Once again, the company has seen excellent demand across all product categories, including optics, footwear, and accessories such as watches. In fact, it hasn't been one product segment, geographic area, or retail channel that has driven Oakley's sales higher -- it's been all them of them working in concert. Luxxotica's purchase of Oakley, however, makes it clear that the focus is returning to the core business of selling glasses, with the other areas serving a more complementary role.
Organic growth made up 19% of the quarter's sales increase, while Oakley's acquisition of ESS and Bright Eyes contributed the remaining 6%.
At 22 times trailing earnings, Luxxotica's stock doesn't trade at much of a premium. (Oakley's rich valuation, by comparison, prices in the amount that its soon-to-be parent is paying for it.) Yet by bringing Oakley into line with its Pearle Vision and LensCrafters offerings, Luxxotica arguably has a reason to sport higher multiples, even on a forward basis. It's going to have a lot more opportunities to move Oakley's "glass-wares."
If it's smart, Oakley won't try to move its footwear segment beyond a niche market. Going up against the likes of Nike and Adidas has not been a good fit for it in the past, but using footwear and apparel for brand-extension purposes can certainly help contribute to the bottom line.
Unless something trips it up at the end of the race, Oakley appears to have it made in the shade with Luxxotica.
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