Italian Eyeglasses The U.S. Loves

Luxottica, already a hit with the chic set, may soon make it big on Wall Street. The Italian manufacturer of eyeglass frames, including pricey, fashionable ones for such designers as Giorgio Armani and Yves St. Laurent, sells worldwide, but some 60% of its output goes to the U. S.

Luxottica's stock, which trades on the Big Board through American Depositary Receipts (ADRs), has already had a nifty rise, from 20 in January, just above its initial effering of 19 a year earlier, to 30. But some pros think it has a lot further to go. "In this slow-growth economic environment, we're concentrating our bets on unrecognized growth companies that will show sustained earnings," says Tom Mudge, a portfolio manager and analyst at BBK in San Francisco. He has been a big buyer on the belief that the stock could double this year on strong earnings.

Mudge sees earnings hitting $2.15 a share this year, vs. last year's $1.83, rising to $2.60 in 1992. He says the company is emphasizing designer frames, which bring in operating profit margins of about 20%. But he notes that Luxottica is also pushing its midpriced frames through Wal-Mart Stores, which has agreed to sell Luxottica frames at the new eyeglass centers it has set up in several stores. That, says Mudge, should further expand Luxottica's penetration of the U. S. market, where its biggest customers already include national eyewear chains LensCrafters and Pearle Vision Centers.

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