1Q17 Trading Update
Luxottica—an Italy-based manufacturer and distributor of fashion, luxury, sport and performance eyewear—reported a 1Q17 adjusted revenue increase of 5.2% (1.9% at constant currency), to €2,384 million, above the consensus estimate of €2,377 million.
Luxottica e-commerce sales increased by 6% year over year at constant exchange rates in 1Q17, and were negatively affected by lower promotional activity at Oakley.com and SunglassHut.com.
Sales growth was driven by resilience in the retail segment, mainly in Europe and Latin America.
Sales by Division
The retail division generated adjusted revenue of €1,426 million in 1Q17, an increase of 3.3% year over year at constant currency rates. Sunglass Hut worldwide comparable store sales declined by 5.4% year over year.
The wholesale division generated adjusted revenue of €958 million, with flat year-over-year growth at constant currency rates.
Sales by Geography
Adjusted sales in North America declined by 2.5% at constant currency in 1Q17 due to weak consumer spending in the US. North American wholesale sales declined by 3.2% and US retail sales declined by 2.3% at constant currencies. North American sales continue to be affected by initiatives aimed at curbing online discounts and improving the quality of distribution channels. LensCrafters’ comps declined by 2.9% in the quarter.
Sales in Europe surged by 17.4% year over year at constant exchange rates, driven by strong growth in Italy, Germany, Portugal, Turkey and Eastern Europe.
Adjusted sales in the Asia-Pacific region increased slightly by 0.6% year over year at constant currency rates.
Adjusted sales in Latin America increased by 5.5% year over year in constant currency, driven by fast growth in Mexico and a meaningful contribution from Brazil.
Adjusted sales in the Rest of the World segment dropped 16.8% year over year at constant currencies.
Outlook
The company did not provide explicit numerical guidance for FY17.
Consensus estimates for FY17 revenue stand at €9,646 million, implying year-over-year growth of 6.2%. Consensus expects operating profit of €1,507 million, implying year-over-year growth of 5.2%, and FY17 EPS of €2.10, implying year-over-year growth of 2.9%.