Luxottica Q3 Profit Up 10% on Sales Rise

Milan—Luxottica Group S.p.A. reported today that its third quarter income rose 9.1% as sales continued strong across North America and emerging markets.

For the quarter ended Sept. 30, Luxottica posted net profit rose to 111.2 million euros. Net sales were also up 4% to $1.52 billion euros (about $2.11 billion) from $1.46 billion a year ago. The company said sales would have risen 10% without the weak U.S. dollar vs the euro.

Both figures came in ahead of analysts’ average forecast that expected a 105.3 million euro profit on sales of 1.50 billion euros.

“Growth was solid across the board, from North America—where our net sales in U.S. dollars were strong growing by 7.8% during the quarter—to India, from China to Brazil, from Italy to South East Asia and Latin America, where the retail chain GMO joined our organization,” said Andrea Guerra, Luxottica’s ceo.

The company, which has reported increases for eight consecutive quarters, said that growth was particularly strong in emerging markets where sales increased 35% on a constant exchange rate.

Target Market: 2 Billion New Eyewear Consumers

By brand, Guerra said Ray-Ban and Oakley continued to record “very positive results” along with higher-end licenses Burberry, Tiffany and Ralph Lauren. In its Sunglass Hut division, net sales increased by more than 15%.” LensCrafters was able to improve on last year’s third quarter results, which were the best over the last four years, he added.

“Today, there are increased uncertainties generally in international markets, but we believe there are still significant opportunities for growth: in the next few years, the target market for our products could increase by more than 2 billion new consumers,” Guerra said.

Guerra said Luxottica expects to open between 60 to 70 new stores in China next year after 60 new openings this year.

In a conference call with analysts, Guerra confirmed his forecast from March that profit could grow twice as fast as sales this year if revenues grow in the high-single digits like they did last year.

Guerra also confirmed Luxottica is in talks with Giorgio Armani for its license which expires next year with rival Safilo. However, Safilo has said that it hopes to seal a renewal deal with Armani by the end of this year.

This year, Luxottica completed the acquisition of optical retailer Multiopticas International for a total investment of 140 million euros as well as two smaller Mexican chains and entered the Israeli market with the purchase of Erroca.

 

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