NEW YORK — A weak U.S. dollar as well as decelerated sales depressed earnings for Luxottica Group SpA for the fourth quarter and full year.
This story first appeared in the January 30, 2004 issue of WWD. Subscribe Today.
For the three months ended Dec. 31, the Milan-based eyewear manufacturer and retailer saw earnings fall 4.6 percent to $70.8 million, or 16 cents per diluted American depositary share. One ADS represents a single share. Comparatively, the company reported earnings of $74.2 million, or 16 cents, in the year-ago quarter.
Sales for the period vaulted 26 percent to $853.2 million from $677 million a year ago. Dollar figures have been converted from the euro using an average exchange rate.
The company’s retail division, which includes LensCrafters and Sunglass Hut International, proved to be the best performer during the quarter. According to the company, retail sales rose 13.1 percent for the quarter. Assuming constant exchange rates, sales would have ballooned 29.6 percent.
Leonardo Del Vecchio, chairman, said in a statement, that “same-store sales actually increased by 2.9 percent with the first signs of economic improvement in North America,” marking the first positive same-store sales figure since the fourth quarter of 2001. Del Vecchio attributed the results to a strong holiday season and increased sales at Sunglass Hut in particular.
The firm’s manufacturing and wholesale division saw sales fall 7.6 percent during the quarter.
For the full year, earnings slumped 14 percent to $302.3 million, or 67 cents an ADR, from $351.6 million, or 77 cents an ADR, in 2002.
Del Vecchio pointed to the “16.4 percent devaluation of the U.S. dollar against the euro,” as a key factor weighing down earnings.
Sales for the year crept up 6.3 percent to $3.19 billion from $3 billion a year ago.
As reported, Luxottica announced the acquisition of Cole National through a merger of one of its subsidiaries on Monday for a purchase price of approximately $401 million.
Bringing Cole into the fold gives Luxottica an additional 2,197 units across North America, including the already established Pearle Vision stores. Cole also operates one of the largest managed vision care benefit programs, as well as Things Remembered, a 728-location mall-based personalized gift business.
After attaining stockholder and regulatory approval, both parties expect the deal to close in the second half of this year.