Luxottica First-Quarter Profit Rises on U.S., Emerging Markets
Luxottica Group SpA, (LUX) the world’s largest maker of eyeglasses, said first-quarter sales and profit rose in a “solid, strong” start to the year, boosted by growth in emerging markets and the U.S.
The owner of the Ray-Ban and Oakley brands today reported net income gained 24 percent to 159 million euros ($209 million). Net sales increased 4.2 percent to 1.86 billion euros. Analysts had estimated profit of 155.7 million euros on sales of 1.87 billion euros, according to data compiled by Bloomberg.
“We had a more-than-solid initial start to the year in the U.S., our most important region,” Chief Executive Officer Andrea Guerra said in a phone interview. “Sales in countries like France and Germany, and continental Europe in general, have exceeded expectations with high single-digit growth.”
The Milan-based company 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 and Paul Smith. Sales at the new division, which are “just above” 100 million euros, may double in the next three years, Guerra said. He added there may be other acquisitions in this area in the medium term.
The licensing agreement with Armani Group became operational in the first quarter, the company said. Guerra said orders for Armani-branded eyewear are “above our expectations.” Orders are forecast at about 130 million euros for the first year, he said.
Luxottica’s emerging-market sales at constant exchange rates increased 17 percent in the first quarter, led by a 30 percent gain in Brazil. “Emerging markets are doing their job,” Guerra said. “Performance during the year will hopefully see an acceleration.”
Luxottica rose 2.8 percent to 40.91 euros in Milan trading today. The earnings were announced after markets closed.
“April has been a good month,” Guerra said. “We’re ready for spring and summer, which are pretty critical periods for us.”
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