Luxottica (BIT: LUX) FY16 Trading Update: Solid Performance in Retail Segment Outweighs Weakness in Wholesale

Executive Summary

• Luxottica reported that adjusted revenue in FY16 increased by 0.8% (1.9% at constant currency), to €9,086 million, which was slightly above the consensus estimate of €9,070 million. The company also announced an agreement to acquire 100% of Óticas Carol, one of the largest optical retail franchisors in Brazil.
• Sales growth was driven by strong performance in Europe and Latin America, as well as by solid performance in the retail segment. Luxottica’s e-commerce sales increased by 24% year over year at constant exchange rates in FY16.
• The company did not provide explicit numerical guidance for FY17, but stated that growth was healthy in the first few weeks of 2017 and that management expects growth to accelerate during the year.
• On January 16, 2017, Luxottica agreed to a merger with France-based Essilor (ENXTPA: EI) to create an eyewear industry powerhouse valued at €46 billion.