MILAN, Italy—Luxottica Group (NYSE: LUX) reported strong sales in both its retail and wholesale business for the third quarter and nine months ending Sept. 30, 2015. The company’s management also stated that the group’s results year to date confirms the 2015 outlook and that the strong trend is expected to continue, adding that “the opportunities offered by the industry, coupled with our investment plan, allow us to confirm our objective of doubling sales over the next 10 years.”

Luxottica reported net sales for the group rising 15.4 percent to €2.2 billion, while adjusted net income was reported up by 21 percent to €209 million. The company also said it generated a record free cash flow of €396 million, an increase of 25 percent.

Luxottica reported that its overall wholesale division’s net sales rose by 10.1 percent (6.8 percent at constant exchange rates) to €826 million for the quarter. Overall retail division net sales climbed 18.8 percent (4.7 percent at constant exchange rates) to €1.4 billion for the quarter.

The company said, “Solid demand for the latest sun collections in North America and Europe, Sunglass Hut and LensCrafters’ buoyant performance and the continued expansion in new markets were the biggest contributors in the quarter. The group continues to use speed and flexibility to achieve its strategic objectives and to benefit and drive the structural growth of the global eyewear market.”
For the nine months ending Sept. 30, Luxottica posted net sales year-to-date of approximately €7 billion, representing a 19.7 percent increase on a year-over-year basis. The pursuit of efficiencies and cost management helped Luxottica improve operating margins while adjusted net income grew by 29.7 percent to €734 million.

"There is vast opportunity across the board for our business,” commented Adil Khan and Massimo Vian, CEOs of Luxottica Group. “Our eyewear collections, which continue to be among the most loved and sought-after by consumers around the world, together with the customer service we provide, drove wholesale’s positive performance during the quarter. Similarly, our retail business performed well with Sunglass Hut continuing to shine in the Americas, Europe and Australia, while strong performance from LensCrafters in North America helped to counter the weakness experienced in Australia and Hong Kong.”

North America has proven to be one of the key growth engines for the group, executives said, with adjusted net sales increasing by 22.8 percent (+4.5 percent at constant exchange rates) in the third quarter. Wholesale North America saw growth of 7 percent at constant exchange rates in the quarter. Retail posted excellent results with year-over-year comparable sales growth of 4.5 percent, supported by the performance of Sunglass Hut, whose comp sales accelerated to 7.8 percent compared to the first half of 2015, and LensCrafters, posting an increase in comp sales by 3.8 percent compared to the first half of 2015. “The two brands benefitted from their superior levels of service, the capability of their store networks and their ability to anticipate the ever-changing needs and tastes of consumers,” the company said.

Europe was cited, along with North America, as another key engine of Luxottica’s net sales growth. Sales improved in the quarter, rising 8.9 percent overall and double digits in certain countries such as Italy, Spain, Germany and the U.K. The results were enhanced by a strong summer season, the effectiveness of the distribution network and the increased penetration of the STARS program, which improves the clients’ product assortment and levels of service among independents, the company noted. The Retail division sales were up 18.6 percent in the period, benefitting particularly from strong results of Sunglass Hut in Continental Europe.

Asia-Pacific sales were up 3.2 percent in the third quarter with double-digit growth in India and Korea and a solid contribution from Japan. The Chinese market showed a temporary slowdown due to the combined effect of the previously announced price harmonization program and the negative economic environment in Hong Kong. However, China is among the countries with the highest growth potential and currently represents only 3 percent of Luxottica’s aggregate net sales. October portfolio orders and the planned expansion of Sunglass Hut, with a network of 20 locations in Mainland China, leads Luxottica to be optimistic on its growth opportunities in the country, with a strong recovery in volumes anticipated in the coming months.

During the third quarter, Sunglass Hut entered the Thai market with five stores and another 10 openings are planned before year’s end. Sunglass Hut also posted double-digit growth in comps in Australia as compared to the third quarter of 2014, where the re-alignment of OPSM’s optical strategy is in progress.

During the third quarter of 2015, Luxottica confirmed its strong growth trend in Latin America, notwithstanding the devaluation of the Brazilian Real. Sales in the region increased by 13.6 percent at constant exchange rates, mainly due to the success of the “Made in Italy” collection in Brazil, continuous growth in Mexico and encouraging results in Chile and Colombia, where the wholesale division opened two local subsidiaries earlier in the year. In retail, GMO and Sunglass Hut recorded strong comps growth as compared with the third quarter of 2014.

In a call with analysts, Khan noted that the Oakley integration was now complete. He mentioned that the Olympics in 2016 bode well for Oakley’s visibility and continued growth. Vian also cited the company’s accelerating investments to strengthen its platform for long-term growth, including such factors as product innovation and process efficiency, a “disciplined store footprint expansion and improvement, starting the five-year investment plan for a total of €1 billion and continued synergies between brick and mortar and online.”