Luxottica management cautious after profit drop

Last year’s results, which come on the back of a proposed merger with fellow optical heavyweight Essilor, were due in part to rising investments, corporate restructuring and slower growth in sales.Investments rose by nearly 30% in 2016 to euro 650 million ($AU$906.8 m) as Luxottica added a net 300 stores, while a payout to former CEO Adil Mehboob-Khan – who left after just one year in the job – also affected the bottom line.{{quote-A:R-W:450-I:2-Q: We’re going to open more LensCrafters and Target stores in the US this year as we approach our desired retail size and there are a number of ongoing projects that have an impact on the top line when growth is not explosive, -WHO:Mr Massimo Vian, CEO of Luxottica}}Luxottica CEO Mr Massimo Vian said the company’s outlook incorporated “a degree of cautiousness”, after company forecasts indicated low to mid single-digit revenue growth at constant currencies and an adjusted operating profit increase of between 0.8 to 1.0 times rise in sales.“We’re going to open more LensCrafters and Target stores in the US this year as we approach our desired retail size and there are a number of ongoing projects that have an impact on the top line when growth is not explosive,” Vian also told Reuters.“March is the key month, we’re moderately optimistic,” he added. “We’re holding up well in Europe, [but] LensCrafters must do well in March.”Revenue slowed down last year due to weak consumer spending in its biggest market, the United States, and managent restructuring by founder Mr Leonardo del Vecchio in 2014. Del Vecchio also reduced discounts for online purchases of top-seller Ray Ban sunglasses.According to Vian, Luxottica performed well in the European market last year and saw promising results in January and mid-February. The company also recently increased shareholder dividends by 3.4%, or euro 0.92 (AUD$1.28) per share, compared with 2016.