MILAN — North America drove record net profits and sales in 2014 for eyewear giant Luxottica Group SpA.
The company saw 2014 net income of 687 million euros, or $771 million at current exchange rates, on total adjusted net sales of 7.7 billion euros, or $8.6 billion.
Adjusted net income climbed faster than net sales, which rose by 11.4 and 6.7 percent, respectively, at constant exchange rates compared with 2013.
The strong results came despite a year of turmoil at the company, which saw chief executive officer Andrea Guerra leave in September after clashing with chairman Leonardo Del Vecchio, and the naming of co-ceos. But the first named, Enrico Cavatorta, left after only a month in that role, and Del Vecchio had to step in as interim ceo until eventually naming Massimo Vian and Adil Khan to the roles.
Luxottica enjoys a dominant position in the prescription eyewear market, owning brands such as Ray-Ban, Oakley, Vogue Eyewear, Persol, Oliver Peoples, Alain Mikli and Arnette. It also holds licenses for designer labels Giorgio Armani, Bulgari, Burberry, Chanel, Coach, Dolce & Gabbana, Donna Karan, Michael Kors, Paul Smith, Polo Ralph Lauren, Prada, Starck Eyes, Tiffany, Tory Burch and Versace. Roughly 73,000 employees work for Luxottica, which owns a dozen production facilities worldwide and has a network of over 7,000 retail stores.
“In 2015, we expect solid revenue growth and profitability to grow twice that of sales, as it has for the past five years, and we see continued growth across businesses in developed and new markets, with bright spots including Ray-Ban, Oakley and Sunglass Hut,” said Vian and Khan.
Luxottica’s stock price on the New York Stock Exchange rose 4.4 percent to close at $63.95 on Monday.
“This is a terrific moment for Luxottica,” commented Vian and Adil Khan. “The acceleration of sales and profitability in the fourth quarter gave us strong momentum going into 2015. We closed another record year of strong sales and profitability growth.”
Sales in North America grew 5.3 percent for all of 2014, but were boosted by 12.2 percent growth in the fourth quarter.
Luxottica’s North American sales were pumped up by the Wholesale Division, where net sales in North America rose 11.2 percent for the year. By contrast, the European Wholesale Division posted a 2014 net sales increase of 2.5 percent at constant exchange rates, which Luxottica blamed mainly on the lack of sunny weather in the last half of the year.
Global net sales in 2014 for the Wholesale Division rose by 8.6 percent at constant exchange rates to 3.2 billion euros, or $3.58 billion, generating an operating income of 725 million euros, or $812 million — a 10 percent increase over 2013.
The Wholesale Division’s operating margin grew to 22.7 percent compared to 22 percent in 2013.
North American Retail Division sales edged up by 3.3 percent in 2014, through stores like LensCrafters, Sunglass Hut, OPSM and Laubman and Pank. Total net sales for both wholesale and retail divisions for Europe climbed 4.6 percent at constant exchange rates in 2014, reflecting growth in market share for major European markets, Luxottica said.
Emerging markets saw net sales surge 17.6 percent at constant exchange rates for 2014, with China and Brazil increasing net sales by 19.3 and 19.9 percent, respectively, despite tough macroeconomic conditions.