Ray-Ban maker EssilorLuxottica to scrap dividend, eyes cost cuts

Oakley and Ray-Ban maker EssilorLuxottica (ESLX.PA) said on Monday it would scrap its dividend and might also consider cost cuts as the coronavirus pandemic chokes its business.

Companies in France and elsewhere have come under pressure from unions and governments to forego shareholder payouts in order to save up cash to cope with the coronavirus crisis.

EssilorLuxottica said it would not submit a proposed dividend payment at its shareholders meeting in June, although it could propose a special dividend payment later in the year if its business staged a sufficient recovery.

The firm said it would launch a 100 million euros ($109 million) fund to help staff affected by the outbreak.

The eye wear company, formed in 2018 as a merger between French lens manufacturer Essilor and Italian spectacles maker Luxottica, said that as part of its cost-cutting plans, it was looking at reducing or deferring parts of its managers’ salaries. The company’s board of directors had voted to reduce their attendance fees by 50%.

In late March, EssilorLuxottica had abandoned its financial outlook and warned of a hit to second-quarter profit due to the coronavirus crisis.

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