MILAN—Citing the benefit of new strategies, Luxottica Group S.p.A. (MTA:LUX) reported Monday that group net sales rose 1.8 percent to €4.9 billion (at constant exchanges rates) and adjusted net income increased 3.5 percent to €567 million in the first half ended June 30.

Luxottica also noted that its free-cash flow of €535 million in the first half of 2017 represented a record amount and follows the previous record of €403 million set in the year-ago first half (2016).

On a conference call with financial analysts following the release of its first-half financial statement, Luxottica CEO for product and operations Massimo Vian and chief financial officer Stefano Grassi noted that they are “proud of the results” and that the company is “progressing at the right speed on our initiatives.” In “light of the results of the first six months,” Luxottica also confirmed its previous outlook for sales and earnings this year.

Separately, Luxottica is moving ahead on its plans to merge with Essilor later this year and Essilor shareholders already have voted to approve the merger, as VMail reported. See related news story about the merger in VMail today.

Leonardo Del Vecchio, executive chairman of Luxottica, noted in Monday’s financial announcement that he was “very pleased with the results.” In the announcement, he said, “The new strategies and the reorganization of the Group are already producing expected results: increased sales, accelerating profitability and strong cash generation.”

While both the retail and wholesale divisions achieved “sustained profitability” in the first half, Luxottica noted that the retail division posted sales of €2.94 billion, an increase of 4.0 percent at constant exchange rates. First-half sales across the wholesale division slipped 1.2 percent at constant exchange to €1.981 billion.

Luxottica attributed its improved retail performance to a new strategy of focusing on service quality and brand equity, including a strong reduction of in-store promotions and discounts. “New stores, optical retail results in all geographies, Ray-Ban stores in China and the consolidation of Salmoiraghi & Vigano in Europe contributed to the positive performance in the period,” Luxottica’s statement noted.

In addition, Sunglass Hut’s sales rose 1 percent in the second quarter “despite a reduction in store count designed to improve geographic allocation and promote store productivity.”

In North America, a focus on “in-store execution, quality of service, and Omni channel experiences began to pay off with improved comparable-store sales and profitability in all retail brands,” Luxottica noted. Sales in the North American retail division slipped 1.4 percent at constant exchange rates in the first half.

At LensCrafters, Luxottica said that “new training and incentive tools for the sales staff, the new store-showroom format and an offer of more digital and personalized lenses” are expected to be the cornerstones of “transformation and growth of the retail brand.”

The statement added, “While comparable-store sales for both LensCrafters and Sunglass Hut were negative in the first half, both showed an improvement in the second quarter.”

For the first half, LensCrafters stores in North America posted a decline of 2.1 percent in comparable-store sales, with an improvement to negative 1.2 percent in the second quarter. Comparable-store sales at “licensed brands” in North America fell 2.9 percent on a same-store basis in the six-month period, and improved to negative 1.2 percent in the second quarter, according to the Luxottica financial statement.

The wholesale business in North America achieved a sales gain of 0.5 percent in the first half (as constant exchange), which Luxottica attributed to “sales to independent opticians and key accounts that have more than offset the weakness of the department store and sports channels.” However, the company noted that its MAP policy continues to impact sales to online operators, “but over the course of the year it has resulted in a sharp reduction in the average discount applied by third-party e-commerce platforms and supported the growth of the optical business.”

North America wholesale operations saw sales increase 4.6 percent in the second quarter at constant exchange.

Innovation drove the growth of proprietary e-commerce platforms (+6 percent in sales at constant exchange rates) and in particular of Ray-Ban.com, a symbol of excellence for the world's eyewear industry, with new user experiences, improved customization and service levels, an evolution of its Virtual Try-on technology and the launch of exclusive collections online, the company reported.