MILAN (BRAIN) — Luxottica Group's first half profits fell and the company has pulled back on its forecasts for the remainder of the year. The company did say it is continuing to integrate Oakley's wholesale and retail channels with the rest of the group's operations, a project that has cost about 66 million euros ($73 million) so far.
The Oakley integration included about 160 job cuts at the brand's California headquarters last year. Luxottica said the integration of Oakley's optical market business is complete and has been successful; it now plans to integrate the sports business by the end of this year.
The company also noted that putting a minimum advertised price policy in place for its biggest brand, Ray-Ban, contributed to lower retail sales of the brand in North America. The MAP policy made genuine Ray-Ban products appear more expensive compared to knock-offs. Nevertheless, the company said the MAP is "a necessary action to protect the equity of Luxottica's proprietary brands and the integrity of the distribution network."
Oakley has had a MAP in place since before Luxottica bought the brand in 2007.
The group said poor weather in the spring in North America and uncertain markets internationally contributed to the softening and the scaled-back forecasts.
Luxottica's adjusted first half sales were 4.828 billion euros at constant exchange rates. Profits were 892 million euros, down 2.5 percent from last year.
The group is now forecasting sales growth of 2-3 percent at constant exchange rates for the second half, about half the growth rate it had previously forecast.
Luxottica is publicly traded on the New York Stock Exchange under the symbol LUX. Its stock performance is tracked on the BRAIN stock chart.
