Luxottica: US business: no slowdown expected in Q4, pick-up expected in the coming months?
BUY, Fair Value EUR44 (+23%)
Considering the weight of North America (58% of sales) for Luxottica, we understand that investors were worried about a possible deteriorating consumer spending within the context of US Shutdown negotiations. However, Luxottica is currently not witnessing any slowdown in either Wholesale or Retail (Rx still flattish, strong sunglass). Furthermore, recent macro numbers and the US Congress deal to set spending levels until 2015 may bode well for a pick-up in consumption for optical products. For 2014, Luxottica should reiterate its traditional “rule-of-thumbs” (HSD growth and EBIT growth 2x sales increase at constant FX), which should reassure investors.
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