MILAN—Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX) reported consolidated net sales and preliminary results for the fourth quarter and the full fiscal year 2016 here. The total group’s reported net sales rose to €9,086 million, or an increase of 3.9 percent at constant exchange rates and of 2.8 percent at current exchange rates. Fourth quarter sales grew, compared to the third quarter, by 5.2 percent at constant exchange rates or 6.3 percent at current exchange rates.

Luxottica’s overall wholesale segment’s net sales were €3,528 million for the full year, a dip of 0.4 percent at constant exchange rates and a drop of 1.8 percent at current exchange rates. The company said the fourth quarter recovered from the third quarter but revenues were down in the period by 0.9 percent at constant exchange rates and at 0.1 percent at current exchange rates compared to the fourth quarter of 2015.

Luxottica’s retail segment’s net sales for the year were €5,558 million, an increase of 6.8 percent at constant exchange rates, and up 6.0 percent at current rates; fourth quarter accelerated from the prior third quarter with revenues up 8.9 percent at constant exchange rates and 10.1 percent at current exchange rates compared to the 2015 period.

The company’s statement noted that “2016 was a year of change for the group, as it carried out a number of initiatives to support the organizational simplification, efficiency and integration of its business, alignment of prices across markets and enhancement of its brand portfolio. In particular, the adoption of the "MAP policy” (Minimum Advertised Price) in North America has allowed the Group to strengthen the equity of its brands, enhance the quality of its distribution network and protect the business of wholesale customers.”

During the year, Luxottica also made investments in developing its manufacturing and logistical infrastructure, supporting the entry into new markets and strengthening digital communications.

The company said its key retail chains “continued to drive the industry's evolution toward innovative business models covering in-store, online and omnichannel, to offer consumers a more meaningful digital experience.” Sunglass Hut confirmed its position in the sun segment with revenue growth of 8.1 percent at constant exchange rates, while LensCrafters in North America strengthened its brand equity and reported a net sales (in U.S. dollars) increase of 1.3 percent.

In Australia, a review of the assortments in OPSM stores proved successful during the year, with a gradual improvement in comparable store sales. In Latin America, GMO maintained a solid growth trend. The group's e-commerce platforms in 2016 delivered excellent results, the company said, up by 24 percent at constant exchange rates, also citing the continued strong performance of Ray-Ban.com, Oakley.com and SunglassHut.com.

In the fourth quarter, the Wholesale division in North America benefited from the first positive effects of the "MAP policy” and the integration of the Oakley sports channel. In China, Luxottica continued the rationalization of its distribution network, terminating relationships with a number of local distributors.

"We are very pleased with the results of 2016, especially given that they were achieved in a year of major investments and initiatives to improve the quality of the company and we expect to report a higher net profit on a year-over-year adjusted basis", commented Leonardo del Vecchio, executive chairman, and Massimo Vian, CEO for product and operations of Luxottica Group.

In other news, Luxottica said it has reached an agreement with the current shareholders of Oticas Carol in Brazil to acquire 100 percent of the group, thereby expanding its presence in the optical franchise business with approximately 950 stores.

Established in 1997, Oticas Carol sells a broad range of prescription frames and sunglasses, with annual System sales of approximately €200 million. Luxottica noted that the Oticas Carol group had recently strengthened its management team and grown its retail footprint from approximately 500 stores in 2013 to its current total in 2016.

"Brazil is a great country, one we have believed in and operated in for 25 years,” said Del Vecchio, who added, "With this transaction, we take one step further in completing our vertically integrated business model, which has shown many benefits for all our consumers."

According to Ronaldo Pereira, CEO of Oticas Carol, "The transaction brings Carol to a whole new level. Our franchisees will belong to a global eyewear company, which brings them a greater sense of security to continue to grow and invest in our brand. Now we have all the necessary tools to move forward with our expansion plans.”

The transaction, valued at €10 million, remains subject to customary regulatory approvals and is expected to close in the first half of 2017. The transaction will mark Luxottica’s entry into the optical retail business in Brazil. Luxottica currently operates a network of Sunglass Hut stores in Brazil and has a solid presence through its wholesale business and a manufacturing plant in Campinas.