Luxottica: consolidated operating income up 20.1 percent in 3Q
Luxottica Group has announced consolidated U.S. GAAP results for the three- and nine-month periods ended September 30, 2005.
Financial highlights of third Quarter:- Consolidated sales € 1,069.4 million (+47.3%); retail sales € 849.0 million (+55.2%); retail comparable store sales +5.3%; total wholesale sales € 283.7 million (+26.0%);
- Consolidated operating income € 154.9 million (+20.1%); operating margin 14.5%; retail operating income € 106.3 million (+15.1%); retail operating margin 12.5%; wholesale operating income € 63.3 million (+34.0%); wholesale operating margin 22.3%;
Nine-month period highlights:
- Consolidated sales € 3,251.9 million (+41.0%); retail sales € 2,448.6 million (+52.1%); retail comparable store sales +5.7%; total wholesale sales € 978.9 million (+17.0%);
- Consolidated operating income € 457.1 million (+17.7%); operating margin 14.1%; retail operating income € 283.4 million (+20.1%); retail operating margin 11.6%; wholesale operating income € 231.3 million (+23.2%); wholesale operating margin 23.6%;
- Consolidated net income € 256.7 million (+13.0%); net margin 7.9%;
- Earnings per share € 0.57 (US$ 0.72 per Ads).
Andrea Guerra, chief executive officer of Luxottica Group, commented: 'Results for the third quarter were again strong across our entire business and in all key markets, with both retail and wholesale contributing to continued growth. Cash flow generation was again one of the main highlights of our Group's results for the quarter, with approximately € 140 million excluding non-recurring items. At the same time, in the first nine months of 2005 we reached the same level of sales posted in 2004 for the full year, which in itself means that the Cole National acquisition has already helped us to achieve a significant result. Regarding the retail business, the integration of Cole National is now nearly completed and the Group's retail team in North America is already focusing on the challenges ahead: the growth of the Pearle Vision business and the ongoing repositioning of Sunglass Hut as the destination store for fashion in sun'.
Results of the retail division for the third quarter were particularly strong, especially in North America where Sunglass Hut experienced double-digit comparable store sales growth for the second quarter in a row. Retail results were also positive in Asia-Pacific, especially in terms of profitability.
For the third quarter, the Group's wholesale business experienced significant additional growth and improved profitability. Wholesale sales to third parties rose by 23.0 percent, reflecting accelerated growth in the Group's wholesale business year-to-date compared with 13.0 percent for the first half of the year. Operating margin for the entire wholesale division for the quarter improved to 22.3%, up by 130 bps year-over-year. The performance of the wholesale business reflected the strength of Luxottica Group's brands portfolio, especially of Ray-Ban, which posted particularly strong results for the quarter.
In wholesale, the Group just launched the first Dolce & Gabbana collections and expects a strong first year, in line with the original projection of € 120 million in sales.
