Luxottica reiterates 2017 guidance despite hurricane disruption
Eyewear giant Luxottica, best known as the company behind the overwhelming majority of brands on the market, like Ray-Ban, had its third quarter earnings hit hard by hurricanes. This is because North America is its biggest market, and the region has been pummeled in recent months by a run of the natural disasters. Despite this, the company only just missed analysts’ estimates, and (in contrast to investors’ fears) has reiterated its guidance for the full year.
Luxottica’s share price jumped on the reiteration of its full year guidance
SOURCE: Yahoo Finance
Luxottica’s CEO, Massimo Vian, confirmed that the company would be sticking with its original forecast, but probably only manage to hit the lower end of it. He said: “we confirm our guidance… we will likely be at the lower end of the range.” He also pointed out that the first few weeks of October “had a plus sign” for the company worldwide.
Hurricanes in Texas, Florida, and Puerto Rico meant that Luxottica had to close 570 shops during the third quarter – most of them for a week or more – eating into the company’s sales in a region that accounts for nearly 60% of its business. Taken alongside the weaker dollar, and “disruption at a data storage supplier” which “hurt orders” at the quarters end, its no surprise that Luxottica felt the pinch somewhat in the three months to the end of September.
In Europe, it was a different story, and the company saw a 16% rise in sales, minus currency effects (for comparison: the U.S. saw -4% with currency effects stripped out). The company is still awaiting news on their planned merger with French lens maker Essilor, but Vian is “confident” about the outcome.
Dominion holds Luxottica in its Global Trends Luxury Fund.
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