Luxottica Shares Slump Most Since 2014 as Co-CEO Khan Resignsby
Former P&G executive to receive 7 million-euro payoff
Company's 80-year-old founder Del Vecchio to take Khan's role
Luxottica Group SpA shares slumped in Milan after co-Chief Executive Officer Adil Mehboob-Khan resigned, becoming the third leader the maker of Ray-Ban glasses has lost in 15 months.
The stock dropped as much as 9 percent, also hurt by full-year sales that slightly missed estimates. The decline was the steepest since October 2014.
Khan will leave at the end of February and be replaced by Luxottica’s 80-year-old founder Leonardo Del Vecchio, the company said after markets closed on Jan. 29. The departure of the former Procter & Gamble Co. executive adds to recent management turbulence, coming after the October 2014 resignation of CEO Enrico Cavatortadue to disagreements on corporate governance. Cavatorta had only been in the role for about a month, following the departure of Andrea Guerra after a decade at the helm.
“This will be greeted with some skepticism by investors,” Julian Easthope, an analyst at Barclays, wrote in a note. It’s likely that one of the company’s operational heads will take over after Del Vecchio has been in charge for two-to-three years, he said.
Khan’s departure was amicable, Luxottica said, adding that he will receive a payoff of about 7 million euros ($7.6 million).
The stock was down 8.4 percent at 52.70 euros as of 10:52 a.m. in Milan, giving the company a market value of 25.5 billion euros.
Luxottica’s net sales amounted to 8.84 billion euros in 2015, trailing the 8.94 billion-euro average estimate in a Bloomberg survey. Growth was 4.3 percent at constant exhange rates, with the fourth quarter showing a 2 percent gain.