Luxottica beat market expectations by reporting a 16.4 percent increase in sales to €1.347 billion in a preliminary statement for the fourth quarter ended last Dec. 31. On a similar currency basis, turnover rose by 6.5 percent, driven by the group's U.S. and Far East operations. In the U.S., where the group achieves about 60 percent of its revenues, quarterly sales in dollars rose by 9.0 percent.
The wholesale division raised sales by 14.4 percent in the fourth quarter to €513.5 million. Revenues rose by 19.7 percent in North America, by 17.5 percent in emerging countries and by 5.4 percent in Europe. Along with North America, the best performing markets were Brazil, Mexico, India, South Korea, Japan and Eastern Europe.
The group was upbeat about the division's prospects this year, indicating that the order backlog enjoyed double-digit growth at the beginning of 2011 as compared to the same time last year. The entire premium and luxury brand portfolio booked a significant improvement in its growth trend. Excluding currency variations, wholesale turnover increased by 7.4 percent in the quarter.
The retail division boosted quarterly sales by 17.6 percent to €833.0 million with all North American banners booking positive sales growth. Comparable store sales went up by 5.6 percent at LensCrafters, by 3.4 percent at Pearle Vision and by 7.0 percent at Sears and Target. Sunglass Hut bolstered same-store sales by 12.9 percent globally and by 18.0 percent in the U.S. Overall, Luxottica's same-store sales rose by 8 percent in the fourth quarter.
Luxottica's retail performance remained negative in the Asia-Pacific region due to poor business conditions in Australia but the trend showed some signs of improvement. Same-store sales in the region were down 7.6 percent year-on-year in the fourth quarter but bounced back from a 13.4 percent drop in the previous quarter. In December, comparable store sales were only slightly negative in the region and the trend could soon become positive.
The group was optimistic about the prospects for the retail division in view of improving consumer patterns in the U.S., where the month of January was encouraging. Luxottica expects an acceleration in retail sales growth in emerging markets, especially in China.
The fourth-quarter sales results helped to push the growth in full-year revenues to 13.8 percent, allowing the group to reach a record sales level of €5.798 billion in 2010. The company said its earnings before interest, tax, depreciation and amortization (Ebitda) rose by about 20 percent to more than €1.0 billion and net profits rose by around 35 percent to over €400 million. The group trimmed its net debt to €2.140 billion at the end of 2010 from €2.337 billion a year earlier, cutting the net debt ratio to 2.1 times Ebitda from 2.7 times.
The company will release final full-year results on Feb. 28. Financial analysts expect Luxottica's sales to exceed €6 billion in 2011 and that net profits will break the €480 million mark.