Luxottica reports modest 1.2 percent rise in third-quarter revenues
Italian eyewear giant Luxottica reported a 1.2 percent rise in underlying third-quarter revenues on Monday and said it was on track to hit its full-year target while sounding a cautious note over expectations for a further rise in profits next year.
Luxottica said sales adjusted for an accounting change rose to 2.225 billion euros ($2.4 billion) in the third quarter, in line with forecasts, as good weather boosted sales of sunglasses at opticians across Europe and at the group’s own Sunglass Hut shop chain.
A 4 percent rise in retail sales more than offset a drop in wholesale revenues caused by a reorganization under the guidance of 81-year-old founder and top shareholder Leonardo Del Vecchio, who returned to the helm two years ago as executive chairman.
“We’re confident we will close the year as expected,” Chief Executive Massimo Vian told Reuters. He added the group was working to put a number on the rate of growth expected next year.
Despite stepping up investments to expand its retail network, Luxottica halved its forecast for full-year sales growth in July to 2-3 percent at constant currencies. That compares with a 1.5 percent rise in sales for the first nine months.
The group sees its operating profit rising in line with sales this year.
Back in March, when it had set its original forecast for 2016 results Luxottica had predicted a mid to high single-digit rise in 2017 sales and profit growth of more than 1.5 times that of revenues.
“Profits will definitely rise faster than sales (next year). To understand just how fast and when we’ll get there you need to give us time,” Vian said.
He said the group was monitoring closely the impact of a new policy introduced in the United States to limit online discounts for Ray Ban glasses. The move cost the group 60 percent of its sales to online retailers in its biggest market in the third quarter.
Vian said Luxottica was also working to counter the effect on its LensCrafters optical chain of weaker U.S. consumer spending.
Luxottica also lost business in China following a decision to cut some independent distributors and deal directly with retailers.
In a positive development as the group works to boost its online business, Luxottica said direct online sales rose 18 percent at constant currencies in July-September.