MILAN — High exposure to the U.S. market hit Luxottica Group SpA for the second straight quarter, but the Italian eyewear giant still expects to meet its full-year targets.
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Luxottica, which has eyewear licenses with Chanel, Dolce & Gabbana, Prada and Versace, among others, said Thursday that second-quarter earnings fell 14.2 percent to 132.6 million euros, or $208 million at average exchange, hurt by the dollar’s slide against the euro and the slowdown in consumer spending, particularly in North America.
Revenues for the period gained 2.1 percent to 1.35 billion euros, or $2.12 billion, driven by the strong demand of its wholesale business worldwide, which was up by a fifth. In dollars, net sales rose 18.3 percent.
Despite the drop in earnings, Luxottica chief executive officer Andrea Guerra confirmed the guidance for the full year, of earnings per share of 1.11 euros, or $1.73, to 1.14 euros, or $1.78.
“The true strength and resilience of our business model was reflected in our ability to withstand and to quickly and efficiently react to the difficult market conditions that we faced in the period,” Guerra said, citing cost controls, which had improved profitability. He added that results were “well above those of the overall market and key peers.”
Looking to the future, Guerra said: “We believe we are extremely well positioned to tackle the challenges ahead due to a truly global presence; the ability to forge even closer relationships with key clients; the investments made over the past few years in an ever-stronger and increasingly effective organization, and the strongest, most well-balanced portfolio in the industry.”
By brand, the company highlighted that both Ray-Ban and Oakley registered “another strong quarter,” Ray-Ban due in part to the strength of the Wayfarer model, “which is now the second-best-selling model worldwide,” and Oakley due partly to strong performances by its athletes and ahead of the brand’s strong visibility at the upcoming Olympics in Beijing.
Meanwhile, luxury brands showed “some signs of weakness” due to the economic downturn.
Luxottica also said it now expected onetime charges tied to the merger of the Foothill Ranch, Calif.-based Oakley Inc., which the Italian company acquired for $2 billion in June, to total 20 million euros, or $31.2 million, from 25 million euros, or $38.5 million, as previously forecast.
Luxottica released the results after the close of the Italian stock market, where the share price closed down 4.4 percent to 15.73 euros, or $24.51 at current exchange.