January 29, 2018 / 5:52 PM / a year ago

UPDATE 1-Luxottica sees strong adj. net profit growth after FY sales meet guidance

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By Valentina Za and Claudia Cristoferi

MILAN, Jan 29 (Reuters) - Italy’s Luxottica, the world’s biggest eyewear maker, sees 2017 adjusted net income growing strongly after a robust fourth quarter helped it to meet its full-year sales guidance.

Luxottica is awaiting antitrust approval of the 50 billion euro ($62 billion) merger it agreed a year ago with rival Essilor to create a lens-to-frame manufacturer with a global shop network and a portfolio of top brands such as Ray Ban and Chanel.

Sales last year totalled 9.16 billion euros ($11.3 billion), up 2.2 percent net of currency moves, in line with a Thomson Reuters SmartEstimate analyst consensus.

Luxottica had guided for a “low to mid” single-digit growth in 2017 sales at constant currencies and forecast a broadly similar rise in its adjusted operating and net profit.

“Adjusted net income (is) expected to grow strongly,” the company said on Monday.

The group will publish full 2017 results on Feb. 26.

Fourth-quarter sales rose 4.3 percent at constant currencies, more than twice the pace of growth seen in the first nine months, thanks to an improving U.S. market.

North America, where Luxottica owns retail chains LensCrafters and Sunglass Hut, is the biggest market for the Milanese group, accounting for 60 percent of group sales in 2016.

However, when factoring in the weakness of the U.S. dollar and other currencies against the euro, fourth-quarter sales were down 2.3 percent year-on-year and the annual rise thinned to 0.8 percent.

“The fourth quarter of 2017 was the best of the year for the wholesale business, retail comparable store sales, Sunglass Hut performance in its main geographies and e-commerce sales,” Luxottica said.

Same-store sales were flat in the fourth quarter compared to 2016 after declining sharply in the previous quarter due to an overhauling of LensCrafters’ business model. Sales at the chain continued to drop, albeit by less, in the fourth quarter.

Since returning, in 2014, at the helm of the group, Luxottica Chairman Leonardo Del Vecchio has overseen a restructuring of the business he founded as well as a string of management changes. Luxottica lost in December its fourth CEO in three years.

$1 = 0.8095 euros Editing by David Evans

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