Luxottica Group Q3 Profit Down 20.6%, Sales Edges Up

10/29/2009 3:33 PM ET

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(RTTNews) - Designer and distributor of fashion, luxury and sports eyewear Luxottica Group SpA (LUX: News , LUXGF.PK), on Thursday reported a 20.6% drop in profit for the third quarter, reflecting higher expenses and lower margins, notwithstanding a 0.9% growth in sales from last year.

Andrea Guerra, CEO of Luxottica Group, commented: "Now that we are approaching the end of a year as demanding as 2009, we believe that the worst is behind us. Flexibility, speed, the ongoing search for new solutions and a continued focus on the balance sheet have enabled Luxottica to post positive results even in a period as difficult as what we experienced.

For the third quarter, the Milan, Italy based company's net income attributable to Luxottica group shareholders slid to EUR 83.1 million from EUR 104.6 million in the year-ago quarter. On a per share basis, earnings slipped 20.7% to EUR 0.18 from EUR 0.23 last year.

Earnings before Interest, Taxes, Depreciation, and Amortization, or EBITDA, for the quarter declined 17.3% to EUR 214 million from EUR 258.6 million in the prior-year quarter. On a per share basis, earnings before trademark amortization dropped 14.5% to EUR 0.21 from EUR 0.25 last year. In U.S. dollar terms, net income declined 24.5% to US$ 118.86 million from US$ 157.50 million last year. Earnings decreased 24.6% to US$ 0.26 basic per share from US$ 0.34 basic per share in the year -ago period.

In the previous second quarter, Luxottica's net income decreased 12.7% to EUR 115.7 million from EUR 132.6 million in the prior-year quarter. On a per share basis, earnings dropped 12.9% to EUR 0.25 per share from EUR 0.29 per share last year. EBITDA for the second quarter declined to EUR 277.3 million or EUR 0.28 per share from EUR 294.7 million or EUR 0.32 per share a year earlier.

Net sales for the latest third quarter grew to EUR 1.223 billion from EUR 1.211 billion a year earlier. However, sales were down 1.4% at constant exchange rates from the previous-year quarter. In U.S. dollar terms, net sales for the quarter declined 4.1% to US$ 1.750 billion from US$ 1.824 billion a year earlier.

Segment wise, Wholesale division's revenue for the quarter slid 0.1% to EUR 429.8 million from EUR 429.5 million a year earlier. Operating income for the division decreased 11.4% year-over-year to EUR 62 million.

Retail sales for the quarter rose 1.5% to EUR 793.8 million from EUR 782.2 million in the comparable quarter last year. Operating income for the quarter, however, declined 17.6% to EUR 114 million from EUR 138.3 million in the same quarter last year.