Luxottica Group S.p.A. announced results for the three-month period ended March 31, 2004. Consolidated net sales for the quarter improved year-over-year by 7.9% to euro 760.4 million.
Consolidated Results
First quarter results
-- Consolidated net sales for the quarter improved year-over-year by
7.9 percent to euro 760.4 million.
-- Consolidated operating income for the quarter improved year-over-year
by 7.9 percent to euro 120.1 million. Consequently, consolidated
operating margin for the quarter was 15.8 percent.
-- Consolidated net income for the quarter improved year-over-year by
8.5 percent to euro 71.2 million. Consequently, consolidated net
margin for the quarter was 9.4 percent.
-- Earnings per share or per American Depositary Share (ADS) (one ADS
represents one ordinary share) for the quarter were euro 0.16. In U.S.
Dollars, earnings per ADS (EPADS) for the quarter were US$ 0.20.
-- Consolidated net outstanding debt as of March 31, 2004, was euro
1,415.6 million compared with euro 1,470.4 million as of December 31,
2003. This reflected an improvement of euro 54.8 million, due to
positive cash flow generation for the quarter.
Leonardo del Vecchio, chairman of Luxottica Group, commenting on the consolidated results for the first quarter, said: “Our results for the period were particularly encouraging, especially in light of the 14 percent year- over-year devaluation of the U.S. Dollar against the Euro in the period. At the same time, based on market feedback and other indicators we believe to have further strengthened our leadership even in markets that are not growing in absolute terms, but are strategic to our Group. This demonstrates the strong balance of our brand portfolio, which in 2003 grew even stronger and, thanks to our recognized leadership in design, production quality and wholesale distribution, is making us today more competitive and more attractive as a partner for the more prestigious designer brands.
Today, our Group is benefiting from both the improvement in the macro- economic environment, particularly in the U.S., and a number of initiatives launched over the past 18 months to address developments both within and outside the Group. With respect to this, we were pleased to see how our Group was again quick in addressing developments that could have potentially affected us in the long term. Today, after turning the corner on a 2003 that was challenging for the entire sector, our Group finds itself stronger yet and better positioned than the rest of the sector to take advantage of improvements in the markets. As a result, by the end of the current quarter we could revise upwards our previously announced projections for the full year if, in addition to the factors listed above, store traffic consolidates further and the U.S. Dollar should continue in its slow-paced strengthening.”
The Group's manufacturing/wholesale sales for the first quarter improved year-over-year by 8.1 percent to euro 298.1 million.
Manufacturing/wholesale operating income for the quarter was euro 68.0 million, reflecting an operating margin of 22.8 percent.
Mr. Del Vecchio, commenting on the results of the manufacturing/wholesale division, continued: “The results posted for the quarter by our new designer brands Versace and Prada continue to confirm our original expectations both in terms of sales and profitability. At the same time, results from the expansion of the product offering of our collections, as we did with Ray-Ban Ophthalmic, are ahead even of our own expectations, showing that house brands continue to play a fundamental role in our portfolio strategy.”
Retail sales improved year-over-year by 7.7 percent to euro 505.3 million. Same store sales for the quarter improved year-over-year by 4.4 percent(2).
Retail operating income for the first quarter rose by 17.9 percent to euro 64.0 million, resulting in an operating margin of 12.7 percent, compared with operating margin of 11.6 percent for the comparable quarter last year.
Mr. Del Vecchio concluded: “We are pleased with the performance of our retail division for the first quarter. Same store sales for the period were up for both LensCrafters and Sunglass Hut International, with Sunglass Hut's figures being slightly higher. This was mainly attributable to two factors: the recovery in the macro-economic environment, especially in the U.S., and improved marketing efforts.
Sales and productivity improvements were the main drivers of the rise in operating profitability at our retail operations, reflecting ongoing efforts to streamline in-store service processes, especially at LensCrafters, as well as overall solid cost control, which is and will continue to be our main focus Group-wide.”
LUXOTTICA GROUP
CONSOLIDATED FINANCIAL HIGHLIGHTS
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2004, AND MARCH 31, 2003KEY FIGURES IN THOUSANDS OF EURO (4)
1Q04 1Q03 % ChangeNET SALES 760,397 704,547 7.9%
NET INCOME 71,175 65,614 8.5%
EARNINGS PER SHARE (ADS) (2) 0.16 0.15
FULLY DILUTED EARNINGS PER SHARE
(ADS) (3) 0.16 0.15KEY FIGURES IN THOUSANDS OF U.S. DOLLARS (1)(4)
1Q04 1Q03 % ChangeNET SALES 950,268 755,979 25.7%
NET INCOME 88,948 70,404 26.3%
EARNINGS PER SHARE (ADS) (2) 0.20 0.16
FULLY DILUTED EARNINGS PER SHARE
(ADS) (3) 0.20 0.16LUXOTTICA GROUP
CONSOLIDATED INCOME STATEMENT
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2004, AND MARCH 31, 2003In thousands of Euro (1) 1Q04 1Q03 % Change
NET SALES 760,397 704,547 7.9%
COST OF SALES (236,147) (208,016)
GROSS PROFIT 524,250 496,531 5.6%
OPERATING EXPENSES:
SELLING EXPENSES (262,839) (249,355)
ROYALTIES (13,475) (14,951)
ADVERTISING EXPENSES (47,088) (50,822)
GENERAL AND ADMINISTRATIVE EXPENSES (70,127) (61,069)
TRADEMARK AMORTIZATION (10,611) (8,982)
TOTAL (404,140) (385,179)
OPERATING INCOME 120,110 111,351 7.9%
OTHER INCOME (EXPENSE):
INTEREST EXPENSES (12,082) (11,808)
INTEREST INCOME 1,370 897
OTHER - NET 4,362 (4,587)
OTHER INCOME (EXPENSES) NET (6,351) (15,498)
INCOME BEFORE PROVISION FOR
INCOME TAXES 113,759 95,853 18.7%
PROVISION FOR INCOME TAXES (39,870) (28,761)
INCOME BEFORE MINORITY INTEREST ININCOME OF CONSOLIDATED
SUBSIDIARIES 73,889 67,092
MINORITY INTEREST IN INCOME
OF CONSOLIDATED SUBSIDIARIES (2,714) (1,478)
NET INCOME 71,175 65,614 8.5%
EARNINGS PER SHARE (ADS) (1) 0.16 0.15
FULLY DILUTED EARNINGS PER SHARE
(ADS) (1) 0.16 0.15WEIGHTED AVERAGE NUMBER
OF OUTSTANDING SHARES 448,083,878 450,957,163
FULLY DILUTED AVERAGE NUMBER OF
SHARES 450,048,038 452,104,290LUXOTTICA GROUP
CONSOLIDATED FINANCIAL HIGHLIGHTS
FOR THE THREE-MONTH PERIODS ENDED
MARCH 31, 2004, AND MARCH 31, 2003
- SEGMENTAL INFORMATION -In thousands Manufacturing Retail Retail Inter- Consoli-
of Euro and (in thousands Segments dated
Wholesale of U.S. Trans-
Dollars) actions
and Corp-
orate Adj.2004
Net Sales 298,062 505,276 631,443 (42,941) 760,397
EBITDA 80,232 81,354 101,668 (6,174) 155,412
% of sales 26.9% 16.1% 20.4%
Operating income 68,002 64,008 79,991 (11,900) 120,110
% of sales 22.8% 12.7% 15.8%
Capital Expenditure 4,167 8,790 10,985 -- 12,957
Depreciation &
Amortization 12,230 17,346 21,677 5,727 35,302
Assets 1,559,702 892,679 1,097,281 1,530,653 3,983,0342003 As reported
Net Sales 275,660 469,155 503,403 (40,268) 704,547
EBITDA 75,555 71,276 76,479 (2,407) 144,424
% of sales 27.4% 15.2% 20.5%
Operating income 64,373 54,307 58,271 (7,328) 111,351
% of sales 23.4% 11.6% 15.8%
Capital Expenditure 2,870 7,539 8,090 -- 10,409
Depreciation &
Amortization 11,182 16,970 18,208 4,921 33,073
Assets 1,557,570 835,878 911,107 1,304,017 3,697,4652003 As adjusted (1)
Net Sales 275,660 543,509 583,186 (40,560) 778,609
EBITDA 75,555 80,840 86,741 (2,407) 153,988
% of sales 27.4% 14.9% 19.8%
Operating income 64,373 60,684 65,113 (8,690) 116,366
% of sales 23.4% 11.2% 14.9%
Depreciation &
Amortization 11,182 20,156 21,628 6,283 37,622LUXOTTICA GROUP
NON-GAAP COMPARISON OF CONSOLIDATED FINANCIAL HIGHLIGHTS
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2004, AND MARCH 31, 2003,
ASSUMING UNCHANGED EXCHANGE RATES
Adjustment
1Q 2003 1Q 2004 for
U.S. U.S. constant 1Q 2004
GAAP GAAP exchange adjusted
Euro million results results rates resultsConsolidated net sales 704.5 760.4 65.6 826.0
Manufacturing/wholesale net sales 275.7 298.1 12.8 310.9
Retail net sales 469.2 505.3 58.4 563.7
