Luxottica posted lower than expected fourth-quarter results due to the accounting of one-off charges. Its reported operating income rose by 33.5 percent to €128.4 million, and the net profit attributable to Luxottica stockholders increased by 16.8 percent to €64.4 million. Adjusted to eliminate extraordinary items, the operating profit rose by 19.5 percent to €139.3 million and the net profit was up by 30.8 percent to €72.7 million. The adjusted operating margin widened to 9.2 percent from 8.7 percent.

As reported in our issue of Jan. 25, which gave details on the group's sales performance, Luxottica booked a 12.1 percent increase in quarterly sales to €1.509 billion, with a currency-neutral rise of 11.2 percent. For the full year, revenues were up by 7.3 percent to €6.223 billion and the operating income went up by 13.3 percent to €807.1 million. On an adjusted basis, operating profit grew by 12.0 percent to €820.9 million, so the operating margin rose to 13.2 percent from 12.6 percent.

Luxottica Group Consolidated Income Statement

(Euros' 000, Year ended Dec. 31)

 

2011

2010

%
Change

Manufacturing/Wholesale

2,456,341

2,236,403

9.8

Retail

3,766,143

3,561,632

5.7

NET SALES

6,222,484

5,798,035

7.3

Cost of Sales

2,168,065

1,990,205

8.9

Selling Expenses

1,994,979

1,896,521

5.2

Royalties

106,322

99,606

6.7

Advertising Expenses

408,483

371,852

9.9

G&A

647,664

623,875

3.8

Trademark Amortization

89,831

103,818

-13.5

Other Expense - Net

111,868

106,623

4.9

Pre-Tax

695,272

605,535

14.8

Tax

236,972

218,220

8.6

Minority Interest

5,957

5,072

17.4

NET

458,300

407,259

12.5

Euro/Share (diluted)

0.1

0.9

12.6

The adjusted operating margin of the wholesale division widened by 0.8 percentage points to 21.5 percent, while the retail margin remained in line with the previous year at 11.9 percent. The retail margin is expected to rise this year thanks to an improvement in profitability in China and Latin America and a strong performance in North America.

For the full 2011 financial year, net profit attributable to Luxottica's shareholders increased by 12.5 percent to €452.3 million, disappointing financial analysts who had forecast a bottom line above €480.0 million. With the first two months of 2012 indicating a further double-digit increase in total sales, the company is proposing to increase its dividend by 11.4 percent to €0.49 per share, representing a total payout of about €225.0 million.