Luxottica sees growth continuing in 2013
MILAN (Reuters) - Italy's Luxottica (MIL:LUX), the world's biggest premium eyewear maker, is working on a new licence deal and expects to match an 8 percent third-quarter rise in net profit for the next three months despite recent currency turmoil, its CEO told Reuters.
The maker of Ray Ban, Oakley and Armani branded glasses, which makes more than half of its sales in North America, posted quarterly net profit of 148 million euros ($203.79 million), beating a Thomson Reuters SmartEstimate of 142.6 million euros.
"Our performance in the third quarter was great and I have no doubt the fourth quarter will be the same," Chief Executive Andrea Guerra told Reuters in a telephone interview.
Luxottica said group net sales were affected by the weak dollar, which fell by 3.5 percent against the euro in the third quarter compared with a decline of just 1 percent in the previous three months.
Sales rose 7.4 percent at constant exchange rates to 1.8 billion euros. But at current rates, sales were flat.
"In the last two, three, four months we have seen turmoil in currencies," said Guerra. "A weaker dollar has a disproportionate impact on us."
Luxottica said it would invest in signing up new licences to make eyewear for more brands.
"Our licence portfolio is always a work in progress. We are working on a licence deal for January 2015," Guerra said, declining to give further details about the new deal.
Given the fluctuations in the foreign exchange market, the executive said the company had to price its products more carefully in certain countries.
"We have to work out where to adjust our prices, above all in emerging markets," Guerra said, saying the company had reviewed its pricing policy in September and October.
Luxottica also said it would continue to invest in distribution and sales channels, technology and in emerging markets, where Guerra saw no sign of a slowdown.
Sales in Brazil, China, India and Turkey grew over 20 percent at constant exchange rates in the third quarter.
"China has always been a secondary market for us ... and it still is, but at very high growth rates," Guerra said, adding sales in South East Asia were also beating his expectations.
Sales in Europe, which is just emerging from an economic crisis, rose 19 percent in the quarter. At home in Italy, which is still struggling with recession, sales went up 9 percent.
Meanwhile, a government standoff over public spending in Luxottica's key U.S. market weighed on the company's Oakley brand, which owns Eye Safety Systems, a provider of eyewear to the U.S. military.
Luxottica said its North American wholesale sales grew 2.3 percent in dollar terms. But discounting the Oakley military business, overall growth would have been 8.8 percent.
(Reporting by Isla Binnie; editing by David Evans)
