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Luxottica Posts Record Q2 Earnings, Confirms Guidance

Luxottica Group SpA, the world’s largest eyewear maker, reported record second-quarter revenue and earnings, boosted by growth in emerging markets.
By
  • Bloomberg

MILAN, Italy — Luxottica Group SpA, the world's largest eyewear maker, reported record second-quarter revenue and earnings, boosted by growth in emerging markets.

Adjusted net income rose 34 percent to 314 million euros ($349 million), the Milan-based company said Monday after European markets closed. Analysts predicted 308 million euros, according to the average of five estimates compiled by Bloomberg.

Second-quarter sales at the company founded by billionaire Leonardo Del Vecchio rose 19 percent to 2.46 billion euros. Luxottica cited “high demand” for eyewear collections, particularly in China, Southeast Asia, Brazil and Mexico.

“We look at the second half with confidence,” co-chief executive officers Adil Mehboob-Khan and Massimo Vian said in a statement. Luxottica confirmed its full-year forecasts for profitability to grow at twice the pace of sales.

“The results of the first seven months of 2015, including July, came in strong and benefited from a good sun season,” the two co-CEOs said in the statement.

Mehboob-Khan said the company “didn’t feel any impact on the business” from the recent turmoil on the Chinese financial markets. Sales in China rose 48 percent at current exchange rates in the second quarter. Luxottica has lowered retail prices in the Asian nation.

The company has about 1 billion euros of cash available for acquisitions, Mehboob-Khan said. “We continue to scan for market opportunities, particularly in emerging markets,” he said. “We can afford to do that judiciously.” There currently are no talks with France’s Essilor. “We had conversations with them in the past, but we didn’t find any common ground. I don’t see anything happening.”

Luxottica said it’s deploying a “global price harmonization program in order to address price differentials that exist among markets, in particular in Asia when compared to Europe.”

The integration of the company’s Oakley unit is targeted for completion by the end of the year and is expected to generate synergies of about 100 million euros when concluded, Luxottica said.

By Dan Liefgreen; editors: Vidya Root, Paul Jarvis.

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