DE Rigo Spa (NYSE:DER)
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De Rigo: Announces Sales Results For The First Nine Months Of 2003
LONGARONE, Italy, Oct. 30 /PRNewswire-FirstCall/ -- De Rigo S.p.A. posted net
sales of EUR 387.8 m(1) in the nine months ended September 30, 2003, a 0.6%
decrease as compared with the same period last year. Overall sales were
negatively affected by the appreciation of the Euro against other currencies,
particularly with regard to the translation into Euro of sales made in Pounds
Sterling, Japanese Yen and Hong Kong Dollars. When calculated on a constant
exchange rate basis(2), De Rigo's consolidated net sales increased by 4.5%.
Highlights of the Group's unaudited sales results for the first nine months of
2003 include:
-- Consolidated net sales amounted to EUR 387.8 m, as compared with EUR
390.0 m posted during the same period last year.
-- Wholesale & manufacturing sales amounted to EUR 103.1 m, a decrease of
4.7% as compared with EUR 108.2 m during the first nine months of last
year, primarily reflecting softer sales results in certain European
markets and lower sales to Eyewear International Distribution ("EID"),
De Rigo's former joint venture with the Prada Group. Foreign currency
translation differences accounted for a decrease of 1.7% in the total
figure.
-- Sales through retail companies increased by 0.4% to EUR 276.1 m from
EUR 275.0 m during the same period last year. When calculated on a
constant exchange rate basis, sales through the retail companies
increased by 6.9%.
In this release, De Rigo is reporting net sales and revenues on a consolidated
basis, as well as sales for each of its three principal business segments during
all or a portion of the periods under review: wholesale & manufacturing, retail
and EID. In calculating its consolidated net sales and revenues, De Rigo has
eliminated the intercompany sales among the Group's business segments, as
detailed in the following table:
NET SALES BY BUSINESS SEGMENT (Euro in millions)
9M 2002 9M 2003 % 9M 2003 9M 2003 %
Reported Reported Change Effect of Sales at change
Sales Sales application constant
of constant exchange
exchange rate rates
(Non-GAAP)(3)
Wholesale &
Manufacturing 108.2 103.1 -4.7% 1.8 104.9 -3.0%
Retail 275.0 276.1 +0.4% 17.9 294.0 +6.9%
- D&A 181.0 176.0 -2.8% 17.9 193.9 +7.1%
- GO 94.0 100.1 +6.5% 0.0 100.1 +6.5%
EID(4) 20.9 19.8 -5.3% 0.0 19.8 -5.3%
Elimination of
Intercompany
Sales -14.1 -11.2 -20.6% 0.0 -11.2 -20.6%
Consolidated net
sales 390.0 387.8 -0.6% 19.7 407.5 +4.5%
Consolidated net sales
The Group's consolidated net sales of EUR 387.8 m for the first nine months of
2003 were broken down as follows: eyewear sales of EUR 184.9 m, lens sales of
EUR 109.4 m, contact lens sales of EUR 55.3 m, and other sales and revenues of
EUR 38.2 m, as compared with sales of EUR 186.6 m, EUR 106.4 m, EUR 56.8 m and
EUR 40.2 m, respectively, for the first nine months of last year.
Foreign currency translation differences had a negative effect on consolidated
net sales, particularly with regard to the translation into Euro of sales made
in Pounds Sterling, Japanese Yen and Hong Kong Dollar, as the average exchange
rates for these currencies during the first nine months of 2003 were less
favourable to the Group than those during the same period last year. When
calculated on a constant exchange rate basis, De Rigo's consolidated net sales
for the period increased by 4.5%.
Analysing consolidated net sales by geographic area, net sales in Europe
decreased by 2.0% to EUR 348.7 m, primarily as a result of the appreciation of
the Euro against the Pound Sterling. Net sales in the Americas increased by
5.6% to EUR 9.4 m, primarily due to higher unit sales in the US market. Net
sales in the Rest of the World increased by 17.9% to EUR 29.7 m, primarily as a
result of increased unit sales in the Far East region, the positive effects of
which were only partially offset by the unfavourable trend in Japanese Yen and
Hong Kong Dollar exchange rates.
The overall consolidated net sales results reflected the contribution of the
Group's principal business segments:
Wholesale & manufacturing
Wholesale & manufacturing sales amounted to EUR 103.1 m, a decrease of 4.7% as
compared with EUR 108.2 m posted in the same period last year. When calculated
on a constant exchange rate basis, the business segment's sales decreased by
3.0%
The decrease in wholesale & manufacturing sales was primarily due to a decline
in unit sales in certain European markets, primarily in Italy, as well as to
lower sales to EID.
Softer sales in certain European markets and to EID were partially offset by
strong growth in the Rest of the World area, where the segment posted a 20.6%
increase in sales. The increase was driven by very good results in the Far East
region that were primarily attributable to higher sales of the Group's
luxury/designer brands.
The Group is now marketing a new collection of sunglasses under its Police
brand, for which David Beckham, the English national team and Real Madrid
football star, will be the spokesman.
As previously reported, the Formula One world champion Michael Schumacher is the
spokesman for the Group's Sting brand in its world-wide marketing campaign.
Retail
Sales through the retail companies amounted to EUR 276.1 m, an increase of 0.4%
as compared with sales of EUR 275.0 m in the same period last year. When
calculated at constant exchange rates, net sales through the retail companies
increased by 6.9%.
The following table set forth retail net sales and store network by the Group's
two retail chains: Dollond & Aitchison ("D&A"), the Group's British retail
chain, and General Optica ("GO"), the Group's Spanish retail chain.
9M 2002 9M 2003
euro in millions euro in millions % Change
D&A 181.0 176.0 -2.8%
GO 94.0 100.1 +6.5%
Total Retail 275.0 276.1 +0.4%
30 Sep 02 30 Sep 03
Owned stores Owned stores Unit change
D&A 233 232 -1
GO 140 141 +1
Total Retail 373 373 --
30 Sep 02 30 Sep 03
Franchised stores Franchised stores Unit change
D&A 149 144 -5
GO 0 11 +11
Total Retail 149 155 +6
Sales at D&A grew by 7.1% in Pound Sterling terms, while same store sales per
working day increased by 7.3%. In Euro terms, D&A's sales totalled EUR 176.0 m,
a decrease of 2.8% as compared with sales of EUR 181.0 m posted in the same
period last year, reflecting the decline in the value of the Pound Sterling
against the Euro. Sales of franchised stores during the period amounted to EUR
56.7 m as compared with EUR 61.5 m last year; in Pound Sterling terms, sales of
franchised stores increased by 1.6%. The notable increase in D&A's sales in
Pound Sterling terms, which was achieved in a very difficult environment marked
by a decline in overall demand, was primarily attributable to D&A's aggressive
marketing activity and substantial improvements in the level of service provided
by the lens plants sold to BBGR, following the completion of their restructuring
process. At September 30, 2003, D&A operated a network of 232 owned shops and
144 franchised shops.
GO reported sales of EUR 100.1 m, an increase of 6.5% as compared to sales of
EUR 94.0 m in the same period last year. The 6.5% increase was achieved on top
of a 12.7% sales increase posted in the first nine months of 2002. Same store
sales per working day increased by 5.0%, on top of a 9.3% increase recorded in
the first nine months of 2002. Management believes that GO has continued to
gain market share in an essentially flat Spanish market, primarily as a result
of the opening of additional company-owned stores, the launch of its franchise
network and higher sales of sunglasses. At September 30, 2003, GO operated a
network of 141 owned shops and 11 franchised shops.
De Rigo is one of the world's largest manufacturers and distributors of premium
eyewear, the major optical retailer in Spain through General Optica, one of the
leading retailers in the British optical market through Dollond & Aitchison and
a partner of the LVMH Fashion Group for the manufacture and distribution of
Fendi, Givenchy, Loewe and Celine eyewear. De Rigo also manufactures and
distributes the licensed brands Etro, Fila, Furla, La Perla and Onyx and its own
brands Police, Sting and Lozza.
1 The Group reports its results in Euro. On October 29th, 2003, the
Euro/U.S. Dollar exchange rate, as fixed by the European Central Bank,
was EUR 1 = USD 1.1684. The financial results reported in this press
release have not been audited by the Group's independent public
accountants and are presented on the basis of accounting principles
generally accepted in Italy ("Italian GAAP").
2 For more details on these currency effects, including a reconciliation
of the constant exchange rate results to the Group's Italian GAAP sales
results, see the tables on page 2 of this release.
3 In addition to reporting its Italian GAAP results, the De Rigo Group
uses certain measures of financial performance that exclude the impact
of fluctuations in currency exchange rates in the translation of its
operating results into Euro. In doing so, the Group has calculated its
sales for the first nine months of 2003 on the basis of the same average
exchange rates used to calculate sales for the first nine months of
2002.
The Company believes that these non-GAAP financial measures provide
useful information to both management and investors by allowing a
comparison of sales performance on an exchange rate neutral basis. The
De Rigo Group's method of calculating sales performance excluding the
impact of changes in exchange rates may differ from methods used by
other companies.
4 As previously announced, on July 23, 2003, De Rigo sold its 51%
interest in EID, the former joint venture for the marketing and
distribution of Prada eyewear, to the Prada Group. As a consequence of
this transaction, EID is no longer one of De Rigo's business segments
and its results for the third quarter of 2003 have not been
consolidated in the De Rigo Group's results for that period.
Accordingly, the EUR 19.8 m in sales reported for the former segment
in the first nine months of 2003 only reflects EID's results for the
first six months of 2003, prior to the Group's sale of its interest. In
the third quarter of 2002, EID's net sales amounted to EUR 5.9 m.
DATASOURCE: De Rigo S.p.A.
CONTACT: Maurizio Dessolis, Chief Financial Officer of De Rigo S.p.A.,
+39-0437-7777, Fax: +39-0437-770727,