective. Just to give you an idea, when we sell Ray-Ban Meta in the direct-to-consumer channel, typically, we have a pretty high attachment rate of prescription. So prescription glasses are obviously a big percentage, 20% in penetration of our Ray-Ban Meta. When we sell wearables, we have typically 1/3 of anti-reflective lenses that are associated with that. So all of this help our trajectory in top line, help our mix, our price/mix overall.

The question on Stellest, we are clearly very happy -- [Technical Difficulty] appreciate we received just a matter a few days ago, the clearance from the FDA to commercialize Stellest in the United States. We are ready for that. So it's going to be really a matter of days as you're going to see, and we are ready for that on the B2B side. We are ready for that also in our stores where you will see visibility, where you will see people trained, where you will see very much an enthusiast because it's been a long journey for us, and we're now all very excited to properly roll out these lenses. And again, I want to reemphasize the fact that we are the first and so far the only one that can commercialize in the United States, a myopia management solution like Stellest.

The next question comes from Grace Smalley, Morgan Stanley.

My first question would just be on wearables. Given the very strong growth you are seeing in that category. Could you just give us an update on the scaling of your production capacity? And how you're thinking about wearable units evolving as we move into 2026?

And then just to come back on some of your comments there, given the very strong performance in Q3 and clearly, the positive comments on the exit rate and the current trading and given wearables typically lend themselves very strongly to gifting in Q4. But I guess, at the same time, you're also starting to annualize some of the contribution from Supreme and face a tougher underlying comparison base in Q4. So putting the pieces together, how are you thinking about the level of growth we should expect going forward relative to kind of the very strong double-digit growth you've just achieved in Q3?

Thank you, Grace. Let me answer both of your questions here. First one is capacity. I mean it's a question that in a way I was expecting, right, considering the performance that we've seen. We are ready for that. I think we have, in a way, the flexibility from 2 different angles, the geographical flexibility to fulfill the demand that is going to come in the coming months. And we also have the capability to do it in-house or outsource. And obviously, that is very important because we want to keep and retain that flexibility as we see this curve that will progressively ramp up. When we look at the exit from the third quarter, enter into the fourth quarter, I mentioned before.

You've seen that in many different parts of the organization, in many different business units, we do experience an acceleration in our trend. So obviously, the first month actually is not even finished the first month. We're actually a couple of weeks into the first month of the quarter. But obviously, if I have to judge, but what I see so far, I would say we look at this fourth quarter with a good degree of optimism, confident with the assets that we have in our pocket, confident with the fact that innovation will also play a major role into our fourth quarter trajectory.

And what I mean by that, it's obviously the progressive rollout of Stellest 2.0 in the fourth quarter in China. In 2026 in other countries. What I mean by that is the rollout of all the new products that have been recently presented at the MetaConnect: Vanguard, Meta, Ray-Ban Meta 2.0 and Meta Ray-Ban that I believe will play a role also in our fourth quarter profile. I also mean the impact and the contribution that we have as October 1 of Optegra. So we are adding a set of new clinics, 70 clinics across Europe that obviously represent a major important strategic pillar for our revenue growth profile and are developing in the med-tech space.

Our next question comes from Hassan Al-Wakeel, Barclays.

Firstly, maybe a follow-up on capacity. Are you able to talk roughly where you are in terms of volumes versus the 10 million? And how you're thinking about the need to ramp beyond the 10 million given some of the recent launches? And how should we think about the cadence of some of your future launches?

And then secondly, if I can ask on margins and how you view current consensus for the second half given, a, the stronger growth that is coming through, but also the mix of this growth and dilution for Meta as well as tariffs. Do you think that you could plausibly increase margins in 2026 if Meta grows in line with your expectations?

So let me answer both of your questions. The first one is the capacity on wearables. You rightly pointed out the 10 million capacity that we originally were planning to build by the end of 2026, seeing this further acceleration and with the flexibility that I described you before, we are in a position to anticipate that build up capacity before what we shared at the beginning. So it will come earlier at the end of 2026.

And again, we will couple that additional capacity also with our ability to deliver product innovation, not just at the end of this year but also in the following years. So you can further expect newness associated with our products in terms of wearable. And as you might heard and read on the news, obviously, there are speculation that other brands might come into the pipeline of wearables for EssilorLuxottica.

Your second question is regarding margins as much as you might appreciate that this is not a margin call, but it's a revenue call. But we shared, right, the fact that the wearable division, in absolute terms, it is a profitable business. And clearly, we benefited on that. It is a business where we do have, as I mentioned before, lenses, prescription lenses on 20% penetration, which I believe it's a very strong penetration in our own retail network, considering the certain part of our network only sales on glasses like Sunglass Hut. It's a business where we do have a high penetration of transition, where we do have a high penetration of polarized lenses.

So the overall ecosystem, overall ecosystem of wearable it's going to progressively bring not only revenue associated with the hardware, but also the revenue associated with lenses. And I believe over the longer run, the services, the most obvious and evident one, it's the premium AI will help to contribute and lift the margin furthermore for this product category.

The next question comes from Veronika Dubajova, Citi.

Congratulations on a really impressive quarter. Two questions for me, please. One, I appreciate you want to steer away from commenting on the size of the Smart Glass revenues. But if I just do some quick back of the envelope math, I guess, we're looking at sort of a third quarter revenue number that on my math would be north of EUR 300 million. Just curious if you can confirm whether I'm at least in the right ballpark? And whether there is any sort of stocking in this number given the high number of launches in the quarter? Or you think this is a good run rate as baseline, obviously, before we get to some of the more exciting contributions into the fourth quarter and into next year. So that's my first question, please.

And then the second question, just on the improved momentum in North America B2B business. Stefano, obviously, I know you've taken a number of actions there to improve your competitiveness, to improve the service. It's really good to start seeing those coming through. Do you think there is scope for that B2B business to accelerate also in the fourth quarter? Or is that acceleration you're seeing in Q4 really just a function or just present in the retail business?

Veronika, so first question on the Meta. I think I mentioned at the beginning that the contribution to our revenue growth profile is in excess of 4 percentage points. So the math over there, it's pretty easy. I mean, whether it is or it's not a good run rate for the fourth quarter, we'll see it. But clearly, we are seeing a quite material step change in our growth trajectory. And entering to the fourth quarter with the confidence that I described you before should give you a good idea where we're heading to.

Professional Solutions North America I think we -- again, we've seen some good indications in Professional Solutions in North America. And the positive thing is that it's coming across channels, 2 critical ones, in particular, the key accounts and independents. It's coming across lenses and frames. It's coming because we are also seeing a good traction on volume, in particular, on lenses. And we see a good balance between volume and price/mix. So all those things are still there from what we can observe in the first few weeks of the month of October. So again, you probably don't see us here, but you look at smiling phase around the table here, which, again, it gives you a good pulse, a good sense on how we are entering in the last quarter of this year.

The next question comes from Hugo Solvet, BNP Paribas Exane.

Congratulations on the print. I have 2. First on Smart Glasses. I understand the 20% share of prescription, 30% of transition. But overall, the penetration of proprietary lenses, if you could give us a number and how it has evolved since you first launched the Ray-Ban Meta that would be super helpful.

And second, could you give us a sense whether you've believe that a meaningful step-up in marketing investment will be required to fill further the growth of the Smart Glasses business?

So I want to make sure that I understand your questions. When we sell Meta, Ray-Ban Meta or Oakley Meta products, the lens is obviously our manufacturer for sunglasses within EssilorLuxottica when we produce our lenses are part of our manufacturing capacity on Rx. So that's part of our business, pretty much like any other pair of frames where we associate our lenses into that.

So -- and just to expand a bit on the commentary that you made at the beginning, the 30%, 1/3 is polarized, actually, the penetration of transition it's about 50%, 40% to 50% depending on the quarter. So that's really to give you a ballpark idea. So 20% prescription penetration on our own retail network, 1/3 penetration of polarized and 40% to 50% penetration of transition. Those are the key data that I would probably stick in my mind with respect to the lens dynamic.

I think the marketing expenses. I think it's a continuous interaction between EssilorLuxottica and Meta to make sure that we get the best ROI. I think this year, if you just step back and look at the amount of work that has been done on the brand and on this product category, I think we should all feel very, very pleased, very proud for the work that has been done.

I can tell you that looking at the marketing communication plan for 2026 that we're definitely going to have a lot of excitement for next year with a lot of visibility on wearables. And again, we are in the process of crystallizing the plan for next year, but there are some quite interesting, I would say, news on our marketing testimonials and visibility that we're going to give for our wearable products. And obviously, this will not only be Ray-Ban, but will be also Oakley that it's just joined the family of wearable products that are offered to our consumer.

The next question comes from Adrien Duverger, Goldman Sachs.

Congratulations on a great set of results. I have 2 questions, please. The first one is, could you please comment on your expectations for the timing of the next generation in terms of launches? And could you also comment on the trends with regard to average selling prices?

And the second question would be on the consumer feedback from Nuance. And also I remember last quarter, you commented that they had over 80% penetration of prescription lenses. Could you please update us on that figure, as I suppose Nuance continue to be available across more doors?

The question on next generation of Meta, EssilorLuxottica Meta wearable products. I think you've seen already that from a pricing standpoint, some of our products have a higher pricing because they encompass different additional features that we didn't see before. You've seen it very clearly whether you're looking at second generation of Ray-Ban Meta, whether you're looking at Vanguard, the latest Oakley Meta, that has been launched or you look at Meta Ray-Ban, which is obviously a much higher price point with revolutionary features, which I believe you haven't seen before.

So pricing will be very much driven by innovation and features that will be added. And obviously, on top of the hardware, there would be the services component that will progressively be added to the hardware platform.

Nuance. Just to give you a couple of data points here. We have over 12,000 doors open and available for selling Nuance worldwide. It's doing well. We are pleased with the buildup work that the team is doing to create this new category in a way of hearing aids device that look and feel like a normal frame. We are very pleased by the fact that the prescription penetration is pretty high. We are already commercializing Nuance in 6 countries. And I believe between now and the end of this year, we're probably going to be opening up other 5 to 6 countries. And that's obviously very encouraging because we keep hearing and people asking when can I get it, when it's going to be available in my country.

So a few other countries will come on board in the near future. And there is another interesting thing. We -- in the country where we have this information available, we do see typically that between 1/3 to 2/3 of the Nuance customers are new customers to hearing aids. So our people that never worn hearing aids before. And that's obviously very encouraging because it means that we are expanding the scope of hearing aids and we are reaching our people that would normally wouldn't wear hearing aids device because probably of the stigma.

And with that, obviously, Nuance doesn't carry a stigma. It's a highly effective product. And it's obviously very encouraging to see that statistics in some of the country where we have this information. Clearly, Nuance, similar to the other wearables, the one that we developed in partnership with Meta will see a product evolution, which I believe will come in 2026.

The next question comes from Domenico Ghilotti. Equita.

Two questions. The first is a quick follow-up on the wearable. Just to have the contribution in the first half, so we can appreciate the ramp-up coming from wearables in the third quarter.

And second is on myopia management. So it's a more, let's say, broad indication, if you can share your view on when do you expect this category in the U.S. to be, let's say, the size of China or whatever you want, but in terms of potential contribution over the medium term.

So first question on Meta. The contribution on wearable still in the first half of the year. In the third quarter, that contribution is higher than what we had in the first half. So we've seen an acceleration in terms of Ray-Ban Meta contribution.

The second question is around myopia. I don't know -- I mean I'm not good in sizing market here, right? But what I can tell you is that we are the pioneers for this product category in the United States. So I think this is probably the most important thing. We are the only one that today in the most important optical market in the world, are commercializing myopia solution that help kids to materially slow down myopia progression. And that is something unique, something that no one else has it today in the market.

And you know our power fire in visibility, you know our capability to invest in the strategic initiatives that EssilorLuxottica believe are critical. And I think we've been very deliberate in the past to say that myopia, Stellest, in particular, in North America was one important strategic initiative. So I believe this could be quite big. And now we'll see, I mean, as the revenue will come through and we can see already contribution as we close 2025. But again, stay tuned and obviously, we'll give you more update as soon as we close the year.

The last question comes from Julien Dormois, Jefferies.

The first one is actually a follow-up and sorry for coming back again on AI glasses. But you kindly indicated that you generated 4 percentage point contribution in the third quarter, so that makes roughly EUR 250 million. So just wondering whether you could confirm that it would probably represent approximately 700,000 to 800,000 pairs? So just to give a sense of what the unit base that we're talking about for AI glasses?

And the second question relates to the opportunities on the services side of things, and you commented on that a few times already tonight. But just wondering what exactly the levers are behind those services. And what is the revenue split between you and Meta on services? I think you fully consolidate the hardware part of things. But on the services side, how are the things are going to work going forward? That would super helpful.

So let me answer the first question. So the contribution is in excess of 4 percentage points. The math is not directly the one I think you did because you need to take into account that there is a mix between the 2 different channels, B2B and direct-to-consumer. And therefore, the pricing is obviously different depending on whether you're selling a B2B or you're selling on the direct-to-consumer side.

The services that will be associated with the wearable platform, I think some of the most obvious ones are related to the leverage of AI. But again, you're looking at over the longer run. And I think our CEO and Chairman has been very explicit more than once in saying that glasses will become a platform that will enable different functionalities on a day-to-day basis, will enable not only the support of artificial intelligence, but also medical checks progressively.

So we are just, first few steps into a journey that can materialize in a quite fascinating way. And we believe that glasses will be the future. Glasses will materially replace most of the functionalities that today we have embedded into our phones. And I think the Meta Ray-Ban really represents a further proof of concept of what we are able to do when you couple 2 companies that have a high degree of expertise in their respective area. But again, that is just the first step.

But over the longer run, you should think about services. You should think about the hardware associated with the frame and you should think about the lenses because that's the other thing. And the pleasing thing to me is that even Meta Ray-Ban is a product that also encompass prescription. So it's a proof of concept that we can showcase information on the lens, it's a proof of concept that we can do that associating prescription to that. So a lot of exciting things coming all together in our platform device.

All right. This was the last question for tonight. Thank you very much for joining us today and look forward to connecting with you for the full year 2025 results. Thanks a lot.

Good morning, and good afternoon, everybody. This is Giorgio Iannella from the IR team. Thank you for joining EssilorLuxottica Interim Results Management Call. The Group Chairman and CEO, Francesco Milleri; the Deputy CEO, Paul du Saillant; and the CFO, Stefano Grassi, will walk you through the business and financial highlights of the first half of the year. After their presentations, there will be a 30-minute Q&A session. [Operator Instructions] With that, I hand over to Francesco.

Welcome, everyone. I'm pleased to reconnect with you to share our first half financial results and update you on our progress in MedTech and wearable. Let's begin with our long-term vision.

We believe the future of glasses goes far beyond vision correction. They will become innovative, powerful, AI-enabled platforms that support human performance and healthcare at various levels. Thanks to our unique scale, capability and global reach, we are in a position to lead this transformation. As a vertically integrated group, we are developing smart eyewear that combines vision care with digital functionalities. With access every year to over 0.5 billion customers, we have the ability to collect a huge amount of data.

We are positioned to further innovate in many fields, such as diagnostics, early disease detection and eye health, even identifying health risk, for example, in neurodegenerative and cardiovascular areas. Our ambition is to become the world's leading processor of healthcare metrics using a network of smart eyewear equipped with sensors and cameras to collect and analyze information.

This is the core of our MedTech strategy and the destination of our long-term journey. Now looking at our H1 performance, we are pleased with our revenue growth of 7.3% at constant currency, with solid momentum across both quarters. We maintain a stable adjusted operating margin year-over-year after our relevant investments in R&D, AI, health data collection and hearing aids that reflect our focus on the long-term innovation.

We have entered in the MedTech space by acquiring high-quality companies with proprietary technologies. This includes our recent acquisition of Optegra Eye Clinics, a strategic move that extends our reach across the full eyecare journey, with advanced diagnostics, therapies and surgery. Optegra brings strong medical expertise and contribute to expand our offering. Pilot tests in diagnostics and surgical treatment will soon begin also in our optical retail across the world.

Turning to smart glasses. We are excited to launch Oakley Meta, our first AI glasses under this iconic sports and lifestyle brand. The new collection is about to be launched. While the 50 years anniversary limited edition is already well received by the brand fans. This sets the start of Oakley journey in smart eyewear and there is more to come.

Ray-Ban Meta continued to perform exceptionally well, with sales growing more than 200% year-over-year. The rollout of the live AI, including new features like the real-time translation and the wider adoption of Transition and prescription lenses are all supporting the product growth.

In hearing aid glasses, Nuance Audio is rolling out successfully, now available in 10,000 doors across North America and Europe, including both optical and hearing care channel. It's receiving strong feedback for both its technology and features as well as high prescription lens adoption, now over 80%. Many exciting initiatives at work in EssilorLuxottica, a lot of opportunity ahead for our big start-up company.

Our ambition is to get the scale in terms of business diversification and worldwide reach to be the leading innovator in the healthcare category with smart glasses, medical devices, digital system, big data and AI vertical healthcare specialization. As a recognition of all that, I would like to highlight that EssilorLuxottica has been named by Time Magazine among the 100 most influential companies of 2025 in the category of innovators. It's good to see that our goals and journey fully reflect into our stakeholders' perception. With that, I hand over to Paul.

Thank you, Francesco. Hello, everyone. It is great as always, to be with you. You have just heard from Francesco about our latest breakthrough innovation that have hit the ground. Being able to constantly deliver such disruptive technology to the market requires, in my opinion, three key dimensions. A unique ability to imagine products that push the boundaries, a very solid core business to build new categories on and robust human and industrial capabilities and go to market to execute our ambitions.

Together with our leadership team, we are deeply focused on driving the high-paced execution of our strategy. To supporting this, we constantly adjust our organization, expanding the scope of key leaders and managers. While nurturing key internal talents, we continue to bring in new competencies, leveraging our recent acquisition, which bring to us great new skill sets. Our integrated supply chain is, as you know, a key capability, characteristics of the group.

Just keep in mind that every year, we produce more than 100 million frames and 700 million prescription and sun lenses. It implies a unique set of expertise. We did continue to invest in it in the first half of the year to add capacity and flexibility, which is of paramount importance in the current environment. In May, we celebrated the official opening of our new state-of-the-art prescription laboratory in France, so called Labex that is supporting our wearable and MedTech ambition also.

More recently, we inaugurated a manufacturing site in Laos that will become a center of excellence for the production of polycarbonate lenses. And we continue to ramp up our industrial campus -- new campus in Thailand and Mexico. All our new facilities are built to meet the highest sustainability standards. To support this road map, we recently inaugurated a large-scale solar farm at our Barberini site in Italy with a total power of 20 megawatts.

Now our performance in the first half of the year was driven by our unparalleled product and brand portfolio. Francesco already talked about our wearable category with Ray-Ban Meta and now also Oakley Meta and Nuance Audio. But we continue to strengthen our pipeline of product to address vision care needs and meet individual style aspiration with our new, well-received frame collections. You have heard it before, the myopia epidemic affecting young children is one of our biggest challenges for our industry.

It will affect half of the world population by 2050. EssilorLuxottica has been leading research in this field for more than 4 decades, culminating in the launch of the first-generation Essilor Stellest lenses now worn by millions of children in close to 50 countries. It is supported by an amazing 6-year clinical trial confirming its long-term efficacy. Building on this success, we are now launching Essilor Stellest 2.0, which offers an even higher efficacy compared to the first version. It is being rolled out in China as we speak, with more markets to come soon.

At the same time, the SightGlass Vision DOT Technology is also making great strides in China under the Nikon and Kodak brand. Myopia management brought us closer to the doctors. And the dialogue with the scientific community has become even deeper, thanks to our push into MedTech in particular, with Heidelberg Engineering, widely recognized for its invaluable contribution to the research of visual disorders. The International SPECTRALIS Symposium held in June is a great illustration of this.

In the field of presbyopia, I am pleased to share that we continue to unlock a constant flow of innovation across brands. Varilux has just expanded its range with the Physio Extensee, which optimizes vision clarity in any light by being able to predict the pupil size variation of its wearers. Nikon has recently come out with a Nikon Z, a new design focused on contrast management, while Shamir has reached great success with its Autograph progressive lenses.

Transition light management. I believe we have really achieved something interesting here. It is a great example of how we take a groundbreaking technology, create a platform and apply it transversely across our entire category range. Initially used with the prescription lenses, we expanded it to Plano, then made it a core benefit of our Ray-Ban Meta, where the penetration now goes beyond 50% in our direct-to-consumer channel. It's fueling our organic growth.

Speaking about frames. In recent months, I have seen so much creativity going into our new collections from optical to sun, from high end to entry level. Let's take Ray-Ban, and its new cool Wayfarer Puffer model available in a variety of bold colors. We are also researching novel materials to be used in eyewear and have recently showcased a new copper titanium-powered ultralight frame.

While our [ Air Flex ] material is the perfect companion for active kids designed to handle bumps and bents. At Oakley, alongside the new high wrap models, Masseter and Lateralis, we have just launched for this 50th anniversary, already 50 years of Oakley, Ellipse limited edition to celebrate the Axiom Space collaboration, taking the Oakley technology to the moon. As you can see, we have such a comprehensive offer of products and brands arising from our relentless focus on innovation, which combined with our unique go-to-market capabilities, have allowed us to keep fueling the mix and delivering a robust and balanced growth across all channels, categories and geographies.

I hand now over to Stefano, who will tell you more about our business and financial performance. Thank you. Over to you, Stefano.

Hello, everyone, and welcome to the first half 2025 earnings release. We're here today to share another remarkable quarter for EssilorLuxottica. Our revenue were up 7.3% at constant currency, very much in line with the performance that we delivered during the course of our first quarter. Three out of the four regions, EMEA, Asia and Latin America, they all delivered high single-digit growth in the second quarter, while North America posted a mid-single-digit growth trajectory.

The contribution of the two recently acquired Heidelberg Engineering and Supreme accounts for about 2 percentage points. While when we look at our foreign exchange, we had some headwinds in the course of the second quarter. We have about 4 percentage points of difference between our constant and current exchange results that is very much driven by the devaluation of the U.S. dollar against the euro that is about 5% during the course of the second quarter.

But now, as usual, let's move to the journey across the four different regions, and let's begin with North America. We had a strong quarter in North America, 5.5% top line growth in acceleration compared to the 4.2% that we recorded in the first quarter. I would say that these results, it's quite strong. Remarkable in a way because the impact of the single-digit price increase that we shared with you during the course of Q1 call is not really having a material impact on the second quarter and that's very much due to the phasing during the second half of 2025.

On the B2B side, the two most important channels, key accounts and independents, they all delivered positive growth during the course of the second quarter. On the ECP side, the growth was very much driven by a strong Vision Source alliance, and the key accounts, our key accounts were up double digits. So very pleased on that side. Conversely, department stores and our e-commerce partners were actually negative during the course of Q2.

If we look at our two product categories now, the frame business was up high-single digit, very much thanks to strong Ray-Ban Meta in North America. But I would say also that Oakley and Ray-Ban on the prescription side delivered a very strong quarter. On the luxury side, I would probably mention Miu Miu, as the brand was in a spotlight in terms of growth for the quarter. The other key product category are lenses.

On the lens side, we were positive both single vision and progressive. We were positive on Transition, and I would say the price/mix was the predominant driver of our growth during Q2. If we now move to the direct-to-consumer channel, an outstanding quarter for DTC in North America, high-single digit growth in revenue and further acceleration versus the trend that we saw in Q1. I will probably give you two highlights on the two most important banners that we have here. LensCrafter delivered high-single digit comp sales, great execution from the LensCrafter teams, all the KPIs trended on the positive territory, whether we are looking at traffic, whether we look at conversion, volume, price, they were all positive.

And what I can tell you already that Q3 has started with a further acceleration to the trend that we've seen so far. The second important banner is clearly Sunglass Hut. Comp sales were just above 6% in acceleration compared to Q1. Ray-Ban Meta was key in the growth trajectory for the Sunglass Hut banner in North America, and approximately 60% of the Ray-Ban Meta that were dispensed in Sunglass Hut had Transition lenses attached to it.

The international location of Sunglass Hut performed better than the domestic one, and price/mix was very much the primary driver of the growth of the Sunglass Hut banner. Now let's move to the following region, North America and after that, Europe.

Europe grew 9.1% at constant currency. We had another outstanding quarter for the region, more than 4 years in a row of positive growth for the Europe region. And just to put our numbers in perspective here, in 2023, Europe delivered 8% growth at constant currency. In 2024, we delivered again 8% growth at constant currency. And now in the first half of 2025, our revenue growth was 9.5% against 2024, remarkable and impressive track record.

Both professional solution and direct-to-consumer delivered an outstanding quarter with the third consecutive quarter double digit for direct-to-consumer and a high-single digit quarter for Professional Solutions. All the key countries in the region were actually solid positive. Italy, Germany, Turkey and Eastern Europe, they all delivered double-digit growth, while U.K. Scandinavia and Spain posted a high-single digit second quarter.

In Professional Solutions, our revenues were up on a high-single digit with volume and price/mix, both on the positive side. And I would say on the frame side, sun was very much on a spotlight. From a brand standpoint, probably a very similar picture to what we've seen and commented in North America. I would say Ray-Ban Meta continues to be very strong. And on the luxury side, I would probably mention Miu Miu and Chanel.

We now move to the other product category lenses, price/mix, more important than volume, strong delivering from Varilux, great delivery from Transition, I would say, no more to say for the lens product category. Direct-to-consumer now, high-single digit comps in optical, double-digit comps in sun. In the optical retail banner, we have France and Germany that deliver a mid-single-digit comp sales quarter, while U.K. and Italy posted high single-digit comps.

The Transition penetration on optical retail banner, which is a good indication of the transformation and integration journey that we're undertaking for GrandVision is now 90% of the photochromic lenses dispensed in GrandVision. That number last year was 75%. So a material lift in our penetration of Transition lenses. Another important KPI for us is represented by the subscription business model. We have subscription now available in 19 countries in EMEA, representing 22% of our revenue base and more than 1.3 million customers so far in 2025 have enrolled in the subscription program after -- by our optical retail banners.

On sun part of the business, I would say the sun definitely shined in the EMEA region. We were double digit in Spain. We were double digit in France. We were double digit in Turkey and a high-single digit growth in U.K. Volume was very much positive across pretty much all the key banners in Europe. And I would give you further highlights here. If we look at our top 20 sun doors in Europe, the one that represents approximately 15% of our revenue base, we delivered a 20% growth year-over-year.

Now we finished up with Europe. Let me move east to Asia Pacific, 8% growth at constant currency. It was a good quarter for Asia Pacific, low-single digit in Professional Solutions, double-digit growth on a direct-to-consumer channel. Let me give you a couple of highlights for this region.

From a country standpoint, Japan and Korea delivered double-digit growth. India and Southeast Asia were in the mid-single-digit territory, while China and Australia delivered a low-single digit quarter for Q2. The main country, China, I would say that the myopia solution continued to grow on a strong pace. We were high-single digit for the second quarter. Now there is a lot of excitement in China, very much due to the upcoming launch of Stellest 2.0 that would be progressively rolled out during the course of a third quarter across the different clinics, independent channels, and widespread in China and progressively in other parts of the Asian region.

And let's touch on direct-to-consumer with optical comp sales that were flat in Australia, and that was very much due to a very strong base last year in Australia, while China was up high-single digit comps. On the sun part of our business, we delivered a high-single digit quarter that was very much driven by a positive momentum in Sunglass Hut, Australia and a positive momentum in our Greater China business. They were both up on the double-digit pace.

Now the last region on the pie is represented by Latin America. And I should mention here another outstanding track record. 4.5 years of consecutive growth in the region. This is clearly indicating that the premiumization journey that EssilorLuxottica is undertaken in the region for both lenses, for frames, for instruments is all going in the right direction. Both channels grew approximately 8% during the course of the second quarter. If we look at our B2B Professional Solution, frames were up double digit. And I should probably highlight here the successful rollout of Ray-Ban Meta in Mexico. Another critical brand for us is Oakley. Oakley continue to be strong in the region. While on the lens side, I would say probably mid-single-digit growth in Varilux, high-single digit growth on our single vision Eyezen lenses.

And let's touch on direct-to-consumer here for the region. Sun retail banners were strong. We were double digit with Sunglass Hut and Solaris banner in Mexico and Sunglass Hut in Andes. So we were strong overall on sun part. Optical business was up mid-single digit, I would say, thanks to GMO, optical center in Guatemala and GrandVision banner, both in Mexico and in the Andes region. The growth was very much driven by volume, but also by the price/mix as a result of the premiumization efforts that we are undertaking on the region.

Now we have completed the journey across the four different regions. Let me walk you through the profit and loss for the first half of 2025. As usual, I won't comment top line, but I want to share with you that we are particularly pleased with our delivery in the first half of the year. This first half of the year happened despite material inflationary headwinds that are still present, despite the volatility related to the U.S. tariffs. And with all of that considered, we were able to hold the margin for the first 6 months of 2025.

When we look at our gross margin, we have about 80 basis point dilution at constant currency, which become 90 basis points at current exchange rate. On the gross margin side, I would say that the main impact is represented by tariffs that heavily marked our profit and loss, in particular, in the second quarter. But also, we were impacted by the dilution related to Ray-Ban Meta that posted an exponential growth during the first half of 2025.

The combined effect of those two items, I would say, is in excess of 100 basis points, but we were able to offset those headwinds, at least partially with a positive price/mix effect with a positive management of product innovation and pricing. When we look at our OpEx, I would say, good management of our operating expenditures. As a percentage of revenue, OpEx were down 70 basis points lower than last year.

Our G&A were kept well under control and that allowed us to execute the strategic investment on the key initiatives that we are undertaking in 2025, supporting on one side the exponential growth of Ray-Ban Meta and on the other side, progressively rolling out Nuance across U.S. and the EMEA countries that leads overall to an operating margin that is flat year-over-year and 20 basis points dilutive at current exchange rate.

When we look at our results below the operating profit, I would say that we have an increase on our cost of debt, although if we just look at our net debt in percentage, that is about 1 percentage point. So we are happy with that. And from a tax rate standpoint, we have just a slight increase year-over-year. That leads to a total net income that is down 10 basis points at constant currency and 30 basis points at current exchange rates.

Now the last chapter of our journey here is represented by our free cash flow. I will give you 1 number, EUR 951 million for the first 6 months of the year for free cash flow generation. That's clearly a strong delivery, very much aligned with last year's figures despite a major negative impact from tariffs and also a negative impact from foreign exchange with capital expenditures that were actually higher than 2024.

So let me say that if we will look at our cash flow on a like-for-like basis, you will be looking at something that exceeds EUR 1 billion. And that clearly should reassure all of you about the strength and the solidity of our financial structure. But now let me hand it over to the operator for the usual Q&A session. Thank you.

[Operator Instructions] Our first question comes from Chiara Battistini, JPMorgan.

The first one is on Oakley Meta. I was wondering if you could share with us a bit of color on how to think about the ramp-up in terms of volume, both in terms of availability of volumes as well as how you're thinking about the distribution rollout between retail and wholesale. That's the first question.

And then the second question on the tariffs. Now that we have a bit better clarity, a little bit. And I was wondering if you could update us on the actions you see to offset some of the pressures between supply chain and possibly also some more pricing actions in the U.S. Thank you.

Good afternoon to everybody. I'll take the first question. We have a great expectation for this Oakley Meta, is an outstanding new platform with really better performance compared to the actual one. Battery will last longer, better camera and wonderful shape and look. We will open the distribution mostly at the same -- in the same country where Ray-Ban Meta is already distributed. So we expect a very fast ramp up, and we believe that it can match the number of Ray-Ban Meta and it's not the only one product that we have in pipeline, as we said in my introduction, something very exciting to come -- is waiting, will come later. Thank you.

Okay. Good afternoon, Chiara. I'll take the answer to your second question regarding tariffs. So we touched a bit during our Q1 call, if you recall, there are really two things on which we are working on right now. On one side, the diversification of our supply chain. And if you remember, what I shared with you last time, we have a clear, well-defined objective for EssilorLuxottica, manufacture and distribute our products in the most efficient location without compromising quality and service level.

So diversification give us different optionalities that we are leveraging depending on where it makes sense. And that's obviously extremely important. The footprint of this company is way more diversified than 4, 5 years ago. As I mentioned, the strategic investment that we had in Thailand, we had in Mexico, we had in France, give those optionalities that are very important for us to ensure quality and service level to the clients and the consumer that we serve every day.

The second important aspect to this is a price adjustment. We look to execution the single-digit price increase. You don't see much in the second quarter in the U.S. And remember, that was a price increase across product categories. You don't see much in the second quarter. The vast majority of this impact will be seen during the second half of the year. So those are the two fundamental pillars on which we're moving forward to mitigate the impact of those tariffs.

Our next question comes from Oriana Cardani, Intesa Sanpaolo.

Two questions. The first question is about the growth trend of the quarter and current trade. How was the growth progression over the quarter? And what are you observing in July across each region and for the group as a whole.

And the second question is on the revenue growth profile in the second quarter. Can you quantify the volume effect and the price/mix effect and which was more significant the price or the mix?

So let me give you a little update on current trading. July started well. We are very happy with the trend that we've seen. The two most important regions started at a very solid pace. I would say we are very pleased with the trend that we've seen so far. Some of them are in further acceleration. I mentioned before, LensCrafters, I would say, also optical retail in Europe.

In general, there is an acceleration in the trajectory that we've seen for the month of July on an organic basis, and that's obviously extremely pleasing. With respect to volume and price/mix, I think the dynamics are a bit different depending on which region, which product category you're looking at. In general, we see probably price/mix being more predominant in North America on the B2B side.

I would say Europe, for example, for lenses, we have a more balanced dynamic between volume and price/mix. But again, when we look at our retail volume, it's very strong. We're very pleased with the volume dynamic, especially in an optical retail banners in North America as well as in Europe. So to answer your question, generally, probably price/mix a bit stronger because product innovation, it's driving it and helping us to drive in the right direction that variable.

But at the same time, we have pockets of volume growth that are clearly very pleasing for us.

Our next question comes from Louise Singlehurst, Goldman Sachs.

You must be absolutely delighted, there's clearly a lot going on in the business. But if I could ask just two questions. Firstly, if we just talk about the improvement in North America in the Professional Solutions, obviously, that kind of flattish to low-single digit growth. And really with the view of how we should think about that going into the second half, just to manage expectations.

And then secondly, I wondered if we could just talk about the growth in DTC, if you can give us the growth mix perhaps between the organic, particularly on the wearables and the acquisitions, that would be fantastic.

Okay. This is Paul. So I will take the first question on the North America Professional Solution. I think it's a combination of a few very focused action that our teams are doing there. First one is we have a very good performance with the key accounts, with the large retail customer that we have, and that has been going on. They are leveraging our supply chain, our portfolio of product of the whole solution, the supply chain solution.

But at the same time, we have a big focus on the independent channel, as you know, with one part of this independent channel being regrouped in the so-called doctor alliance Vision Source, which is really outperforming the market with the quality of the consumer experience that they render in their 3,000 practice, and that is a really key pillar of our independent channel position.

In the side of that, we are reinforcing all of the program to the independent channels, leveraging the laboratory network that we have in the U.S. on which we have a focus to really leverage the service and the proximity service plus the platform of products that we are launching with the new Varilux Extensee, the further penetration of Transition. So we have a good activity focused on this channel. And you have seen in this quarter the progressive acceleration of this segment of our activity. So this is what I think should be a few key ideas when you think about the improvement, the acceleration that we see on PS in the U.S.

I take a part of the second, our growth in direct-to-consumer. So far, I believe that most part come from organic growth. There is pieces of Meta inside and the latest acquisition of Supreme. But what make us quite happy that the high speed of growth of direct-to-consumer. So our retail e-commerce usually anticipate trend that we see some months later, say in the Professional Solution in the wholesale because we are faster in execution because it's all inside of the company.

So what we believe that as our sellout is growing very well. Of course, there is a big push of innovation. It's not just Meta, but also in our store, Nuance is giving a little help and others, new product and the new collection are really -- also in the traditional business with the new brands are doing very well. And we believe that we will see the same growth also on wholesale in the next semester, if maybe you will give some [ detail on that. ]

The next question comes from Julien Dormois, Jefferies.

Congratulations on the recent performance in H1. I have two questions, one related to Meta. And in light of the tremendous success that you guys are having with Ray-Ban Meta, I was just wondering whether you have a plan to actually further raise the capacity expansion you announced. After the full year results, I think you said you should be able to produce 10 million pairs by the end of 2026, so I was wondering whether this very strong H1 performance is changing your mind in any way on this side.

And as insider, also a question we get from investors usually is whether Meta is participating to the CapEx on the expansion program? And my second question relates to Nuance, I was just wondering what the KPIs will be for you going forward on the product, maybe in the next 6 months or next 12 months and whether you would -- we should expect some announcement from traditional audiology networks or maybe third-party optical networks starting to partner with you and make official announcement of making Nuance available on their doors.

To the first Meta plan to raise our capacity, the plan is in full execution. Honestly is the Meta plan and that will really produce Oakley and Ray-Ban and maybe new product in the future is going in the right direction. And we really -- with some positive view, we believe that at a certain point, we will also have the necessity to increase this capacity above the 10 million pieces that we expected now.

Julien, Nuance, if I understood well your questions. Clearly, we're looking at a variety of different metrics. On one side, it's very important to see the penetration of prescription business within Nuance, and that's obviously pretty high. I think we were looking at something in excess of 80% with peaks in certain countries are even higher than that.

So it is a platform, as we said many times to deliver the better audiology service for consumer. It is a platform that help people to see better every day. That's obviously extremely important. The other, I believe, critical KPI for us, it's obviously the productivity that we look at on our own retail network, and we look at also on the B2B side. So again, there is a variety of metrics.

I should say that probably out of the 10,000 doors that we have opened right now, the positive thing is that it's pretty balanced between B2B and direct-to-consumer doors. So we have a pretty good indication of what's going on, on both sides of our commercial proposition.

Our next question comes from Veronika Dubajova, Citi.

Congratulations on a very impressive set of results. I will keep it to two, please. My first question is on the second generation of Stellest. And Paul, if you could maybe talk to some of the differentiation that we'll see there. And maybe also just confirm that you are still on track for FDA approval for the first generation by the end of the year? And maybe if you have any updates to share there, that would be much appreciated.

And then my second question is for Stefano. Just thinking through the moving pieces in terms of margins in the back half of the year. Just wondering if you could talk through how you think about the benefit of the price increases versus the tariff headwinds. Obviously, both of them will sit there for the entirety of the period. And maybe sort of at this point in time, if you feel the probability that margins are up or down in the back half of the year given the moving parts that you see.

Yes, this is Paul. I will take the first question. When you think about the myopia management, I would like you to think in two ways. First, that we have -- we are working constantly to improve the two platforms that we have put at work, the micro lens Stellest technology platform and the DOT technology, which is different, it's a diffraction technology, both showing great efficiency.

So what we have done with the second generation of Stellest is we have worked, our research team, on optimizing the micro lens, and we have found by giving them a different geography, a bit more power, a bit more asphericity that you actually increased significantly, the slowing down. And we have right now just 1 year data but this is very, very promising. So we just launched it in China as we talk, and we will then roll it out towards Europe, the Stellest.

The second idea I want to give you is that we are really looking at myopia management, building a Stellest platform, and that is what we are putting in China in place, including Stellest frames, Stellest wearables, a full suite of solutions, including the data management, and I would like you to think this way. In regard to the FDA for Stellest, one, which is the product that we are filing for, we are in line and having very good progress with the FDA. We are targeting by the end of this year, early next year, like we have -- like I have always told you and that seems to be going in the right direction, but you always have to be very low profile, just work with the FDA and then -- but we are quite confident.

Veronika, I'll take the second question on margin H2. So when I look at tariffs effect, right, I mean we're clearly going to feel them in the second half of the year. Hopefully, we have now a more stable and crystallized picture for the remainder part of 2025. But really, the way we think about it is not just about pricing, it's really taking into action the two pillars that I described you before. On one side, all the supply chain management, manufacturing and distributed in the most efficient location, which clearly is already giving us some benefits that we see in the profit and loss at the gross margin level.

On the other side, there's clearly the pricing action that we are taking, just in the U.S., cross product category, single-digit target. I think those two combinations are pretty powerful. Mix management will help us in the second half of the year. Stellest 2.0 to Paul's point will be an important asset that we will add in our growth trajectory. I believe that we will take Nuance at scale. At that scale, it means a larger number of doors, at scale means an enlargement of the product category.

So there's a lot of things that will come into play during the second half of the year that will help our gross margin. Then I think we look at the gross margin, but we cannot underestimate the work that has been done on the OpEx side. Our OpEx were down 70 basis points year-over-year. That tells you that we can take actions and become more efficient in our cost structure, still investing in what is critical for the future growth of the company. This is really the recipe of what we put in place also for the second half of this year.

Our next question comes from Luca Solca, Bernstein.

A couple of specific questions. When it comes to Nuance and hearing aids, have you fine-tuned already your customer recruitment process. Are you relying on sales associates to try and sell the product to people walking in or like I think you did in Italy, are you going to advertise the product more directly so as to generate some kind of pull effect. When it comes to Stellest, I wonder if you have an update on how the pickup is proceeding in Europe as a proportion of the success you had in China, I understand that Stellest has been a very important tool for you to penetrate the Chinese market. I wonder how important it has become relative to that in the European market.

I try to answer to the first question. Nuance is a brand-new platform that is much more complex that really can appear at the first glance. You have to combine the capability to advise on hearing aids. At the same time, say, 80%, 90% of our Nuance frame need correction, and so they need prescription lenses. So we have really to coordinate two different industries and -- really to deliver a complete pair that is not easy really to explain and to execute.

We believe that in the second half of the year and much more next year, we will push on the communication from TV and any others, media, really to establish this new category of product and really explain how it works, what -- how it can be used because it's -- really the purpose is so relevant on the Nuance product because you have this combination of correction of sight and the hearing aids part.

We also plan to have a full assortment. And so we wait to have a bigger assortment of product with different level of price and a different level of performance. At that time, when the machine will run perfectly, so that is the right time to spend money to advertise and to establish this new category.

Also because we are the only one into the market, so there is no one that it can help us in this adventure. And this is what is -- makes the rollout quite tough at the beginning but we see the same trend that we saw on the Meta when we launched the story -- Ray-Ban story at the beginning.

It was something really very difficult to communicate and also was difficult from the customer's point to understand how to use it. Now it seems very easy. Everybody are just getting in the store, ask for the AI glasses, Ray-Ban Meta, Oakley Meta now is already -- we have customer that are coming in the store, and they're asking. And this seems to be the easiest product to sell.

Nuance is at the first stage, but it's very promising, different pricing, very higher than the Meta product. And so also for this penetration, it will be more difficult but we are very satisfied. We are over the expectation, and we believe that with the next generation of product, we achieved a wonderful result.

So on Stellest, Luca, first, China, I remind all of us that we started several years ago, deploying the new technology platform, the myopia management, so-called with Stellest. When in Europe, we started 2.5 years ago, starting in France. And on top of that, in China, you have a very major pandemia issue for children, which fortunately is not as dramatic in Europe.

So China, as you have heard say, it's myopia solution in China, in the first half is 25% of the total activity. So it's very significant. And the penetration of the Stellest solution, which is leading is quite high with the Chinese children. In Europe, in certain countries, we start to have a nice penetration. But of course, it's part of a full solution that we propose to the ophthalmologist, to the opticians as part of the full vision care program that we offer alongside all of the other program.

It is not going to represent the share of the sales, as you see in China, but it is very important to have it in EMEA. We see it nicely accelerating in key countries and Stellest is leading the market. It's a great platform. This is where we are at this point. And of course, preparing, like I said earlier, the U.S. for next year or later this year.

The next question comes from Hugo Solvet, BNP Paribas Exane.

Congrats on the results. Two, please. First, it seems that you guys are getting some volume leverage on Stellest division on smart glasses. Can you maybe expand a bit on the profitability of the smart glasses category as a whole in the context of very strong demand and also lower China tariff.

Second, on B2B channel in North America. Can you expand a bit maybe on the Varilux launch? Do you expect it and its momentum to further help for the recovery across non-partners into Q3 already? Or will it be a bit more of a gradual launch?

Hugo, I'll take the first question, and then I think Paul will give you a bit more color on the B2B in North America. So the growth, the exponential growth that we actually see in wearable, it's obviously very important. As I mentioned last time, every time, we are getting progressively better on a product that we said is margin dilutive from the beginning.

Do not forget that on wearables, we have a high penetration of Transition lenses. Do not forget that on wearable, we have the prescription option that is very successful, and that clearly creates additional pockets of revenue and profitability that we should account for. And obviously, very important on a go-forward basis. Paul, I don't know if you want to give a bit more color on the B2B North America.

Sure. No, the Varilux launch, Varilux Extensee, which is replacing Physio is a very important launch, and I'm glad you point on it to go. As you remember, 2 years ago, we launched a very innovative Varilux XR at the top of the range with the personalization so-called track and deploy measuring device in the independent practice to really make it a full experience, including the personalization.

But it was important that we follow up with also launching beneath Varilux XR this new platform, the replacement of Physio, and this is what this Varilux Extensee is, including the personalization also aspect. And so it's really part of this overall dynamic in this core category, which is a progressive lens, this core brand, which is Varilux, really leverage it in all of our relation with the independent practice.

So just see it as a continuum of what we do. In parallel to that, we have also great innovation in the progressive portfolio leveraging the Shamir Autograph design, which is also doing very well in the U.S. So this is a category which is really a key focus for the teams and for the labs.

The last question comes from Domenico Ghilotti, Equita.

The first question is on the smart glasses pace. So if you think you can keep the pace that we have seen in the first semester also going forward or at least in the second half, given also the contribution of Oakley. And the second, on the tariff dilution, I'm not sure I got the dilution that you had from the tariff in the first half? And should I expect this dilution to decline over the second half, thanks to price/mix?

Just a follow-up on the previous question.

Meta, the growth of the category, AI glasses with Oakley, with Ray-Ban and maybe with some other brands, we don't expect to keep the same pace. We expect to accelerate as we already see right now. Our forecast is really higher than before. And really, we are expanding capability. And on top of the 10 million pieces that we already planned in China, we are really adapting some other's plant in -- especially in Thailand to supply this kind of products. So we believe that it will represent a relevant part of our growth.

And also, I would like really to comment on this dilution, and nice -- dilution seems to be a bad word. But honestly, what I care is about the money that I can make and the earnings per share that I can really give to my shareholders. And Meta, also with less margin is making a lot of money. And since the volumes are growing very, very fast, that will help the company really for the future investment and also for our journey in the MedTech.

So I'll take the second question, Domenico, tariff dilution. So just to make it simple, Domenico. H1 tariff headwinds, very much Q2 impact. Second half of the year is going to be a Q3 and Q4 impact, very simple. But the actions, the mitigants that we are undertaking have so far a very marginal impact in the first half of the year.

I mentioned pricing. And I will also say the supply chain diversification. You could expect a much broader impact from those actions during the second half of the year. So the offset that I mentioned before, will take a greater magnitude of positive impact in the second half of the year, and it will obviously help to offset the impact of those tariffs.

So we close the call. We thank everybody to follow us for the question, for the comment that will help our company to really go ahead stronger and with better results. Thanks a lot, see you next time.

Thank you.