Luxottica Group lowered its guidance after reporting North American sales of Oakley sunglasses declined in the second quarter due to poor performance in the sporting goods channel.
The Italian optical giant reported North American wholesale revenues fell to €268 million in the quarter that ended June 30, down 8.4 percent from €293 million a year earlier, or down 5.8 percent in currency-neutral (c-n) terms. The results reflect sales of sunglasses and prescription eyewear under Oakley, Ray-Ban and three other proprietary brands, as well as sales of dozens of licensed fashion brands to department stores and other optical retailers.
Luxottica said its decision to introduce MAP (Minimum Advertised Price) policy across its proprietary brands and “the negative performance of the Oakley brand in the sports sector” caused wholesale revenues in North America to decline 2.5 percent (-1.6 percent c-n) in the first half.
Luxottica’s North America Retail revenues reached €1.12 billion in the quarter, down 1.2 percent (+1.1 percent c-n) from a year earlier thanks to modest same-store sales growth at LensCrafters and a rebound in same-store sales at Sunglass Hut that the company said has accelerated since the end of the quarter.
Luxottica closed the first half with North American sales of €2.74 billion, which was flat in currency-neutral terms.
Luxottica’s consolidated net sales reached €2.45 billion ($2.8 billion) in the second quarter, up 2.0 percent from the first half of 2015.
The second quarter results, along with increasing uncertainty in many markets, lead Luxottica to lower its guidance for the FY 2016. The company now expects sales, adjusted operating income and adjusted net income to grow 2 to 3 percent in currency-neutral terms and a net debt/adjusted EBITDA ratio range of 0.5x-0.4x
