Meta Partners' Ray-Ban Smart Glasses Grow 11% Sales but Miss 19-20% Margin
Meta’s partnership on Ray-Ban smart glasses helped EssilorLuxottica drive AI-powered eyewear sales growth over 11% last quarter, but those devices logged a 16% adjusted operating margin below the 19-20% target. Investor concerns triggered a 30% share slide since November driven by pricing talks and looming Google and Apple competition.
1. Smart Glasses Partnership
Meta has teamed with EssilorLuxottica since 2021 to develop Ray-Ban smart glasses, which delivered over four percentage points of the group's 11.7% revenue growth in the third quarter last year, showcasing AI-powered eyewear's contribution to top-line expansion.
2. Margin Pressures
The smart glasses lineup posted a 16% adjusted operating margin last year, trailing the 19-20% target, as Ray-Ban Meta devices yield lower profitability than core eyewear; both companies are negotiating pricing and strategic frameworks to boost margins.
3. Rising Competition
Investors have driven EssilorLuxottica shares down over 30% from November highs due to margin concerns and the entry of U.S. competitors; Google plans to launch its smart glasses this year and Apple is developing its own models, intensifying market rivalry.
4. Financial and Market Impact
Market capitalization declined from 149 billion euros last November to about 100 billion euros, reflecting investor scepticism ahead of EssilorLuxottica’s first-quarter revenue report due Wednesday, which will be closely watched for smart glasses performance.