Luxottica Group S.p.A. reported consolidated sales in the second quarter of 2009 grew to €1.40 billion ($1.97 bn) from €1.35 billion ($1.89 bn) (up by 3.5% at current exchange rates, down by 3.3% at constant exchange rates).

In terms of operating performance, EBITDA for the quarter was down year-over-year by 5.9%, to €277.3 million ($389.6 mm), from €294.7 million ($414.1 mm) in 2008. EBITDA margin was 19.8% compared with 21.8% for second quarter of 2008.

Operating income for the quarter was €206.0 million ($289.4 mm), reflecting a decline by 10.5% from €230.2 million ($323.4 mm) for the same period in the previous year.

Operating margin for the same period declined to 14.7%, from 17.0% for the second quarter of 2008, during which the Wholesale Division posted particularly strong results.

Net income for the second quarter of 2009 was €115.7 million ($162.5 mm), reflecting a decline by 12.7% from €132.6 million ($186.3 mm) last year. Earnings per Share were €0.25 (35 cents) (at an average Euro/US Dollar exchange rate of approximately 1.36), which declined 12.9% over the second quarter of 2008. In Euro, the decline in EPS before trademark amortization would have been limited to 11.4%.

Thanks to tight controls over working capital, the Group enjoyed strong cash flow generation for the quarter with free cash flow reaching €260 million ($365.3 mm), an all-time high for the Group. This result, together with favorable exchange rate fluctuations, contributed to an appreciable reduction in the Group's Net Debt position at June 30, 2009, which was €2.62 billion ($3.68 bn) compared with €2.96 billion ($4.16 bn) at March 31, 2009, and €2.95 billion (at the end of 2008, thus bringing the Net Debt/EBITDA ratio down to 2.76X, from 3.1X at March 31, 2009 (2.9X at the end of 2008).

Wholesale Division

Speed and flexibility in new product launches, together with the success of the STARS program, the market's positive reception of the new collections and a substantial decline in inventory reductions by clients in many markets, enabled the Group to keep net sales at the Wholesale Division generally in line with the previous year. Net sales for the Division during the quarter were €576.3 million ($809.6 mm) from €583.4 million ($819.6 mm) for the second quarter of 2008 (down by 1.2% at current exchange rates and by 3% at constant exchange rates).

Looking at the sales performance of the Division by geography, Luxottica did well in Europe and key emerging markets, while in the United States results were positive in June. Japan, on the other hand, was negative and so were results in emerging markets affected by the decline in the tourism industry.

Operating income for the quarter was €129.8 million ($182.3 mm) (down by 12.1%, from €147.7 million ($207.5 mm) for the second quarter of 2008). Operating margin for the quarter was 22.5%, compared with 25.3% for the same quarter last year.

Luxottica also secured a ten-year extension to the license agreement with Gianni Versace SpA for the design, manufacturing and worldwide distribution of optical frames and sunglasses under the Versace and Versus eyewear brands.

Retail Division

Net sales for the quarter at the Retail Division rose to €825.3 million ($1.16 bn), from €771.1 million ($1.08 bn) in the second quarter of 2008 (up by 7.0% at current exchange rates, down by 3.4% at constant exchange rates). The Division's operating income for the quarter, on the other hand, was €115.9 million ($162.8 mm), compared with €119.6 million ($168.0 mm) for last year's second quarter (down by 3.0%). Operating margin declined to 14.0% for the quarter, from 15.5% in the same period last year.

In terms of comparable store sales, for the second quarter the optical business in North America declined by 8.5%, notwithstanding good results at Sears Optical and Target Optical (up by 2.2%). It should be noted that EyeMed's Managed Vision Care business posted excellent results, with sales up by 18.5% during the quarter. Comparable store sales in Asia-Pacific for the quarter were down by 3.4%.

Sunglass Hut, the Group's sun specialty chain that operates globally, reported overall comparable store sales for the quarter down by 9%, with performance very positive in Australia, New Zealand, South Africa and the UK but still negative in North America.

In conclusion, the Board of Directors authorized, as proposed by the Chairman of the Internal Control Committee, an increase in the number of members of said Committee to four, from three. Ivanhoe Lo Bello, currently a non-executive and independent Luxottica Group Board member, has been appointed to this additional seat.

Performance overview for the second quarter of 2009

The
performance of the Luxottica for the second quarter confirmed that the
current fiscal year saw an extremely difficult January and February,
with a stabilization of the market in the following months. The most
acute phase of global economic restructuring probably took place
between Sept. 2008 and March 2009, while today the environment is less
uncertain albeit certainly still challenging.

There are
considerable differences between geographic regions: North America is
still negative but now more stable than during the first few months of
the year; Europe is improving, thanks above all to good weather; and
key emerging markets continue to be positive overall.

Andrea
Guerra, Chief Executive Officer of Luxottica Group, commented: “We
outlined our priorities for 2009 from the very beginning: a solid
financial position and an immediate search for a new equilibrium and
efficiencies in manufacturing and distribution, while maintaining our
commitment to growth and the search for new solutions that would
support the long-term growth of Luxottica. For the quarter, two results
deserve to be mentioned above all: the improvement in sales and the
€260 million ($365.2 mm) in free cash flow. The very positive results
achieved to-date allow us to be more confident going into the second
half of the year, thanks to a less challenging scenario overall.”

These
results were made possible by Luxottica's well-balanced brand portfolio
and especially by the performance of Ray-Ban and Oakley. The two brands
posted growth in sales in both the sun and optical businesses for the
quarter but also for the trailing twelve months, which was the most
difficult portion of the global economic downturn.

The second quarter and first half results for 2009 will be presented today in a conference call with the financial community starting at 6:30 PM CET. The audio portion and related slide presentation will be available to all via live webcast at www.luxottica.com.