Luxottica Group posts solid 1q04 results
Luxottica Group yesterday announced results for the three-month period ended March 31, 2004. Consolidated net sales for the quarter improved year-over-year by 7.9 percent to € 760.4 million. Consolidated operating income for the quarter improved year-over-year by 7.9 percent to € 120.1 million. Consequently, consolidated operating margin for the quarter was 15.8 percent.
Consolidated net income for the quarter improved year-over-year by 8.5 percent to € 71.2 million. Consequently, consolidated net margin for the quarter was 9.4 percent. Earnings per share or per American Depositary Share (Ads) (one Ads represents one ordinary share) for the quarter were € 0.16. In U.S. Dollars, earnings per Ads (Epads) for the quarter were US$ 0.20.
Consolidated net outstanding debt as of March 31, 2004, was € 1,415.6 million compared with € 1,470.4 million as of December 31, 2003. This reflected an improvement of € 54.8 million, due to positive cash flow generation for the quarter.
The Group's manufacturing/wholesale sales for the first quarter improved year-over-year by 8.1 percent to € 298.1 million. Manufacturing/wholesale operating income for the quarter was € 68.0 million, reflecting an operating margin of 22.8 percent.
Mr. Del Vecchio, chairman of Luxottica Group, commenting on the results of the manufacturing/wholesale division, said: 'The results posted for the quarter by our new designer brands Versace and Prada continue to confirm our original expectations both in terms of sales and profitability. At the same time, results from the expansion of the product offering of our collections, as we did with Ray-Ban Ophthalmic, are ahead even of our own expectations, showing that house brands continue to play a fundamental role in our portfolio strategy'.
Retail sales improved year-over-year by 7.7 percent to € 505.3 million. Same store sales for the quarter improved year-over-year by 4.4 percent. Retail operating income for the first quarter rose by 17.9 percent to € 64.0 million, resulting in an operating margin of 12.7 percent, compared with operating margin of 11.6 percent for the comparable quarter last year.
Mr. Del Vecchio said: 'We are pleased with the performance of our retail division for the first quarter. Same store sales for the period were up for both LensCrafters and Sunglass Hut International, with Sunglass Hut's figures being slightly higher. This was mainly attributable to two factors: the recovery in the macro-economic environment, especially in the U.S., and improved marketing efforts. Sales and productivity improvements were the main drivers of the rise in operating profitability at our retail operations, reflecting ongoing efforts to streamline in-store service processes, especially at LensCrafters, as well as overall solid cost control, which is and will continue to be our main focus Group-wide'.
Del Vecchio, commenting on the consolidated results for the first quarter, concluded: 'Our results for the period were particularly encouraging, especially in light of the 14 percent year-over-year devaluation of the U.S. Dollar against the Euro in the period. At the same time, based on market feedback and other indicators we believe to have further strengthened our leadership even in markets that are not growing in absolute terms, but are strategic to our Group. This demonstrates the strong balance of our brand portfolio, which in 2003 grew even stronger and, thanks to our recognized leadership in design, production quality and wholesale distribution, is making us today more competitive and more attractive as a partner for the more prestigious designer brands'.
