Luxottica Profit Increases 24% on Burberry Glasses (Update3) By Sara Gay Forden
April 24 (Bloomberg) -- Luxottica Group SpA, the world's biggest maker of eyeglasses, said first-quarter profit advanced 24 percent as shoppers bought newly introduced glasses carrying Burberry Group Plc's brand.
Net income rose to 128.3 million euros ($174 million) from 103.2 million euros a year earlier, the Milan-based company said today in a statement. That beat the 120.3 million-euro median estimate of five analysts Bloomberg News surveyed by e-mail. Sales gained 6.7 percent to 1.3 billion euros.
Luxottica, the maker of Ray-Ban sunglasses, began selling glasses under the Burberry name in October. The company also runs about 5,500 optical shops around the world and is making acquisitions and opening LensCrafters stores in China and Sunglass Hut outlets in South Africa to add retail muscle.
``Our business is performing well in all segments and in all markets,'' Chief Executive Officer Andrea Guerra said in a telephone interview. The second quarter has started ``well'' and is in line with the first quarter, according to Guerra, who said he may revise full-year targets after seeing how the company performs in April and May.
Today, the company said its March 6 full-year earnings forecast will be toward the higher end of the range. Luxottica previously forecast per-share earnings will increase as much as 18 percent this year. Analysts including Peter Farren at Bryan, Garnier & Co. already have estimates above that level.
Luxottica shares rose 31 cents, or 1.3 percent, to 24.91 euros in Milan. They have gained 7 percent this year as stock in main competitor Safilo SpA, the operator of Solstice Sunglass Boutique stores, has dropped 3 percent.
Excluding Things Remembered Inc., a U.S. gift-ship chain sold in September because it lay outside Luxottica's main business, net income rose 20 percent, Luxottica said.
Retail sales fell 1.6 percent to 833.6 million euros, while sales at stores open at least a year climbed 1.6 percent. Wholesale sales, or sales to third-party distributors, rose 20 percent to 548.5 million euros.
``I expect accelerating retail and wholesale sales as the year goes on,'' Farren wrote in a note today. ``Margins at the retail division should expand strongly also into the year.'' Farren has a ``buy'' rating on the stock.
Luxottica is spending about 225 million euros on stores this year, focusing on LensCrafters and its Sunglass Hut chain, for projects that include remodeling 480 outlets. About three- fifths of Sunglass Hut shops should be new or recently revamped by the end of 2007, the glasses maker said in January.
Guerra said about 40 LensCrafters stores will be remodeled in the second quarter, speaking on a conference call after the results report.
The company signed a 10-year agreement with Burberry in October 2005 and started selling glasses bearing the brand of Polo Ralph Lauren Corp. in the first quarter. Guerra expects sales of Ralph Lauren glasses to total about 100 million euros this year. Luxottica expects to introduce glasses under Tiffany & Co.'s brand the end of this year or in early 2008, Guerra said.
Guerra said he plans to acquire more optical chains this year. Acquisitions will probably be more than the six or seven purchased last year and will be bigger in size, he said.
The Italian company agreed in March to buy two South African retailers, adding 65 shops to its network.
To contact the reporter on this story: Sara Gay Forden in Milan at firstname.lastname@example.org .
I would like to simply ask one question and that is there any Sears Optical Doctors or Managers on this message board any more?? If so give us some feed back on how it is going for you after this first fiscal quarter. Still in the payroll crunch, still getting the rundown by your regional how EZ Clear is our way to fame for this year so her fat ass looks great with the company even though she never fricken returns your calls when you have a major problem? I sure hope this core family is still in tack as Lux wants EVERYONE to believe!!
I work for a Sears location as an Assist. Mgr. I have worked for the company for years and came with the transfer from cole. Yes the payroll change has been difficult to adjust to. But it is what it is. If I was the owner of the company, no I wouldn't want to be paying 5 people to do the job that 2 people can successfully do. Yes there are times that it gets extremely stressful. We don't have other people to help answer the phones, frame stylist, vision care associates or anything else like that. We do it all...that being said, I am a employee of a company, not the owner. I make the schedule in my department. I do hours at the minimum to support our store hours. If we are busier I don't add to it. That helps us stay even for the weeks that we are running high on payroll. The busier we are the more commission we make. That may sound greedy but "it is what it is". Maybe other dept's have a hard time because the mgr's fail to delegate jobs to other associates. We have a great team in our store. The doctor is a huge part of our success and is always willing to help out when we are busy in the front. If you want to succeed become a team player....All of the regionals are just doing their job also. They too are not the owners of the company, merely employees being told what to do. Too bad you feel so sore at your regional mgr. She is being held accountable in her position, just as a mgr of a location is being held accountable...As for EZ clear, I think it's great. I love cleaning it, have no issues, and haven't had any patient issues with it.
You are one bitter person. What happened did Lux ask you to pick up the pace and actually work, or were you a disgruntled Cole Dr. also? I think I rememember you saying you did not renew your lease, therfore you should have no reason not to go and recruit some of those other great employees that are being wronged by the Lux monster and start your own world class facility. I'm not saying Lux doesn't make mistakes but quit beating the payroll and EZ clear horse to death. If these are there major blunders then they are doing better than cole ever did.