MILAN — High exposure to the U.S. market hit Luxottica Group SpA in the first quarter, but the Italian eyewear giant still expects to meet its full-year targets.
Luxottica, which has licenses with Chanel, Dolce & Gabbana, Prada and Versace, among others, said Thursday that first-quarter earnings fell 19.1 percent to 103.7 million euros, or $155.3 million at average exchange, due to the soft dollar, the slowdown in consumer spending in the U.S. and the integration of the Oakley brand.
"In these circumstances and despite these factors, group profitability performed well," Luxottica chief executive officer Andrea Guerra said.
Sales for the three months ended March 31 grew 7.6 percent to 1.39 billion euros, or $2.09 billion, driven by the strong performance of its wholesale business worldwide, which was up by a third. Stripping out currency fluctuations, total revenues would have risen 16.6 percent.
Despite the drop in earnings, Guerra confirmed the guidance for the full year, saying the revenue increase, including a 3 percent rise in the U.S. where Luxottica has the majority of its stores, was "an encouraging indicator for the remainder of the year."
Guerra said Luxottica had planned for and reacted to the tougher market conditions, citing a cost control plan, which "allows us to view our prospects for future quarters positively."
He added he expected business to pick up "especially in the second half" and to "reap the benefits of its leadership in the market, exploiting Oakley's seasonality and the new wholesale-retail mix resulting from the integration."
Luxottica, which owns Ray-Ban, acquired the Foothill Ranch, Calif.-based Oakley Inc. for $2 billion in June and completed the merger in November. Luxottica, which last week won the Stella McCartney license from rival Safilo, has forecast earnings per share of 1.11 euros, or $1.77 at current exchange, to 1.14 euros, or $1.82, in 2008.
Luxottica released the results after the close of the Italian stock market Thursday. The share price closed up 0.24 percent to 16.34 euros, or $26.06.
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