MILAN — Luxottica Group SpA, the world’s largest maker of eyewear, posted a 24.2 percent jump in net profit for the full year on the back of strong sales growth in the U.S., Europe and emerging markets and following continued improvement in its operational efficiency.
In a statement released after the close of trading in Milan, where Luxottica is listed, the company said adjusted 2015 net profits — which strip out a series of one-off expenses, including costs relating to the Oakley integration project — reached 854 million euros, or $930.9 million, on adjusted net sales of nine billion euros, or $9.8 billion, up 17 percent in 2014. At constant currencies, the sales increase would have been 5.5 percent.
In the fourth quarter, adjusted net sales grew 8.9 percent to 2.1 billion euros, or $2.3 billion, with adjusted net profit down 1 percent, to 120 million euros, or $130.8 million. Sales rose 2.7 percent in constant currencies.
Luxottica posted gains in all its business segments — wholesale and retail — and in the major geographic markets, as more consumers were attracted to its brand portfolio, recently enriched by the Valentino license, and by what the company said is its ability to “provide unique customer experiences across its retail chains.”
In both the fourth quarter and the full year, the retail division outperformed the wholesale side, thanks to strong performances by Sunglass Hut — whose 2015 sales jumped almost 25 percent from 2014, or 10 percent at constant exchange rates — and LensCrafters in North America.
E-commerce revenues increased 50 percent over the previous year, the company said.
In geographic terms, sales grew most rapidly in emerging markets, up 14.5 percent at current exchange or 13.3 percent at constant currencies, followed by Europe, up 7.8 percent or 6.8 percent at constant currencies, and the U.S., 22.9 percent or 3.7 percent at constant exchange, and was boosted by “buoyant domestic demand,” Luxottica said.
The company said for the three-year period 2016 to 2018 it expects “continued organic growth and improvements to the already high levels of profitability” sustained by its “growth pillars,” which include product quality, strong brands, efficient factories and widespread distribution.
Specifically for 2016, Luxottica said it expects sales growth of 5 to 6 percent, at constant currencies, as well an operating income and net income “equal or above” 1.5 times sales.
The company also said its plan to increase investments — which currently account for about 6 percent of net sales, “along with the simplification process currently under way,” is expected to “accelerate growth in 2017 and 2018” with revenues growing in the mid- to high-single digits at constant exchange rates and operating and net income expected to increase by more than 1.5 times sales.
The new forecast appears to surpass the company’s recent outlook for revenue growth: during the third quarter results conference call last October, then co-chief executive officers Adil Khan — who has since left the company — and Massimo Vian said 2015 was the sixth year of a “rule of thumb” growth, meaning organic growth of sales in the mid- to high-single-digit range. “The rule of thumb cannot be sustained forever. We stick to this year. We’ll see for next year; it’s too early to commit,” Khan had said.
Luxottica chairman and single largest shareholder Leonardo Del Vecchio and Vian said Tuesday that over the next three years the company will invest 1.5 billion euros, or $1.63 billion at current exchange, to support the group’s “digital transformation, strengthening operations, expansion into new markets and the constant innovation of products and processes.”
Luxottica — which produces its own brands Ray-Ban and Oakley, as well as licensed collections for Giorgio Armani, Chanel and Prada, among others — proposed a dividend corresponding to 50 percent of its full year net profit and announced a share buyback scheme valued at up to 750 million euros, or $817.5 million at current exchange rates.