Luxottica CEO Says 2013 Started Positively, Sees Acquisitions
Luxottica Group SpA, (LUX) the world’s largest maker of eyeglasses, got off to a “positive” start in 2013 and may make more acquisitions this year, Chief Executive Officer Andrea Guerra said in an interview.
The owner of the Ray-Ban and Oakley brands today reported fourth-quarter net income climbed 19 percent to 77 million euros ($101 million). Adjusted for one-time items, profit for the year rose 24 percent to 567 million euros, compared with the 565 million-euro median of 15 estimates compiled by Bloomberg.
“The start of 2013 has been particularly positive and March will be the same,” Guerra said in the interview. The Milan-based company is forecasting “double-digit” growth in the premium and luxury segments in 2013.
Luxottica has made acquisitions to speed its expansion. In November, the company agreed to buy Alain Mikli and created an atelier division that includes brands such as Oliver Peoples, Paul Smith, Alain Mikli and Starck Eyes. Luxottica is focusing on growth opportunities in Southeast Asia, particularly in Indonesia and Thailand, Guerra said.
“Indonesia is a huge market that’s growing fast,” the CEO said. “Vietnam is a new option on our table.”
Luxottica’s emerging-market sales increased 26 percent in 2012. The company said it has witnessed a shift in demand for premium and luxury brands, especially in so-called “gateway and mega cities” and “high potential channels such as travel retail and department stores.”
Luxottica rose 3.6 percent to 35.56 euros in Milan trading today. The earnings were announced after markets closed.
New sales channels are growing faster than traditional retail outlets, the company said. “Department stores, in particular, remain the primary point of reference for premium sunglass consumers and offer significant growth potential.”
The owner of the Sunglass Hut and LensCrafters chains will continue to invest by expanding the specialty businesses internationally in both the optical and sunglass segments.
Luxottica proposed a dividend of 58 euro cents a share, up from 49 cents last year, with a total payout of 273.5 million euros, equivalent to half of the company’s net income.
Regarding the euro’s rebound against the dollar this year, Guerra said he was more concerned about “volatility” than exchange rates. “A rate of $1.15 to $1.25 would be proper but we’re happy with $1.31.” The euro fell versus the dollar today after the Netherlands said its budget deficit will breach the European Union’s limit for this year and 2014. The currency weakened to $1.31 at 4:45 p.m. London time.
Luxottica shares have risen about 14 percent this year, the fourth-best performance in the benchmark FTSE Index and giving the company a market value of about 16.8 billion euros.
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