Luxottica Group, the parent of Oakley, Ray-Ban and Sunglass Hut, reported net sales in the third quarter of 2018 were up 3.5 percent at constant exchange rates thanks to the strong performance of the Retail division and e-commerce platforms as well as solid growth in Europe, North America and Asia-Pacific.
The positive results were driven by a combined increase in the average unit price and volumes and by an acceleration of sales of key brands.
The performance improvement in both divisions allowed the group to close the first nine months of the year with sales up 1.3 percent at constant exchange rates2, growing profitability and strong free cash flow generation.
The wholesale net sales in the third quarter were up 0.9 percent at constant exchange rates2 (-1.0 percent at current exchange rates) led by the positive performance in North America and the strong improvement in Europe. During the summer, Europe recovered after a delayed start of the sun season.
The retail sales accelerated compared to the first six months of the year with comparable store sales up 2.8 percent and net sales up 4.8 percent at constant exchange rates2 (+4.9 percent at current exchange rates). This confirms the effectiveness of strategic initiatives aimed at improving the operating model and the ability of the group’s retail brands to execute them. Europe and North America drove Sunglass Hut sales, up 8 percent at constant exchange rates2. Positive sales were also driven by LensCrafters in North America, OPSM in Australia and Ray-Ban stores all over the world.
In the third quarter, sales from the group’s e-commerce platforms were up by 16 percent at constant exchange rates2. Ray-Ban.com confirmed it is the main driver of the Group’s online business, benefiting from the exclusive launch of special collections and the brand-new campaign for RayBan Studios, which strengthens the link between the brand, music and millennials. SunglassHut.com and Oakley.com contributed to the excellent performance of the online business
as well.
“We’re very pleased with the growing results posted in key countries and across all channels in this quarter. We are keeping a good balance between growth and profitability as further proof of the fact that global strategies and quality of execution are delivering the results we expected. A special thanks goes to all the over 80,000 employees of Luxottica who, in this complex journey towards the creation of EssilorLuxottica, have always shown me full confidence, maintaining their passion and the attachment to our group” stated Leonardo Del Vecchio, Executive Chairman of Luxottica.
“The strategic renewal that the group undertook over the last three years strengthened the vertically integrated business model and favored organizational simplification, increasing decision-making speed and execution precision. The excellent results are a solid basis for carrying out the integration with Essilor. In light of the positive trend in the retail and e-commerce businesses and the return to growth of the Wholesale division, we confirm the outlook for 2018, with expected sales growth around 2 percent and solid profitability.”
Luxottica and Essilor on October 1, 2018 announced the creation of EssilorLuxottica, a global leader in the design, manufacture and distribution of ophthalmic lenses, prescription frames and sunglasses.
North America – In the third quarter, the group’s revenues in North America were up 3.7 percent at constant exchange rates2 thanks to the solid growth recorded by both divisions. Wholesale sales increased by 3.9 percent at constant exchange rates2 with the positive contribution of all sales channels and, in particular, of key accounts, independent eye care professionals and the sport channel.
The Retail division’s excellent results, with sales up 3.6 percent at constant exchange rates2, are driven by all retail brands, with the exception of Sears Optical. Sunglass Hut continues to be the top destination for consumers for premium eyewear, also thanks to an increasingly omnichannel offering. LensCrafters is continuing the process of transforming its business model, with very satisfying results: revenues grew by 2.7 percent at constant exchange rates2 and the comparable stores
sales returned positive to +2.3 percent.
Europe – In the third quarter, the Group’s net sales in Europe grew by 4 percent at constant exchange rates, driven by the excellent performance recorded in France, the United Kingdom, Turkey and Eastern Europe and the double-digit growth of the retail business. The Wholesale division showed a recovery compared to the first part of the year, when commercial policies realignment and the delay of the sun season led to a temporary slowdown in sales in the region. Improvements were
also registered in Mediterranean Europe.
Asia-Pacific – In the third quarter, the group’s net sales in the Asia-Pacific region showed an increase in sales at constant exchange rates of 5.3 percent. Every market in the region contributed to growth, with the exception of Taiwan, which was temporarily affected by the upcoming opening of a commercial subsidiary. Performance in Australia confirmed the strength of OPSM and Sunglass Hut. At the same time Japan, Korea and Southeast Asia, strategic markets for the group, recorded an acceleration of growth.
Latin America – After years of solid growth, the group’s net sales in Latin America reported a slight decline of -1.2 percent at constant exchange rates2 with the contraction of the wholesale business in Brazil because of political and macro challenging environment. On the other hand, Mexico and the retail chains in Brazil and the rest of the region continued to register positive performances.
Luxottica is a leader in the design, manufacture and distribution of fashion, luxury and sports eyewear. Its portfolio includes proprietary brands such as Ray-Ban, Oakley, Vogue Eyewear, Persol, Oliver Peoples and Alain Mikli, as well as licensed brands including Giorgio Armani, Burberry, Bulgari, Chanel, Coach, Dolce&Gabbana, Ferrari, Michael Kors, Prada, Ralph Lauren, Tiffany & Co., Valentino and Versace. The group’s global wholesale distribution network covers more than 150 countries and is complemented by an extensive retail network of approximately 9,000 stores, with LensCrafters and Pearle Vision in North America, OPSM and LensCrafters in Asia-Pacific, GMO and Óticas Carol in Latin America, Salmoiraghi & Viganò in Italy and Sunglass Hut worldwide.
Photo courtesy Oakley
