MILAN — Italian eyewear maker Luxottica Group SpA expects market conditions to ease after a challenging nine months, which included a 20.6 percent drop in third-quarter earnings.
“Now that we are approaching the end of a year as demanding as 2009, we believe that the worst is behind us,” Luxottica chief executive officer Andrea Guerra stated Thursday. “We are optimistic about the future.”
Net profits for the three months through Sept. 30 fell to 83.1 million euros, or $118.8 million, from 104.6 million euros, or $157.6 million, although Luxottica noted third-quarter earnings in 2008 were aided by 29 million euros, or $43.7 million, of nonrecurring items.
Dollar figures were converted at average exchange rates for the periods to which they refer.
Consolidated net sales increased 0.9 percent to 1.22 billion euros, or $1.75 billion, boosted by favorable exchange-rate fluctuations. At constant exchange, sales declined 1.4 percent.
Luxottica, which owns the Oakley and Ray-Ban labels and holds eyewear licenses with brands including Bulgari, Burberry, Chanel, Dolce & Gabbana, Prada, Tiffany & Co. and Versace, said international markets stabilized in the third quarter, though in an environment that continued to be challenging. Europe, and in particular Italy, Spain, Germany and France, showed “encouraging signs of recovery,” while North America found “some stability.” Emerging markets overall “did not show signs of a slowdown,” Luxottica said.
“We are working to make sure that 2010 is again a normal year, in which we enjoy growth in sales, a solid improvement in profitability, greater than the growth in sales, as well as strong free cash-flow generation and deleveraging,” Guerra stated.
Earnings before interest, taxes, depreciation and amortization declined 17.3 percent to 214 million euros, or $305.8 million. As of Sept. 30, net debt declined to 2.41 billion euros, or $3.45 billion, from 2.63 billion euros, or $3.96 billion, as of June 30, which Luxottica attributed to tight controls over working capital and favorable exchange rate fluctuations.
Earnings per share fell 20.7 percent to 0.18 euros, or 25 cents.
Luxottica issued the results after the close of trading in Milan, where its stock gained 3.6 percent to 17.15 euros, or $25.36.