DE RIGO Announces Sales Results for the First Quarter of 2004
May 06 2004 - 7:00AM
PR Newswire (US)
DE RIGO Announces Sales Results for the First Quarter of 2004
LONGARONE, Italy, May 6 /PRNewswire-FirstCall/ -- De Rigo S.p.A.
posted net sales of EUR 139.2 m(1) for the first quarter of 2004, a
0.5% decrease as compared with the same period last year. The sales
results reflected positive trends in the Group's current
businesses, 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 net sales from the Group's results
for the first quarter 2003,(2) the period on period increase in
consolidated net sales was 6.1% at current exchange rates and 7.0%
at constant exchange rates.(3) Highlights of the Group's unaudited
sales results for the first quarter of 2004 include: - Consolidated
net sales amounted to EUR 139.2 m, as compared with EUR 139.9 m
posted in the first quarter of 2003. - Wholesale &
manufacturing sales grew by 1.9% to EUR 42.3 m from EUR 41.5 m
posted in the first quarter of 2003. Excluding net sales made by
the business segment to EID during the first quarter of 2003,
wholesale & manufacturing sales increased by 4.4%. Foreign
currency translation differences accounted for a decrease of 0.8%
in the total figure. - Sales through the retail companies increased
by 5.7% to EUR 99.9 m from EUR 94.5 m in the first quarter of 2003,
primarily as 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. When calculated on a constant exchange rate basis, sales
through the retail companies increased by 6.7%. In this release, De
Rigo is reporting net sales and revenues on a consolidated basis,
as well as sales for each of its principal business segments during
the periods under review. 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) 1Q 2003 1Q 2004 1Q
2004 1Q 2004 Net Net % change Effect of Sales at % application
constant Sales Sales of constant exchange change exchange rates
rates (Non-GAAP) Wholesale & 41.5 42.3 +1.9% 0.3 42.6 +2.7%
Manufacturing Retail 94.5 99.9 +5.7% 0.9 100.8 +6.7% - D&A 61.8
63.5 +2.8% 0.9 64.4 +4.2% - GO 32.7 36.4 +11.3% 0.0 36.4 +11.3%
Elimination of -4.8 -3.0 -37.5% 0.0 -3.0 -37.5% Intercompany Sales
Consolidated net sales excluding net sales through 131.2 139.2
+6.1% 1.2 140.4 +7.0% EID EID 8.7 0.0 0.0 0.0 Consolidated net
139.9 139.2 -0.5% 1.2 140.4 +0.4% sales Consolidated net sales The
Group's consolidated net sales of EUR 139.2 m were broken down as
follows: eyewear sales of EUR 65.6 m, lens sales of EUR 42.0 m,
contact lens sales of EUR 18.6 m and other sales and revenues of
EUR 13.0 m, as compared with sales of EUR 70.9 m, EUR 37.6 m, EUR
18.7 m and EUR 12.7 m, respectively, for the first quarter 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
(including the entire first quarter of 2003). As mentioned above,
excluding net sales through EID from the first quarter of 2003
results, consolidated net sales increased by 6.1% at current
exchange rates and by 7.0% at constant exchange rates. 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 Dollars, as the average exchange rates for these currencies in
the first quarter of 2004 were less favourable to the Group than
those during the first quarter of 2003. As shown in the table
above, foreign exchange rate translations had a negative effect of
0.9% on consolidated net sales. Analysing consolidated net sales by
geographic area, net sales in Europe increased by 2.0% to EUR 126.6
m, primarily as a result of higher net sales through the retail
companies and increased wholesale sales in certain markets. Net
sales in the Americas decreased to EUR 2.5 m from EUR 3.2 m,
primarily as a result of the deconsolidation of EID. Net sales in
the Rest of the World decreased to EUR 10.1 m from EUR 12.6 m,
primarily as a result of the deconsolidation of EID and lower sales
in certain Middle and Far East markets not served by distribution
subsidiaries that were partially offset by the very positive
results posted by the Group's distribution subsidiaries located in
the Far East region. The overall consolidated net sales results
reflected the contribution of both of the Group's principal
business segments: Wholesale & manufacturing Wholesale &
manufacturing sales grew by 1.9% to EUR 42.3 m from EUR 41.5 m
posted in the first quarter of 2003. Excluding net sales made by
the wholesale & manufacturing business segment to EID from the
first quarter of 2003 results, net sales increased by 4.4% at
current exchange rates and by 5.2% at constant exchange rates, as
shown in the following table: 1Q 2003 1Q 2004 1Q 2004 1Q 2004 Net
Net % change Effect of Sales at % application constant change Sales
Sales of constant exchange exchange rates rates (Non-GAAP)
Wholesale & 41.5 42.3 +1.9% 0.3 42.6 +2.7% Manufacturing sales
- of which sales -1.0 0.0 0.0 0.0 to EID Wholesale &
Manufacturing sales excluding 40.5 42.3 +4.4% 0.3 42.6 +5.2% net
sales to EID When calculated on a constant exchange rate basis, the
business segment's sales increased by 2.7%. The increase in
wholesale & manufacturing sales was primarily due to very
strong sales results posted by the Group's in certain Far East
markets, particularly Japan and Hong Kong, as well as in several
European markets including France, Greece, Germany and Spain.
Retail Sales through the retail companies increased by 5.7% to EUR
99.9 m from EUR 94.5 m posted in the first quarter of 2003. When
calculated on a constant exchange rate basis, net sales through the
retail companies increased by 6.7%. 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. 1Q 2003 1Q 2004 31 Mar 31Mar 31 Mar 03 31 Mar 04 03 04 EUR
in EUR in % Owned Owned Unit Franchised Franchised Unit millions
millions Change stores stores change stores stores change D&A
61.8 63.5 +2.8% 233 232 -1 145 143 -2 GO 32.7 36.4 +11.3% 140 143
+3 7 14 +7 Total 94.5 99.9 +5.7% 373 375 +2 152 157 +5 Retail Sales
at D&A grew by 4.2% in Pound Sterling terms, while same store
sales per working day increased by 5.1%. In Euro terms, D&A's
sales grew to EUR 63.5 m, an increase of 2.8% as compared with
sales of EUR 61.8 m posted in the first quarter of 2003, reflecting
the decline in the value of the Pound Sterling against the Euro.
Sales of franchised stores during the period grew by 1.7% to EUR
17.6 m; in Pound Sterling terms, sales of franchised stores
increased by 3.5%. The increase in D&A's sales was primarily
attributable to the Company's continuing aggressive marketing
campaigns driving increased sales of higher quality products. At
March 31 2004, D&A operated a network of 232 owned shops and
143 franchised shops. GO grew sales by 11.3% to EUR 36.4 m from the
EUR 32.7 m posted in the first quarter of 2003. GO continued to
achieve notable net sales gains as a result of a 8.4% same store
sales per working day increase as well as the expansion of its
owned and franchised store network. At March 31, GO operated a
network of 143 owned shops and 14 franchised shops, having opened a
net total of 3 owned shops and 7 franchised shops during the last
twelve months. Ennio De Rigo, Chairman of the De Rigo Group,
commented on the first quarter sales results: "We are very pleased
with the Group's sales results, which confirm the positive trend of
last year at both the retail and the wholesale & manufacturing
business segments. The sale of our interest in EID allowed us to
increase our focus on the existing brand portfolio and on the
selection of new business opportunities." On May, 5 the annual
shareholder meeting was held at the Group's headquarters in
Longarone, Italy. The main resolutions of the meeting were the
following: - The shareholders approved De Rigo's consolidated
Italian GAAP financial statements for 2003, which showed an
increase of 74.5% in consolidated net income to EUR 18.5 m and a
substantial reduction in net financial debt to only EUR 3.6 m. -
The number of the members of the Board of Directors was increased
from six to seven. Maurizio Dessolis, the Group's Chief Financial
Officer, and Massimo De Rigo, the Group's Head of the Design
Department, were elected as Directors and also named as the Group's
Vice-Chairmen. - De Rigo's shareholders authorized an extension of
the existing share repurchase program for an additional 18 months.
As a result, the Company is authorized to repurchase up to
4,400,000 of its ordinary shares (in the form of shares or American
Depositary Shares) for a period of 18 months, through November
2005. The authorization requires that repurchases be made at a
price not greater than 10% more than, and not lower than 10% less
than, the official closing price of the Company's American
Depositary Shares on the New York Stock Exchange on the trading day
preceding any repurchase. - The shareholders also modified certain
provisions of De Rigo's articles of association in order to reflect
recent changes in Italian law. 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 Celine, Fendi, Givenchy and Loewe
eyewear. De Rigo also manufactures and distributes the licensed
brands Etro, Fila, Furla, La Perla, Mini and Onyx and its own
brands Police, Sting and Lozza. 1) The Group reports its results in
Euro. On May 4th, 2004, the Euro/U.S. Dollar exchange rate, as
fixed by the European Central Bank, was EUR 1 = USD 1.2061. 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 on page 2 and page 3 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 quarter of 2004 on the
basis of the same average exchange rates used to calculate sales
for the first quarter 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 on
page 2 and page 3 of 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:
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