DE Rigo Spa (NYSE:DER)
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De Rigo Announces Sales Results for the First Nine Months of 2004
LONGARONE, Italy, November 4 /PRNewswire-FirstCall/ -- De Rigo S.p.A.
(NYSE:DER) posted net sales of EUR 395.8 m(1) for the first nine months of
2004, an increase of 2.1% as compared with the same period last year.
The Group's current businesses continued to perform very positively, as
comparisons with the prior year were affected by De Rigo's sale during July
2003 of the controlling interest in Eyewear International Distribution ("EID"),
a joint venture with the Prada Group. Excluding EID's sales from the Group's
results for the first nine months of 2003,(2) the period on period increase in
consolidated net sales was 7.6%.
Highlights of the Group's unaudited sales results for the first nine months of
2004 include:
- Consolidated net sales increased by 2.1% to EUR 395.8 m, as compared with EUR
387.8 m posted in the first nine months of 2003. Foreign currency effects
accounted for 1.5 percentage points of the overall increase in consolidated net
sales.(3)
- Wholesale & manufacturing sales grew by 1.3% to EUR 104.4 m from EUR 103.1 m
posted in the first nine months of 2003. Excluding sales made to EID during the
first nine months of 2003 from the comparison, the segment's sales increased by
3.9%.
- Sales through the retail companies increased by 8.3% to EUR 299.0 m from EUR
276.1 m in the first nine months of 2003, primarily as a result of positive
same store sales growth at both General Optica ("GO"), the Group's Spanish
retail chain, and Dollond & Aitchison ("D&A"), the Group's British retail
chain.
In this release, De Rigo is reporting net sales and revenues on a consolidated
basis, as well as sales for each of its two principal business segments. In
calculating its consolidated net sales and revenues, De Rigo has eliminated the
intercompany sales between the Group's business segments, as detailed in the
following table:
NET SALES BY BUSINESS SEGMENT
(Euro in millions)
9M 2003 9M 2004 9M 2004 9M 2004
Net Net % change Effect of Sales at %
Sales Sales application constant change
of constant exchange
exchange rates
rates (Non-GAAP)
Wholesale & 103.1 104.4 +1.3% 0.1 104.5 +1.4%
Manufacturing
Retail 276.1 299.0 +8.3% -5.7 293.3 +6.2%
- D&A 176.0 191.5 +8.8% -5.7 185.8 +5.6%
- GO 100.1 107.5 +7.4% 0.0 107.5 +7.4%
Elimination of -11.2 -7.6 -32.1% 0.0 -7.6 -32.1%
Intercompany Sales
Consolidated net 368.0 395.8 +7.6% -5.6 390.2 +6.0%
sales excluding
sales through EID
EID 19.8 0.0 0.0 0.0
Consolidated net 387.8 395.8 +2.1% -5.6 390.2 +0.6%
Sales
Consolidated net sales
The Group's consolidated net sales of EUR 395.8 m were broken down as follows:
eyewear sales of EUR 175.4 m, lens sales of EUR 123.9 m, contact lens sales of
EUR 58.5 m and other sales and revenues of EUR 38.0 m, as compared with sales
of EUR 184.9 m, EUR 109.4 m, EUR 55.3 m and EUR 38.2 m, respectively, for the
first nine months of 2003.
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, though its results were consolidated
in the De Rigo Group's results for the period through the date of its sale. As
mentioned above, if one excludes sales through EID during the portion of 2003
prior to its sale from the period on period comparison, the Group's
consolidated net sales increased by 7.6%.
Foreign currency translation differences had a positive effect on consolidated
net sales, particularly with regard to the translation into Euro of sales made
in Pounds Sterling, as the average exchange rate for this currency in the first
nine months of 2004 was more favourable to the Group than that during the first
nine months of 2003. This increase in the relative value of the British
currency more than offset a decline in the average Euro exchange rates for
Japanese Yen and Hong Kong Dollars. As shown in the table above, foreign
exchange rate differences had a positive effect of 1.5 percentage points on
consolidated net sales.
Analysing consolidated net sales by geographic area, net sales in Europe
increased by 3.2% to EUR 359.7 m, primarily as a result of higher net sales
through the Group's retail companies. Net sales in the Americas decreased to
EUR 5.7 m from EUR 9.4 m, primarily as a result of the deconsolidation of EID.
Net sales in the Rest of the World increased by 2.4% to EUR 30.4 m, as the
impact of the deconsolidation of EID was more than offset by very positive
results posted by the Group's Far Eastern distribution subsidiaries.
De Rigo's overall consolidated net sales results reflected the contribution of
each of the Group's principal business segments:
Wholesale & manufacturing
Wholesale & manufacturing sales grew by 1.3% to EUR 104.4 m from EUR 103.1 m
posted in the first nine months of 2003.
Excluding net sales made by the wholesale & manufacturing business segment to
EID prior to its sale from the results for the first nine months of 2003, the
segment's sales increased by 3.9% (4.0% at constant exchange rates), as
detailed in the table below:
9M 2003 9M 2004 9M 2004 9M 2004
Net Net % change Effect of Sales at %
Sales Sales application constant change
of constant exchange
exchange rates
rates (Non-GAAP)
Wholesale & 103.1 104.4 +1.3% 0.1 104.5 +1.4%
Manufacturing
sales
- of which sales -2.6 0.0 0.0 0.0
to EID
Wholesale & 100.5 104.4 +3.9% 0.1 104.5 +4.0%
Manufacturing
sales excluding
net sales to EID
The increase in wholesale & manufacturing sales was primarily due to very
strong sales results in certain Far East markets, particularly Japan and Hong
Kong, as well as in several European markets, including Greece, Spain and
Germany.
Retail
Sales through the retail companies increased by 8.3% to EUR 299.0 m from EUR
276.1 m posted in the first nine months of 2003.
The following table sets forth certain data on the sales and store network of
De Rigo's two retail chains: D&A, one of the leading retailers in the British
optical market and GO, the leading retailer in the Spanish optical market.
9M 2003 9M 2004
EUR in EUR in %
millions millions change
D&A 176.0 191.5 +8.8%
GO 100.1 107.5 +7.4%
Total Retail 276.1 299.0 +8.3%
30 Sep 03 30 Sep 04
Owned Owned Unit
stores stores change
D&A 232 231 -1
GO 141 147 +6
Total Retail 373 378 +5
30 Sep 03 30 Sep 04
Franchised Franchised Unit
stores stores Change
D&A 144 141 -3
GO 11 15 +4
Total Retail 155 156 +1
D&A's sales grew to EUR 191.5 m, an increase of 8.8% as compared with sales of
EUR 176.0 m posted in the first nine months of 2003. Sales grew by 5.6% in
Pound Sterling terms, reflecting the increase in its value against the Euro,
while same store sales per working day increased by 6.5%. Sales of franchised
stores during the period grew by 7.0% to EUR 52.2 m; in Pound Sterling terms,
sales of franchised stores increased by 3.7%. The increase in D&A's sales
during the first nine months was primarily attributable to the Company's
aggressive marketing campaigns, which drove increased sales of higher quality
products. At September 30, 2004, D&A operated a network of 231 owned shops and
141 franchised shops.
GO grew sales by 7.4% to EUR 107.5 m from the EUR 100.1 m posted in the first
nine months of 2003. GO's continuing to record notable sales gains reflected a
5.6% increase in same store sales per working day as well as the expansion of
its owned and franchised store network. At September 30, 2004, GO operated a
network of 147 owned shops and 15 franchised shops, having opened a net total
of 6 owned shops and 4 franchised shops during the last twelve months.
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
Givenchy, Celine and Loewe eyewear. De Rigo also manufactures and distributes
the licensed brands Escada, Etro, Fila, Furla, La Perla, Mini and Onyx and its
own brands Police, Sting and Lozza.
References:
1. The Group reports its results in Euro. On November 3rd, 2004, the Euro/U.S.
Dollar exchange rate, as fixed by the European Central Bank, was EUR 1 = USD
1.2754. 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. Tables detailing the Group's consolidated Italian GAAP sales results and
those of its wholesale & manufacturing business segment excluding sales made by
or to EID are provided above in 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 2004 on the basis of the same average exchange rates used
to calculate sales for the first nine months of 2003. 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. See the tables above in this release.
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.
DATASOURCE: De Rigo S.p.A.
CONTACT: For further information, please contact: Maurizio Dessolis,
Chief Financial Officer, Tel +39-0437-7777, Fax
+39-0437-770727, e-mail: