Luxottica Luxottica and Essilor Merge Proceeding as Planned Luxottica Group SpA (MTA_LUX; NYSE_ LUX) Luxottica Group is

Luxottica Luxottica and Essilor Merge Proceeding as Planned Luxottica Group SpA (MTA:LUX; NYSE: LUX) Luxottica Group is also cautious about its outlook for the year after experiencing a slowdown in revenue growth and a slight decline in operating profit last year. The group's executives continued to defend their agreement with the world's largest lens maker Essilor International SA (ESSI. PA) Essilor in France's 鈧?6 billion merger transaction. In the 2016 fiscal year, Luxottica Group SpA reported an operating profit of 1,345 million euros, down 2.3 percent from 1,376 million euros in the 2015 fiscal year, and an adjusted operating profit of 1,432 million euros, also down 0.7 percent but slightly better than the market expectation of 1,420 million euros.

Adjusted operating margin of 15.8 percent was down 20 basis points from the previous year, mainly due to investments in digitalization and new store expansion, as well as poor retail conditions in the United States, which plunged 100 basis points to 13.7 percent, compared to a net addition of 300 stores and an investment of 650 million euros last year. In an analyst call, CFO Stefano Grassi expects operating margins to improve in the current fiscal 2017 as sales from last year's new stores in the second half of the year improve profitability.

Full-year net profit rose from 804 million euros to a record 851 million euros, with an increase of 5.8 percent and adjusted net profit increased by 3.3 percent to 882 million euros. Luxottica Group SpA increased its annual dividend by 3.4% to 0.92 euros per share.

In January, the Group reported full-year net sales totalling 9,086 million euros, up 2.8 percent from 8,837 million euros in the 2015 fiscal year and up 3.9 percent in constant currency terms. Growth accelerated in the fourth quarter compared to the previous nine months, particularly in North America, the largest market. Sales in the wholesale segment declined by 1.8 percent, while the retail segment grew by 2.6 percent, the wholesale segment remained flat at constant exchange rates, the retail segment rose by 3.4 percent, and the e-commerce platform grew by 24 percent.

In terms of sales and earnings outlook for this year, the group expects to record low-to-mid-single-digit growth, adding that this year will still be a year of significant investment for the group, and several projects in progress will affect sales. Last year, the group spent 69.5 million euros on a number of restructurings, including a restructuring triggered by the decision of Leonardo Del Vecchio, the founder, executive chairman and largest shareholder of the group to return to the management role of the group, and Adil Mehboob-Khan, the former CEO in charge of the marketing function, who left the company, took 17.4 million euros with him.

As for the actual earnings recorded in the 2017 financial year, the 鈧?00 million proceeds from the recent sale of the former Milan headquarters by Luxottica Group SpA will certainly contribute to the earnings gains. The deal was disclosed by Reuters, citing sources, and Luxottica Group SpA declined to comment. Formerly headquartered in Milan, the 12,000-square-metre area near Piazza Duomo in Milan moved its headquarters in the summer of 2014 to a new office under the property company Beni Stobili, which is indirectly owned by Leonardo Del Vecchio.

In January of this year, Leonardo Del Vecchio and Hubert Sagnieres, Chairman and CEO of Essilor International SA, finalized negotiations for a merger transaction. After passing the antitrust review and obtaining the approval of Essilor International SA's shareholders and completing the closing, the two companies will merge to become the absolute leader in the eyewear industry with annual sales of more than 15 billion euros.

Luxottica Group SpA said on an analyst conference call that the deal is progressing as planned. Group executives also continue to promote the benefits of the merger. Paolo Alberti, President of Wholesale Distribution, pointed out that the merger would be beneficial to wholesalers, not only to reduce inventory but also to provide customers with faster and better service, and that the two largest private label brands, Ray-Ban and Oakley, would benefit the most.

Massimo Vian, CEO of Products and Operations, spoke about the growth prospects, with double-digit growth in both frames and lenses in the next five years, and frame sales to nearly 1.2 billion pairs by 19% by 2021 compared to today, and 715 million pairs of lenses by 17%.

If Luxottica Group SpA develops independently, sales are not expected to reach 15 billion euros until 2024, while the merger with Essilor International SA will instantly strengthen the professional and consumer eye care business and eye care brand management business, forming an important pillar for vertical integration. Luxottica Group SpA, the world's largest eyewear manufacturer, Lenscrafter Spoters, a retailer of the Luxottica Group, has been dragged down by the weaker consumer spending in the United States, the largest market in the past year, especially as aggressive promotional discounts hurt retail margins.

Massimo Vian revealed that more LensCrafters and Target Optical stores will be opened in the country today to achieve the desired retail size, and will also aim to restore "healthy growth" to LensCrafters SpotSpot, no longer relying on promotions to increase sales and maintain price stability.

Massimo Vian pointed out that March is a critical month after a sluggish January and February. He also revealed that the group as a whole started to gain momentum in mid-to-late February, and the group is now very optimistic about the coming weeks. Geographically, Europe is relatively solid and Asia is off to a very strong start to the year after a massive clean-up of Chinese distributors last year.

When asked about Kering SA (KER. PA) Kering has established its own eyewear business for its brands, and LVMH Mo?t Hennessy Louis Vuitton SE (LVMH. PA) LVMH Group is also interested in following suit, and whether this will pose a challenge to the eyewear agency business, Massimo Vian stressed the importance of scale, saying that the group has a strong presence in all channels of wholesale, retail and e-commerce, and can reach a level that cannot be achieved by the luxury group's own business.

Kering SA, Kering and LVMH Mo?t Hennessy Louis Vuitton SE The shift in strategy has dealt a serious blow to Luxottica Group SpA, Luxottica Group rivals Safilo Group SpA (SFL.MI). Safilo Group SpA, which owns LVMH SE's Dior, Celine, Fendi and Givenchy, has taken a stake in another major eyewear manufacturer and distributor, Marcolin SpA, after news broke in February that LVMH SE had taken a stake in Marcolin SpA, a major eyewear manufacturer, and a 24.2% drop over the past 52 weeks.

Luxottica Group SpA (MTA:LUX) closed at 49.50 euros on Thursday 2nd, down 1.8% for the day after the release of its full-year results. Piece brand glasses style.