Italy Glasses Giant Luxottica Announces Last Quarter Financial Data

Italy

Luxottica released its financial data for the first quarter of fiscal year 2017 last Friday, with its strong growth in the European market and the excellent performance of the Ray Ban brand, the sales volume reached 2 billion 380 million euros, up 5.2% over the same period last year.

In this quarter, the key financial data of Luxottica are as follows:

Sales of 2 billion 380 million euros, an increase of 5.2% over the same period, with an increase of 1.9% at the constant exchange rate.

Wholesale channel sales of 935 million euros, an increase of 2.5% over the same period, unchanged at the same rate last year.

Retail sales rose 1 billion 331 million euros, an increase of 7.1% over the same period, and increased by 3.3% at a constant exchange rate.

Online channel sales increased by 6% over the same period last year.

The online sales growth of Ray Ban brand has reached two digits.

In recent quarters, Luxottica has adopted the "advertising cost minimization" strategy to reduce the price discrepancy among different regions by adjusting the pricing of various markets, and greatly reducing the promotion expenses in stores and online.

The group also built a large logistics production center in the United States, China and Italy, and integrated the existing production and distribution networks, and stopped cooperation with several independent distributors in China.

These strategies have a certain impact on the group's current sales.

In the first quarter, comparable store sales fell by 3.5% over the same period last year, showing an increase of 1.6% over the same period last year, and an increase of 0.5% in the fourth quarter of fiscal 2016.

CFO Stefano Grassi said that the new strategy had less impact on the first quarter sales than the company expected, and is expected to improve sales in 2017.

Luxottica's performance in various markets in the first quarter is as follows:

Sales in North America stood at 1 billion 370 million euros, up 1.1% from the same period last year, down 2.5% from the constant exchange rate, accounting for 57% of total sales.

Sales in the European market stood at 517 million euros, an increase of 15.5% over the same period last year, accounting for an increase of 17.4% over the fixed exchange rate, accounting for 22% of total sales.

Sales in the Asia Pacific market stood at 307 million euros, an increase of 6% over the same period last year, accounting for an increase of 0.6% over the fixed exchange rate, accounting for 13% of total sales.

Sales in Latin America were 145 million euros, an increase of 17.6% over the same period last year, accounting for an increase of 5.5% over the fixed exchange rate, accounting for 6% of total sales.

In mainland China, although the redistribution of distribution networks has had an impact on the performance of wholesale channels, the retail channel has performed well under the impetus of the newly opened 50 Ray Ban brand stores.

In Italy, Germany, Portugal and Eastern Europe performed well, sales in Turkey also increased, helping Europe become the best performing market in the quarter.

"The performance of online sales and profit margins has increased, and we are now more competitive than before," said Leonardo Del Vecchio, executive director of Luxottica and general manager Massimo Vian.

Luxottica also reaffirmed its expectations for the 2017 fiscal year, saying sales growth was at a low to mid single digit rate.

But analysts are not satisfied with Luxottica's performance.

"This is not a very good performance, although the overall growth is in line with expectations, but this is mainly due to the opening of new stores and the acquisition of Salmoiraghi," said Luca Solca Solca, an analyst at Bank of China.

In November 2016, Luxottica acquired the remaining shares of the Salmoiraghi&Vigan family of Italy glasses retailer owned by the Tabacchi family and now owns all the shares of Salmoiraghi&Vigan.

In January of this year,

A merger agreement with Essilor, the largest optical lens company in the world, has reached a combined market value of more than 460 billion.

According to the data in 2015, the total annual sales of the two companies exceeded 15 billion euros, EBITDA (profit before interest tax depreciation and amortization) was 3 billion 500 million euros, and the number of employees exceeded 140 thousand.

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