MILAN — Italian eyewear giant Luxottica SpA on Thursday reported record annual sales and a 20 percent jump in net income as consumers continued to buy its premium glasses and as continued investments in its portfolio and retail business paid off.
In a statement released after the close of the Milan stock exchange, the company said 2012 revenues grew by 13.9 percent on 2011 (7.5 percent at constant exchange rates), reaching 7.1 billion euros, or $9.1 billion. Net income for the period was 541.7 million euros, or $693.4 million.
Luxottica said the board will recommend paying out a cash dividend of 0.58 euro cents, or 74 cents, a share, equivalent to a total payout of some 273.5 million euros, or $350.1 million, about half of 2012 net income.
The company, based in the northeastern Italian town of Agordo, attained record free cash flow “in excess” of 700 million euros, or $896 million, following “strict control over working capital,” chief executive Andrea Guerra said.
Dollar amounts have been converted at average exchange rates for the periods to which they refer.
The company — which owns brands including Ray Ban, Oakley, Oliver Peoples and Persol and produces under license for top names including Giorgio Armani, Coach, Prada and Ralph Lauren — is positive about the current year despite the still-fragile global economy.
“The start of 2013 has been particularly positive and we are looking with confidence to the coming months,” Guerra said.
He also said the company’s strong premium positioning and retail reach — along with favorable demographic trends, especially in emerging markets — as well as the “continued evolution of accessories in the premium segment” meant that Luxottica could “look forward to the future with great optimism and determination.”
The company — the world’s largest producer of eyewear — said it expects “double-digit growth in the premium and luxury segments” in 2013, and added that the renewed partnership with Giorgio Armani, which became operational earlier this year, “represents another major step in this growth plan.”
Tight control over costs and its strong premium portfolio helped Luxottica drive operating income in 2012 to just over 1.0 billion euros, or $1.3 billion, up 22.3 percent on the previous year. The operating margin increased to 14.2 percent over the period compared with 12.2 percent in 2011.
Luxottica said it was looking to expand its retail exposure to emerging markets, with a special focus on Southeast Asia, “specifically in Indonesia and Thailand, where it plans to develop a direct presence.”
Emerging markets posted 26 percent sales growth, at constant exchange rates, last year, making them a “key contributor” to growth.
Also the company said it would continue to invest by expanding both its specialty- store chains in the optical segment, through LensCrafters and OPSM, and in the sun segment, where it is already the global leader, through Sunglass Hut.
The eyewear giant pointed to new sales channels, like department stores and travel retail outlets, as important future sales drivers, especially for sunglasses.
Looking a bit further ahead, Guerra said certain socio-economic trends were likely to play to Luxottica’s advantage, including “evolving demographic changes in the global population, overall penetration of products in both developed and emerging markets and a shift in demand towards premium and luxury brands, especially in the so-called ‘gateway and megacities’ and high-potential channels such as travel retail and department stores.”
Pointing to the still-vast possibilities in the global eyewear industry, Guerra said that over the next 10 years, “approximately 500 million additional individuals will be characterized as vision-correction wearers and a total of 4.8 billion individuals will continue to require some form of vision correction.”
For the fourth quarter, Luxottica posted net sales of 1.6 billion euros, or $2.1 billion, up 8.2 percent on the year-earlier period, and a 19 percent jump in net income to 77 million euros, or $100.1 million.
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)
@Pharrell and his wife Helen Lasichanh were among the stars that came out to celebrate @rimowa’s first pop-up concept shop. The space, which is located on Rodeo Drive in Beverly Hills, draws inspiration from airport luggage carousels and lounge areas – and features the company’s luggage and accessories. If the pop-up is successful it could pave the way for addition temporary shops throughout the world. #wwdfashion (📷: Owen Kolasinski/BFA)
@carineroitfeld celebrated @crfashionbook’s first calendar last night with a dinner party at Spring Place in Manhattan. Photographed by @stevenkleinstudio, the calendar takes on a fitness theme and features @joansmalls, @gigihadid, @danielle_herrington_ – pictured here – and more. “[Carine Roitfeld] wanted me to feel sexy and she wanted me to be myself and feel it out on my own and do what I felt was right,” said Herrington, aka Miss October. #wwdeye
@saintrecords and @virgilabloh last night at @americanexpress’ “A Night With Success Makers” event. “I always bring it back to community because without that I wouldn’t have the courage,” said Knowles when asked how she has gotten where she is now. Read more highlights from their conversation on WWD.com. #wwdeye (📷: @lizdoupnik)
This Just In: Industry sources have told WWD that Anastasia Soare is rumored to be considering selling her beauty business, @anastasiabeverlyhills. According to those sources, Soare has tapped investment bank Imperial Capital to explore sale options for her eponymous beauty brand –– and with at least $340 million in net sales, this would be a big deal. Put in context of other recent transactions for makeup companies, Soare’s price tag could be in the billions if she were to sell the whole thing. #wwdnews #wwdbeauty (📷: @clint_spaulding)
@assouline’s latest book, “The Spirit of Bentley: Be Extraordinary” captures the adventurous attitudes and opulent lifestyles of @bentleymotors’ most creative owners and enthusiasts throughout the U.K. The 292-page hardcover has a section dedicated to showing its team of skilled artisans and photos of its most colorful owners, from George Bamford to designer @alicetemperley, pictured here by Aline Coquelle. #wwdeye
@google released its report on the most popular search terms this year. For fashion brands, the list was led by @gucci, the luxury brand that stunned the market last October when it pledged to stop using fur. Runner ups were @supremenewyork and @fashionnova, along with more established brands like @louisvuitton, @chanelofficial and @ysl. #wwdfashion (📷: @aitorrosasphoto)
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)