Led by Optical Growth, Luxottica Continues Solid Increases in Q1 2013

By

Luxottica CEO Andrea Guerra.
MILAN—Citing success in the optical sector and estimations that “there will be around an extra half a billion people wearing glasses in the next 10 years,” according to Andrea Guerra, CEO, Luxottica Group S.p.A (MTA: LUX; NYSE: LUX), released its Q1 2013 financial results on April 29 showing solid increases. The company saw “robust and continuous double-digit growth in their optical business in the first quarter of the year becoming one of the group’s businesses with the greatest potential for growth,” the company said.

Total sales for the first quarter ended March 31, 2013 in the Wholesale Division rose to €781 million from €727 million in same period of 2012, up 7.5 percent. Sales performance for the Wholesale Division in Luxottica’s primary geographic markets saw markedly positive results in emerging markets, North America and continental Europe, especially in France, Germany and the Nordic countries.

“Our brand portfolio is in excellent shape and it is expanding. Ray-Ban and Oakley continued to perform extremely well, retaining their titles as captains in the industry,” said Guerra. “During the first quarter 2013, in the premium and luxury segment, the licensing agreement with Armani Group became operational and we completed the merger with the iconic Alain Mikli brand, enriching the newly created Atelier Division.”

Net sales were €1.86 billion, up 4.2 percent from €1.79 billion in the same period 2012, with double-digit growth in emerging markets. Net income for the first quarter of 2013 increased to €159 million, an increase of 10.5 percent from the adjusted net income of €144 million reported in the first quarter of 2012. The adjusted income for the first quarter of 2012 does not include restructuring costs related to the reorganization of the Australian retail business. Net debt as of March 31, 2013 was €1.82 million as compared to €1.66 million Dec. 31, 2012.

“The first quarter has marked a strong, solid start to the year, sustained by all of our leading brands in all the geographic areas important to our company,” added Guerra. “The positive results in the first quarter of 2013 confirmed our expectations for the period and provide a strong basis for another year of growth. We have managed to improve on our record profits and net sales by focusing on the group’s unique and specific assets and continuing to invest in high-potential, fast-growing markets.”

Net sales for the Retail Division were €1,083 million up from €1,061 million in the first quarter of 2012, or an increase of 2 percent. “The Retail Division in North America experienced a solid start to the year, despite the fact that the month of February was slow in terms of traffic, the division resumed its positive growth trend in March and this trend has continued into April,” continued Guerra.

LensCrafters, which the company noted is celebrating its 30th anniversary this year, saw an increase of 3.6 percent in comparable store sales over the same period last year. Sunglass Hut specifically saw an increase of 5.5 percent, for an increase of 10 percent over the past three years. Comparable store sales reflect only stores open in the more recent period that also were open during the comparable prior period. As of the second quarter of 2012, retail comparable store sales exclude Pearle Vision results which are separately reported.

“Looking forward to the next few months, we will continue to invest in our expansion. In particular, the emerging markets are expected to be one of the main drivers of growth, sustained by ongoing investments in people and brands, and by expanding the Retail Division via acquisitions and better penetration of existing channels, especially in Southeast Asia and Latin America,” he concluded.

Additionally, the company announced the establishment of a €2 billion “Euro Medium Term Note Programme” pursuant to which Luxottica Group S.p.A. may from time to time offer notes to institutional investors in certain jurisdictions (excluding the U.S.). The notes issued under this program are expected to be listed on the Luxembourg Stock Exchange.