Luxottica Reports Record First Half Results

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MILAN— Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX) announced yesterday, in a conference call with analysts, record breaking net sales of €2 billion worldwide in the second quarter ending June 30, 2013, driven by success in both their wholesale and retail divisions, despite lower than expected comp store sales performance of LensCrafters in North America.

“We are proud to announce a record second quarter and we once again achieved excellent results, exceeding the goal of €2 billion in net sales,” said Andrea Guerra, Luxottica’s CEO. “This year, we have arrived at the half-way point very satisfied. North America achieved an increase in net sales, reporting an especially robust performance in the wholesale division.”

Luxottica Group’s net sales for the second quarter increased from €1,882 million in the second quarter of 2012 to €2,018 million, an increase of 7.2 percent, while net sales for the first six months of 2013, reached €3,882 million, an increase of 5.8 percent, over €3,670 million in the first half of 2012. Adjusted net income for the second quarter of 2013 increased to €218 million, up from €194 million in the second quarter of 2012, for an increase of 12.5 percent. Adjusted net income for the first six months of 2013 was recorded at €377 million, up 11.7 percent over 2012’s €338 million.

“Our team is working with determination and passion and we are happy with the excellent quarterly results which are also due to our vertically integrated and geographically diversified business model,” stated Guerra. “In the second quarter of 2013, Luxottica achieved positive results in all of the primary geographic markets in which we are present. In recent months, all of our divisions contributed substantially to these record results.”

Net sales for Luxottica’s retail division rose to €1,138 million in the second quarter of 2013 from €1,094 million in the second quarter of 2012, up 4.0 percent; while net sales for the division rose to €2,221 million in the first half of 2013, up from €2,155 million in the first half of 2012, for an increase of 3.0 percent. Comparable store sales in the retail division’s optical segment were positive with especially strong results coming from the Asia Pacific region and excellent performance achieved in China and Australia, according to the company.

LensCrafters in North America achieved positive growth although not fully meeting expectations with comparable store sales up 1.3 percent in the second quarter of 2013 and up 2.5 percent in the first half of 2013. Sunglass Hut also contributed significantly to the retail division’s second quarter 2013 results with globally increased comparable store sales up 7.3 percent, driven by excellent double digit performance in South Africa and Brazil and robust growth in the North American (+6.5 percent), Australia and New Zealand (both +9.0 percent) regions.

“The retail division’s performance was positive in all geographic areas,” Guerra confirmed. “Sunglass Hut once more yielded excellent results. In particular, we are excited to announce the July 4, 2013 opening of the new Sunglass Hut flagship store in Times Square (New York City), which immediately set a store sales record over a 1-day period, and which aims to be the first store with eight-digit sales.”

Net sales for Luxottica’s wholesale division rose to €880 million, up 11.6 percent from 2012’s €788 million in the second quarter of 2012. For the first half, net sales were €1,661 million, an increase of 9.6 percent, over the first half of 2012 at €1,515 million. Emerging markets, North America and South East Asia were the geographic areas that yielded the strongest performance, along with Continental and Mediterranean Europe. The company cited the “ongoing success of Oakley and Ray-Ban in all markets; strong results in the premium segment; stellar performance from the recently formed Atelier Division; the successful launch of the Armani collections; and the wholesale division’s consistent ability to promote each brand’s distinctive traits” as drivers of their excellent results in the second quarter and the first half of 2013 in terms of both net sales and profitability.

“During the quarter, our brands continued their upward trend of strong and healthy development” added Guerra. “In particular, Ray-Ban and Oakley yielded excellent performance, confirming their positive dynamic trend and organic growth as well as the effectiveness of new marketing initiatives in the period. The premium and luxury segment of our portfolio performed robustly and sales of the Armani collections fully met our expectations for the period.”

After paying dividends of €274 million during the second quarter, the company’s net debt as of June 30, 2013 was €1,886 million as compared to €1,662 million at the end of 2012.