Foreign Markets Sustain Luxottica’s Growth Amid Euro Storm

Net sales at LUX’s wholesale division, which owns a portfolio of premium and luxury sunglasses brands, reached €788.2 million ($1,012 mm) up 15.2 percent from a year earlier, or 8.4 percent in currency-neutral (c-n) terms. For the first half of the year, net sales reached €1,515.0 million ($1,966 mm), up 12.6 percent (+10.1 c-n) as compared to €1,345 million in the first half of 2011.

 

Operating income grew to €207.7 million ($267 mm), from €188.5 million in the second quarter of 2011. Operating margins was 26.4 percent in the second quarter and 25.1 for the first half.

Performance was strongest in North America and the emerging markets of China, India, Brazil, Mexico and Eastern Europe. Sales grew in the double digits in Germany, the United Kingdom and the Nordic countries. Sales als0 grew solidly in France, but declined in Italy and Spain. CEO Andrea Guerra attributed strong growth in North America to both a growing market and gaining market share and credited some of the gains in Western Europe to a new licensing deal with Armani.

Oakley achieved record profits in the quarter and has developed a clear lead in the market for prescription sunglasses, which Luxottica dominates in North America through its nearly 1,000-store LensCrafters chain.

Oakley also boosted results in Luxottica’s Retail Division, which includes rapidly growing Sunglass Hut and GMO, a recently acquired Latin American chain. Net sales for the division reached €1,094.0 million ($1,405 mm), up 17.7 percent (+5.9 c-n).

 

Worldwide comparable store sales at Sunglass Hut increased by 10.6 percent, with particularly positive performance in North America, emerging markets, South Africa and Australia. At LensCrafters, by contrast, comparable store sales grew by only 1 percent, due in part to interruptions to store operations incurred during an SAP installation that began in early June.