OCTOBER 25, 2010, 1:25 P.M. ET.

Luxottica's Net Soars 35% on U.S. Growth

By CHRISTOPHER EMSDEN

ROME—Luxottica SpA said Monday its net profit in the third quarter rose 35% on remarkably strong sales of luxury eyewear in Europe and a double-digit jump in U.S. revenue from its Sunglass Hut chain.

Net profit at the world's largest eyewear maker was €101.9 million ($142 million), up from €75.8 million in the third quarter of 2009. Sales rose 20% to €1.46 billion from €1.22 billion.

Luxottica benefitted from its hefty exposure to the U.S. dollar, which traded 10% stronger against the euro in the third quarter than in the same period a year earlier. The effect of sales in China was the same while it was even stronger for sales denominated in Japanese yen. Stripped of currency fluctuations, revenue rose 8.6%, the company said.

Chief Executive Andrea Guerra said current trends made him optimistic and "may allow us" to post full-year profit of EUR400 million.

Driving Luxottica's growth was a remarkable 13% jump in net sales registered in Europe, where consumer spending has in general been very weak.

Globally, the sale of luxury brands—Luxottica is the eyewear producer for a host of fashion labels—rose more than 20%, while key proprietary brands Ray-Ban and Oakley each posted "double-digit" growth, the company said.

Net sales in U.S. dollars in North America rose 8.5% from the third quarter of 2009, driven by a 13% leap at the Sunglass Hut chain, while sales in key emerging markets rose 26%, with notably sharper jumps in India and South Korea, Luxottica said.

Mr. Guerra called the results "positive" and said Luxottica was making "the best of the opportunities offered by the New World in which we operate."

Luxottica also announced it will issue a €500 million bond in a bid to further optimize its balance sheet. Some analysts expect Luxottica, which is four times larger than its next-largest rival Safilo Group SpA, will boost its dividend as its growth prospects shrink due to its size.

During a conference call after the results were released, Luxottica gave further details as to how its businesses were performing.

It said its emerging-markets collection of Ray-Ban products was growing well, and that sales of prescription eyewear sporting both the Ray-Ban and Oakley labels were outperforming traditional sunglasses sales. Prescription Ray-Ban eyewear sales rose 35%, according to a slide posted on Luxottica's website.

As for Oakley, the recently acquired U.S. sports brand for which Luxottica has launched an e-commerce platform to boost sales, sales grew more than 20% in Europe, led by France, Italy and Scandinavia, with prescription eyewear sales up by more than 50%.

Regarding Europe, Luxottica's wholesale sales in the region were up 12% on the year, led by a sellout of sunglass products in the Mediterranean region, even though sales fell 49% in Greece.

Luxottica executives said they had "higher confidence" for the fourth quarter and beyond and said acquisitions might further boost long-term growth prospects, although they didn't give details.

Write to Christopher Emsden at chris.emsden@dowjones.com

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