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Oakley Sales Stay Strong in Third Quarter

Published October 28, 2008

MILAN, Italy (BRAIN)— Oakley sales rose 16 percent in the third quarter of 2008, helping to boost parent company Luxottica during difficult economic conditions.

Luxottica released earnings for the period ending September 30 during a conference call on Tuesday morning.

Luxottica reported sales of 1.2 billion euro during the third quarter compared with 1.15 billion euro from the third quarter of 2007. Net income was down 7 percent. Year-to-date, Luxottica is up 5 percent in net sales and down 13.8 percent in net income.

In the third quarter, Oakley saw double-digit growth in its optics and apparel, footwear and accessories categories in both the U.S. and international markets, led by Australia, Brazil Canada and Japan, said Scott Olivet, chief executive officer of Oakley.

In the U.S., the wholesale and retail channels performed very well and above market trends, Olivet said. The wholesale channel was led by sales in military/law enforcement, e-commerce, lifestyle accounts, department stores and LensCrafters and Sunglass Huts shops.

The strong results are driven by performance across its key initiatives including growth in retail doors and in women’s, customized and polarized eyewear. The latter two products are key particularly during challenging times, Olivet said.

“When you can’t rely on more consumers coming into more wholesale or retail doors you need to take advantage of every consumer that does walk in the door and we think with our polarized products as by far and away the best technology in the industry and the ability to drive a higher average sale price as we move more consumers to polarized, and custom as another example of where we’re bringing something different,” he said.

Oakley’s custom business grew more than 50 percent in the third quarter, thanks in part to heavy exposure by Oakley athletes during the Beijing Olympics, and now represents 50 percent of sunglass sales through Oakley’s Web site, Olivet said.

“Although we’ve been outperforming for the quarter, as with everybody else, we are cautious with Q4 and are trying to position ourselves appropriately and be flexible so that we can react as need be,” Olivet said.

As the company looks ahead to the fourth quarter, Oakley plans to continue to drive the top line with its premium products and technical outerwear; drive the category of sales for products that are a piece of equipment, like goggles and military eyewear, and the consumer is less likely to be sensitive to the macroeconomics; continue to leverage the e-commerce platform as consumers are less likely to go to the mall with higher gas prices; and shift its marketing as close to consumers as possible with events and in-store promos rather than advertising.

—Nicole Formosa

Topics associated with this article: Earnings/Financial Reports

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