Fashion, luxury and sports eyewear company, Luxottica Group, closed fiscal 2014 with an increase in adjusted net sales of 5.3% (+6.7% at constant exchange rates2), to over €7.6bn ($8.6bn).

Luxottica, which designs, manufactures, distributes and sells fashion, luxury and sports eyewear describes the result as “a particularly satisfactory result in a globally more uncertain economic environment”.

According to the Group’s total results, Wholesale and Retail divisions both contributed to the Company’s strong results, growing by 8.6% and adjusted 5.4%, respectively, at constant exchange rates.

Luxottica hero brand, Ray-Ban, in particular, continued to record double-digit growth. These results were also driven by the performance of Luxottica’s major retail chains, especially Sunglass Hut’s sustained growth worldwide (total sales +13.5% at constant exchange rates) and LensCrafters’ progressive quarterly sales improvement.

The Board of Directors of Luxottica Group S.p.A has also announced the appointment of Adil Mehboob-Khan as CEO for Markets and Massimo Vian as CEO for Product & Operations.

The appointment of Adil Mehboob-Khan and Massimo Vian, marks the completion, of the Group’s organizational changes ‘aimed at providing it with governance that is better aligned to the global competitive landscape and able to fully grasp all growth opportunities’.

+14.9% GROWTH IN Q4

In the fourth quarter of 2014, adjusted net sales grew by 14.9% (+9.3% at constant exchange rates) reaching €1.9bn, benefitting from a favourable exchange rate effect.

“We are proud of the results for 2014, which show increased sales in all the geographic areas in which we operate, and a further improvement in the profitability of the Group and of both divisions,” said Massimo Vian, CEO for Product & Operations.

“Also in 2014, careful management of working capital generated exceptional cash flow, considerably exceeding the amount generated in 2013.

“Based on these results, we look forward to 2015 and the following years with enthusiasm and renewed energy to capture all the available opportunities, with the aim of doubling net sales in the next 10 years. We warmly welcome Adil Khan, who joined our team in early January.”

“My congratulations to the team for what has been achieved in 2014” – added Adil Khan, CEO for Markets. “Luxottica has confirmed the robustness of its business model beating the overall market trends and continuing its track record of growth, both with wholesale partners as well as with its retail network. We have many great opportunities to further leverage the brand portfolio, our technology edge, our integrated supply chain, in 2015 and beyond. I look forward to partnering with Massimo and the impressive team at Luxottica”.

NORTH AMERICA ‘MAIN GROWTH DRIVER FOR THE GROUP’

The main growth driver for the Group’s net sales in 2014 was North America, which recorded an increase in total adjusted net sales in US dollars of 5.3% (+12.2% in the fourth quarter). This result in North America was driven by an increase of 4% on an adjusted basis in the Retail Division and 11.2% in the Wholesale Division (+11% for the Retail Division on an adjusted basis and +18.6% for the Wholesale Division, respectively, for the fourth quarter of 2014).

This performance can be attributed to the continuing appreciation of American consumers in Luxottica’s eyewear collections and confirms the strength of the business in both traditional and newer channels for this category, such as department stores and e-commerce.

Concerning the fourth quarter results, the impact of the 53rd week on the retail business generated net sales of approximately €60m.

Throughout 2014, total comparable store sales in North America grew by 3.3% (+5% during the fourth quarter). Sunglass Hut showed the strength of its business model in the holiday season as well, reporting a +7.4% increase in comparable store sales in 2014 (+5.9% in the fourth quarter).

‘POSITIVE EUROPEAN PERFORMANCE’

The performance in Europe was positive overall, with increased net sales in Euro of 4.3% for the full year, which reflects market share growth in major European markets.

Emerging markets continued to record ‘excellent results’, with net sales increasing at constant exchange rates by 17.6% for the full year and by 14.7% in the fourth quarter.

China and Brazil, over the year, increased by 19.3% and 19.9% respectively at constant exchange rates, despite a challenging macroeconomic environment. Furthermore, comparable store sales of Sunglass Hut in Latin America and South Africa grew respectively by 18.9% and 16.3% during the year.

In 2014, the Retail Division in Australia experienced dual speed performance from Sunglass Hut and OPSM (Australia’s ‘leading eye care provider’). “On the one hand, Sunglass Hut’s comparable store sales grew by 8.5%, with the fourth quarter in line with the previous quarters,” says Luxottica.

“On the other hand, OPSM was negatively affected by an increasingly competitive environment, recording an increase in comparable store sales of 1.7% for the full year, reflecting a slowdown in the second half of the year.”