Luxottica Group today cited “a stabilization” and “encouraging signs of growth” in releasing its fourth quarter and fiscal 2009 sales results, saying it expects that FY 2010 will mark a return to “normal” (in terms of sales growth, margin improvement and debt reduction) for the company’s businesses.
Luxottica’s chief executive officer, Andrea Guerra said, “Luxottica believes that the overall scenario seems to have stabilized by now. Measures taken during the course of last year will take full effect in 2010, a year in which the group expects to see a return to growth, a key element of its DNA. With respect to this, the first signs in the New Year were encouraging.
“The group’s performance in North America should be noted,” Guerra added, “as this is a market of paramount importance for Luxottica.” He said that “following several quarters of hard work, for the fourth quarter both divisions [retail and wholesale] were back to growth, laying the groundwork for further improvement in the business.”
For Q4, Luxottica reported consolidated sales of €1,157.1 million vs. €1,236.5 million for the same period 2008, a change of -6.4 percent (down 1.1 percent at constant exchange rates). Consolidated sales for the fourth quarter when adjusted for the additional week of sales, were €1,149.4 million (up 2.1 percent at constant exchange rates). In particular, the company noted that for November and December 2009, consolidated sales were up by 4.7 percent over the same period the previous year, at constant exchange rates and adjusting for an additional week of sales. The signs of recovery seen in the third quarter in several geographies, including Western Europe and the U.S., were reaffirmed in the fourth quarter.
In Luxottica’s wholesale division, Q4 sales were in line with those of the previous year, which the company said “reflects stabilization in many markets, successful commercial measures and continuing strong performance by brands like Ray-Ban and Oakley.” Sales for the quarter were €448.9 million, flat at constant exchange rates (down 2.4 percent at current exchange rates).
The fourth quarter also saw an improvement in comparable store sales by Luxottica Retail in North America, up by 0.9 percent and up by 2.9 percent in November-December alone. The company added that “this was followed by encouraging signs in the first weeks of 2010.” In terms of comparable store sales, the “optical prescription” business in North America rose 1.6 percent, which represents positive results for the first time in eight quarters, with a small but significant improvement by LensCrafters, specifically up by 0.1 percent for the quarter and 2.6 percent in the November-December period, with positive performances across all States. Sears Optical and Target Optical showed particularly positive results, up 11 percent for the quarter.
Sunglass Hut posted comparable store sales for the quarter in line with the previous year, with continuous improvement in North America, up 1.3 percent in the November-December period.
For the full year 2009, consolidated sales remained over the €5 billion mark, at €5,094.3 million versus €5,201.6 million for 2008, or a decrease of 2.1 percent. Adjusted for the additional week of sales, consolidated sales for the full year 2009 were €5,086.7 million, representing a 1.3 percent decline over full year 2008. The wholesale division posted full-year sales of €1,955.3 million, down 6.6 percent at current exchange rates (down 6.8 percent at constant exchange rates).
“Fiscal 2009 was a particularly demanding year and in many ways ‘unique’ in the history of our group,” added Guerra. “The world around us underwent a structural re-adjustment, especially in the first half of the year, followed by stabilization and signs of recovery in the second half. In this scenario, Luxottica nevertheless produced solid results, with consolidated sales comfortably above €5 billion and substantially in line with the previous year. These results, which were helped in a meaningful way by the double-digit growth seen by the Ray-Ban and Oakley brands, confirmed the strength of Luxottica’s business model.”
In 2010, the company expects positive performance in Europe, the U.S. and especially in emerging markets. Initiatives are already underway, a statement said, to boost margins in both divisions, particularly wholesale. “There will continue to be a sharp focus on new business development opportunities and investments in systems and infrastructure with the potential to generate further benefits,” a statement said.
Luxottica’s full results for fiscal year 2009 are expected to be approved by the board of directors on March 1, followed by an investor presentation to review the results on March 2. The presentation will be available through a live webcast at www.luxottica.com.