MILAN March 13 (Reuters) - Italian eyewear maker Luxottica (LUX.MI) is bracing itself for a tough first quarter, it said on Friday, as the economic crisis slows demand.
Luxottica, the world’s biggest in its field, said it would not give a guidance for this year, as the current environment was “profoundly uncertain”, but presented possible scenarios.
“Q1 will not be easy at all, but currency is also helping on the other side, (but) it is not helping as much as we wished,” Chief Executive Andrea Guerra told a webcast analyst presentation. “Organic growth will be challenging in 2009.”
Shares were down 6 percent to 10.38 euros at 1128 GMT.
“The year didn’t start in a wonderful way. It was a continuation of the last months of 2008,” Guerra said. “February was better than January, the early part of March better than February.”
Chief Financial Officer Enrico Cavatorta presented three sales growth scenarios for the year -- if sales were flat at constant exchange rates, net income was seen unchanged from last year’s 395 million euros ($508.4 million), down 17.6 percent on 2007.
If sales fell 4-6 percent, a 15-20 percent fall in net income was seen, while if they fell 8-12 percent, net income was seen down 30-40 percent. This was based on a euro/U.S. dollar exchange rate of 1:1.30. “We are not providing a guidance,” Cavatorta said. “The last (scenario) is more unlikely.”
Luxottica, which makes glasses and sunglasses for brands such as Prada and Ray-Ban, on Thursday reported 2008 results and said it would not propose a dividend for now.
It said it planned to reduce store numbers worldwide by 2-3 percent and seek to reduce inventories by 10-15 percent.
Last month it posted a 4.7 percent rise in 2008 net sales to 5.2 billion euros, mainly from inclusion of U.S. brand Oakley which it bought in 2007.
The global economic crisis is gripping the retail sector and the Italian eyewear industry is also affected by slowing demand. Production has fallen more than 10 percent in the first quarter, following a decline last year, an industry body has said.
Luxottica rival Safilo’s (SFLG.MI) net profit fell 71.3 percent last year to 14.6 million euros, as demand slowed and high production costs in Italy also weighed. (Additional reporting by Cristina Carlevaro)