Luxottica operating profit beats forecast with 33% rise

Italian eyewear group Luxottica posted a higher-than-expected 33 per cent rise in operating profit in the first quarter, which marked the debut of its two newly appointed chief executives.

Earnings before interest and tax (Ebit) at the maker of Ray Ban sunglasses came in at €358 million, topping a consensus forecast of €348 million thanks to efforts to keep a lid on cost rises.

Revenues were broadly in line with analyst estimates at €2.2 billion, rising 5 per cent at constant currencies.

Luxottica stuck with its full-year forecast of a mid-to-high single-digit increase in 2015 revenues, and predicted operating and net profits would rise twice as fast as that.

"We're getting ready for an aggressive second quarter. We expect to close the first half firmly in line with our guidance," co-chief executive Massimo Vian said.

Mr Vian, a veteran Luxottica executive, rose to the top following the abrupt exits of two CEOs in the space of six weeks last year due to frictions with Leonardo Del Vecchio, the group's founder and main shareholder.

Mr Vian, who oversees products and operations, was joined in January by Adil Mehboob-Khan, a former Procter & Gamble manager who became CEO for markets in a complex structure that drew criticism from some analysts.

“The organisational model has completed the test phase and delivered the initial results which are under your eyes,” Mr Vian said. “We are very pleased.”

First-quarter sales rose 20 per cent when including the impact of a stronger dollar on Luxottica’s US revenues, which account for more than half of the total.

The successful launch of Michael Kors glasses and recovering sales at optical chain LensCrafters helped the US market, where Luxottica launched a reorganisation of Oakley, the sports eyewear brand acquired in 2007. – (Reuters)