Luxottica, an Italy-based manufacturer and distributor of fashion, luxury, sport and performance eyewear, reported a 3Q16 adjusted revenue increase of 1.2% (1.4% in constant currency), to €2.2 billion, in line with the consensus estimate. Luxottica e-commerce sales increased by 18% year over year at constant exchange rates. The company stated that results were impacted by weaker performance in the wholesale channel in its largest market, North America.

SALES BY DIVISION

The retail division generated adjusted revenue of €1.4 billion in 3Q16, an increase of 4.4% year over year in constant currency. Sunglass Hut revenues increased by 14% year over year in constant currency. The wholesale division generated adjusted revenue of €0.8 billion in 3Q16, a decrease of 3.6% year over year in constant currency.

SALES BY GEOGRAPHY

Adjusted sales in North America were down 0.3% in constant currency. North American wholesale sales were down 11.2% and US retail sales were up 2.4% in constant currency. LensCrafters’ comps slowed in 3Q16, reflecting a weak North American market and a reduction in price-based promotions. Sales in Europe increased by 8.3% year over year at constant exchange rates. All markets in the region contributed to the sales results except Turkey, which recorded a sales decline after years of strong growth. Adjusted sales in the Asia-Pacific region declined by 0.2% year over year in constant currency. Adjusted sales in Latin America increased by 6.8% year over year in constant currency, driven by Mexico, Peru and Colombia. Adjusted sales in the Rest of the World segment declined by 5.0% year over year in constant currency.

1Q–3Q16 RESULTS

During the first three quarters of 2016, Luxottica’s group adjusted net revenue increased by 1.5% year over year in constant currency, to €6.9 billion.

GUIDANCE

Luxottica confirmed its FY16 guidance outlook. The company expects to generate 2%–3% revenue growth at constant exchange rates and to grow FY16 operating and net income in line with sales. FY16 revenue consensus estimates stand at €9.1 million, implying annual year-over-year growth of 2.8%. Consensus expects operating profit of €1.4 million, implying an adjusted FY16 EBIT margin of 15.5%. Consensus expects FY16 EPS of €1.98, implying flat growth year over year.