Luxottica Targets Growth in Emerging Markets, Raises Dividend
Luxottica Group SpA, the world’s largest maker of eyeglasses, predicted it will increase revenue and profitability this year as consumer demand for branded goods rises.
The company is in “an ideal position to continue throughout 2011 with solid, stable growth in net sales and a more than proportionate increase in profitability,” Milan-based Luxottica said in a statement today.
The owner of the Ray-Ban and Oakley sunglasses brands generates about 60 percent of its sales in North America and has tripled sales in emerging markets in the past six years. Luxottica said it aims to increase sales in emerging markets by about 20 percent this year and “significantly” boost revenue at Sunglass Hut stores. It’s targeting growth in its U.S. business and the Oakley brand, and premium and luxury-brands may continue “double-digit” growth, Luxottica said.
Sales in the wholesale division rose more than 15 percent in January and February, while comparable-store sales in North America advanced about 6 percent, Luxottica said.
Volumes sold in the larger Asian emerging markets such as China and India should grow by 120 percent over the next three years, Luxottica said. The company said it expects to have about 500 stores in China by 2013.
“There are many great opportunities to ensure solid growth for Luxottica, both in emerging and more mature markets,” Chief Executive Officer Andrea Guerra said in the statement. He predicted “a year filled with great success.”
The company plans to raise its dividend payment for last year by 26 percent to 44 euro cents a share, higher than the 41.9-cent average of 21 analyst estimates compiled by Bloomberg.
Luxottica today reported a 34.5 percent increase in 2010 net income to 402.2 million euros ($555 million), in line with the forecast it reiterated last month. The Italian company, which also makes eyewear under license for Prada and Chanel, reported on Jan. 24 that sales rose 14 percent last year to 5.8 billion euros.
Fourth-quarter net income climbed 88 percent to 55.1 million euros from a restated 29.3 million euros a year earlier, the company said. That was the biggest increase in a quarter in six years, according to data compiled by Bloomberg.
Luxottica has risen 14 percent over the past year in Milan trading, giving the company a market value of 10.5 billion euros.
The company is holding an investor day in London tomorrow.
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