Luxottica Group S.p.A. announced consolidated net sales for the quarter ended December 31, 2002 declined by 7.7 percent to EUR 668.6 million. Assuming constant exchange rates,
consolidated net sales for the quarter would have risen
year-over-year by 2.1 percent.
Consolidated operating income for the quarter rose year-over-year by
10.9 percent to EUR 114.4 million. Consequently, consolidated
operating margin for the quarter improved year-over-year to 17.1
percent.
Consolidated net income for the quarter rose year-over-year by
22.3 percent to EUR 74.4 million. Consequently, consolidated net
margin for the quarter improved year-over-year to 11.1 percent, from
8.4 percent.
Earnings per American Depositary Share (ADS) (one ADS represents one
ordinary share) for the quarter were up year-over-year by 21.7
percent to EUR 0.16. In U.S. dollars, earnings per ADS (EPADS) for
the quarter were US$0.16, reflecting a year-over-year increase of
35.6 percent.
Consolidated net sales for the year rose year-over-year by 2.2
percent to EUR 3,132.2 million. Assuming constant exchange rates,
consolidated net sales for fiscal year 2002 would have risen year-
over-year by 7.5 percent.
For the year, the Group sold in excess of 33 million frames,
representing a 4.5 percent year-over-year improvement from fiscal
year 2001.
Consolidated operating income for the year rose by 18.1 percent to
EUR 601.5 million. Consolidated operating margin for the year
improved to 19.2 percent, from 16.6 percent for fiscal year 2001.
Consolidated net income for fiscal year 2002 rose by 17.6 percent to
EUR 372.1 million. Consequently, consolidated net margin for the
year improved to 11.9 percent, from 10.3 percent for fiscal year
2001.
EPS for the fiscal year 2002 rose year-over-year by 17.1 percent to
EUR 0.82. In U.S. dollars, EPADS for the same period rose year-over-
year by 23.5 percent to US$0.78.
Consolidated net outstanding debt on December 31, 2002, improved
over the twelve-month period by EUR 215.6 million to
EUR 1,254.3 million, from consolidated net outstanding debt of
EUR 1,469.9 million on December 31, 2001. Consolidated net
outstanding debt on September 30, 2002, was EUR 1,292.8 million.
Manufacturing/Wholesale Division
The Group’s manufacturing/wholesale sales for fiscal year 2002 declined year-over-year by 1.6 percent to EUR 1,128.7 million. Assuming constant exchange rates, manufacturing/wholesale sales for the fiscal year 2002 would have risen year-over-year by 2.2 percent.
Manufacturing/wholesale operating income for fiscal year 2002 was flat year-over-year at EUR 287.6 million. This was mostly due to the negative effect on the Group’s results of the strengthening of the Euro against other currencies.
Leonardo Del Vecchio, Chairman of Luxottica Group, commented on the results of the manufacturing/wholesale division: “The performance of the division was indeed positive. In fact, in line with the trend of the first nine months of the year, sales to third parties for the fourth quarter rose year-over-year by 8.6 percent, and by 6.7 percent for the full year, both assuming constant exchange rates.”
“This result, achieved in increasingly competitive markets, allowed us to further expand our market share worldwide, particularly in Europe, where growth for the year was in excess of 10 percent.”
Retail Division
Group’s retail results for the fourth quarter included results for both LensCrafters and Sunglass Hut International, as they are run as a single division of the Group. Results of the Sunglass Hut International operations were consolidated into the Group’s results as of March 31, 2001.
Retail sales for the fourth quarter were nearly flat year-over-year at US$464.1 million. Same stores sales for the quarter declined year-over-year by 1.5 percent.
For the year, retail sales rose year-over-year by 8.1 percent to US$2,039.6, while same store sales for the same period declined year-over-year by 0.6 percent.
Retail operating income for fiscal year rose by 5.5 percent to US$301.9 million, from US$286.1 million for fiscal year 2001. Consequently, retail operating margin for fiscal year was 14.8 percent.
Mr. Del Vecchio continued: “On the retail front, sales for the fourth quarter were below our expectations. Results were negatively affected by the continued decline in traffic in malls experienced throughout 2002, as well as disappointing Christmas season sales, which were below the level of the previous year.”
Mr. Del Vecchio concluded: “The year 2002 was particularly difficult for the global economy, as it continued to suffer from the impact of the terrorist attacks of the previous year, extreme volatility in the financial markets, a weak dollar, and fear of war in Iraq. This resulted in a slowdown in consumption and, consequently, in the growth rate of sales of our Group. Within this environment we were still able to improve profitability, thanks to management’s continued focus on cost control.”
“Although there are signs of slight improvement in the U.S., unfortunately it is impossible to predict the timing of economic recovery because of the many uncertainties in connection with the difficult international situation.”
“In North America, we are currently in the process of consolidating logistics of our retail operations at our Atlanta distribution center, which was formerly used only for Sunglass Hut International. This will result in the closing of the LensCrafters distribution center in Cincinnati. Additionally, in 2003 we will continue to expand our distribution network, also through acquisitions, as this is a strategy that has allowed us to increasingly strengthen our leadership position.”
“As a result of the current uncertain economic scenario and weakness in the U.S. dollar, 2003 will be a year of transition for us, during which we expect to focus on pursuing interesting acquisition opportunities mainly in retail. Consequently, we expect to return to growth in sales and earnings in 2004.”
“We confirm our previously announced expectations to post earnings per share (EPS) for fiscal year 2003 of Euro 0.77, or EPADS of US$0.77, assuming parity in the Euro/U.S. Dollars exchange rate. If the exchange rate should go to EUR 1.00 = US$1.10, EPADS would be US$0.76, or EUR 0.69.”
KEY FIGURES IN THOUSAND OF EURO(4)
2002(5) 2001 % Change
NET SALES 668,585 724,161 -7.7%
NET INCOME 74,353 60,803 22.3%
KEY FIGURES IN THOUSAND OF U.S. DOLLARS(1)(4)
2002(5) 2001 % Change
NET SALES 667,377 648,761 2.9%
NET INCOME 74,218 54,473 36.2%
CONSOLIDATED FINANCIAL HIGHLIGHTS
FOR THE YEAR ENDED
DECEMBER 31, 2002 AND DECEMBER 31, 2001
KEY FIGURES IN THOUSAND OF EURO(4)
2002(5) 2001(5) % Change
NET SALES 3,132,201 3,064,907 2.2%
NET INCOME 372,077 316,373 17.6%
KEY FIGURES IN THOUSAND OF U.S. DOLLARS (1)(4)
2002(5) 2001(5) % Change
NET SALES 2,959,930 2,745,237 7.8%
NET INCOME 351,613 283,375 24.1%
CONSOLIDATED INCOME STATEMENT
FOR THE THREE-MONTH PERIOD ENDED
DECEMBER 31, 2002 AND DECEMBER 31, 2001
In thousand of Euro(1) 2002(2) 2001(3) % Change
NET SALES 668,585 724,161 -7.7%
COST OF SALES (189,955) (207,178)
GROSS PROFIT 478,631 516,983 -7.4%
OPERATING EXPENSES:
SELLING EXPENSES (248,112) (272,666)
ROYALTIES (12,746) (11,491)
ADVERTISING EXPENSES (36,010) (44,339)
GENERAL AND ADMINISTRATIVE EXPENSES (58,690) (59,862)
TRADEMARK AMORTIZATION (8,707) (25,467)
TOTAL (364,265) (413,825)
OPERATING INCOME 114,366 103,158 10.9%
OTHER INCOME (EXPENSE):
INTEREST EXPENSES (12,260) (22,979)
INTEREST INCOME 1,390 3,694
OTHER - NET 6,045 (2,795)
OTHER INCOME (EXPENSES) NET (4,824) (22,081)
INCOME BEFORE PROVISION FOR
INCOME TAXES 109,541 81,076 35.1%
PROVISION FOR INCOME TAXES (33,726) (22,585)
INCOME BEFORE MINORITY INTEREST IN
INCOME OF CONSOLIDATED SUBSIDIARIES 75,816 58,491
MINORITY INTEREST IN INCOME OF
CONSOLIDATED SUBSIDIARIES (1,463) 2,313
NET INCOME 74,353 60,803 22.3%
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED
DECEMBER 31, 2002 AND DECEMBER 31, 2001
In thousand of Euro(1) 2002(2) 2001(2)(3) % Change
NET SALES 3,132,201 3,064,907 2.2%
COST OF SALES (878,003) (883,961)
GROSS PROFIT 2,254,198 2,180,946 3.4%
OPERATING EXPENSES:
SELLING EXPENSES (1,078,964) (1,034,218)
ROYALTIES (62,274) (54,556)
ADVERTISING EXPENSES (213,910) (213,610)
GENERAL AND ADMINISTRATIVE EXPENSES (261,477) (274,873)
TRADEMARK AMORTIZATION (36,065) (94,198)
TOTAL (1,652,690) (1,671,454)
OPERATING INCOME 601,508 509,492 18.1%
OTHER INCOME (EXPENSE):
INTEREST EXPENSES (65,935) (91,978)
INTEREST INCOME 5,036 15,060
OTHER - NET (1,168) 8,737
OTHER INCOME (EXPENSES) NET (62,066) (68,181)
INCOME BEFORE PROVISION FOR
INCOME TAXES 539,442 441,311 22.2%
PROVISION FOR INCOME TAXES (162,695) (123,450)
INCOME BEFORE MINORITY INTEREST IN
INCOME OF CONSOLIDATED
SUBSIDIARIES 376,746 317,861
MINORITY INTEREST IN INCOME
OF CONSOLIDATED SUBSIDIARIES (4,669) (1,488)
NET INCOME 372,077 316,373 17.6%
