Luxottica beats forecasts and dollar: 162 million euros profit

Luxottica, the world's biggest premium eye wear maker, not just beat analysts’ forecasts but also a weak dollar thanks to an unexpected 8% rise in its second quarter net profit, which reached 162 million euros. "We strongly believe that these

results provide an excellent basis for us to look with confidence to the second half of the year," Chief Executive Officer Andrea Guerra said in the results statement, released the 25th of July after the markets closed.

The Italian company, maker of Ray-Ban and Oakley sunglasses, said on Monday strong demand for luxury brands such as Prada and Burberry helped second-quarter revenue grow 2.4 percent to 1.63 billion euros ($2.34 billion) at current exchange rates. Total group sales, including the company’s Retail Division, rose 9.5 percent at constant exchange rates (+2.4 percent at current exchange rates), to € 1,633.5 million from €1,595.1 million in the second quarter of 2010. Net income for the second quarter of 2011 increased to € 162.1 million ($233.3mm), up by 8.0 percent from €150.1 million ($190.7mm) for the same period of 2010, resulting in earnings per share (EPS) of €0.35 (52 cents) at an average €/U.S. dollar exchange rate of 1.4391. The EPS in U.S. dollars grew by 21.9 percent from 42 cents in the second quarter of 2010 to 51 cents in the second quarter of 2011.

Revenue came at the high end of a range forecast by analysts polled by Thomson Reuters and also overcame other analysts and institutional investors’ expectative. Thus, net profit was up 8 percent to a company record of 162 million euros, above analysts' average forecast.

Following the Italian luxury group´s profit trail, UBS upgraded its rating on Luxottica stock to "buy" from "neutral" this month, while Cheuvreux raised its rating to "selected list" from "outperform" on Monday, citing prospects for new acquisitions in both emerging and mature markets. As highlighted by market insiders, the results recorded by Luxottica´s Wholesale Division are worthy of note, improving on the best-ever sales of previous quarters, recording strong growth in net sales (+11.6 percent at constant exchange rates).

Emerging markets made a key contribution to this performance, along with Europe, particularly France, Germany, Spain and Italy, which enjoyed an especially positive ’sun’ season. However, sales would have risen 9.5 percent without the impact of a weak dollar against the euro. United States and Canada account for around 60 percent of the group's revenue. Besides, Luxottica is boosting its presence in Latin America, a key retail market. This year, the group bought two Mexican chains and took control of optical retailer Multiopticas International.