Luxottica: results for second quarter and half year
Luxottica Group have announced consolidated U.S. GAAP results for the three- and six-month periods ended June 30, 2005.
Financial highlights for second quarter of 2005:
- Consolidated sales € 1,145.6 million (+41.1%, +45.0% assuming constant exchange rates; Retail sales € 842.9 million (+53.4%); Retail comparable store sales +8.3%; Total wholesale sales € 368.3 million (+17.6%);
- Consolidated operating income € 165.7 million (+19.1%); Operating margin 14.5%; Retail operating income € 100.6 million (+26.6%); Retail operating margin 11.9%; Wholesale operating income € 90.3 million (+24.6%); Wholesale operating margin 24.5%;
Financial highlights for Six-Month Period:
- Consolidated sales € 2,182.6 million (+38.1%, +42.5% assuming constant exchange rates; Retail sales € 1,599.6 million (+50.5%); Retail comparable store sales +5.9%; Total wholesale sales € 695.2 million (+13.6%);
- Consolidated operating income € 302.2 million (+16.6%); Operating margin 13.8%; Retail operating income € 177.1 million (+23.4%); Retail operating margin 11.1%; Wholesale operating income € 168.0 million (+19.6%); Wholesale operating margin 24.2%;
- Consolidated net income € 167.4 million (+11.5%); Net margin 7.7%;
- Earnings per share € 0.37 (US$ 0.48 per ADS).
Andrea Guerra, chief executive officer of Luxottica Group, commented: 'Today we are reporting record sales results for our Group and continued progress towards the successful completion of the Cole National integration. For the quarter, we posted consolidated sales levels again well above the one billion Euro mark, in line with our forecast of between 4.0 and 4.15 billion euro for the full year. These strong results - sales for the quarter were up by over 41.1 percent, earnings per share by 14.9 percent - reflected the strength of our business and continued good performance by our entire team as we prepare for the second half of the year'.
Results of the retail division for the second quarter were particularly strong, especially in North America where the sun business experienced significant comparable store growth. Retail results were strong also in Asia-Pacific, with comparable store sales growth in excess of five percent as well as improvements in terms of profitability. Within retail, the integration of the former Cole National businesses continued to proceed smoothly, with operating margin for the quarter doubling year-over-year.
For the second quarter, the Group's wholesale business experienced significant additional growth and improved profitability. Wholesale sales to third parties rose by 16.3% (by 17.0% assuming constant exchange rates), while operating margin for the entire wholesale division reached 24.5%, up 140 bps year-over-year. This significant improvement was reached despite the additional decline in the value of the U.S. currency against the Euro, by an average of nearly five percent for the quarter. Specifically, the performance of the wholesale business continued to reflect the ongoing strengthening of Luxottica Group's brand portfolio as well as improved penetration and distribution of the Group's product in several markets. Key house brands posted yet another quarter of strong results - Ray-Ban Sun above all - with over 20 percent growth rates for the quarter both in units and value. Within license brands, it is worth mentioning the performance of Bvlgari, which continued to show potential for additional growth.
Cash flow generation was again one of the main highlights of Luxottica Group results for the quarter. For the three-month period the Group generated € 135.0 million, net of currency effect and before the payment of dividends. On June 30, 2005, Luxottica Group's consolidated net outstanding debt was € 1,673.2 million.
Luxottica Group's consolidated results for the three- and six-month periods ended June 30, 2005, were approved yesterday by its Board of Directors. Consolidated results for the quarter and the first half of the year include the consolidation of the Cole National business. Luxottica Group's financial statements for the six-month period ended June 30, 2005, according to International Financial Reporting Standards (IFRS) will be approved and communicated to the market in September 2005.
