LensCrafters 2004 Annual Report Download - page 64

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MANAGEMENT’S DISCUSSION AND ANALYSIS
63
The following table briefly summarizes the statements
of consolidated income for the twelve-month periods
ended December 31, 2003 and 2004, including the
incidence of the individual entries on net sales:
MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATING RESULTS FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2004
Net sales
Cost of sales
Operating expenses
General, administrative, sales
and advertising expenses
Income from operations
Other income/(net expenses)
Pre-tax income
Income taxes
Minority interests
Net income
2,852,194
903,617
1,948,577
1,516,790
431,787
(41,994)
389,793
117,328
5,122
267,343
100.0%
31.7%
68.3%
53.2%
15.1%
1.5%
13.7%
4.1%
0.2%
9.4%
3,255,300
1,040,697
2,214,603
1,721,789
492,814
(35,661)
457,153
161,665
8,614
286,874
100.0%
32.0%
68.0%
52.9%
15.1%
1.1%
14.0%
5.0%
0.3%
8.8%
In thousands of Euro
Year ended December 31 2003 2004
NET SALES
In 2004 Luxottica Group’s net sales rose 14.1%, to
Euro 3,255.3 million, from Euro 2,852.2 million for
2003.
Retail sales at LensCrafters, Sunglass Hut, OPSM
Group and Cole National increased 15.7% to Euro
2,346.7 million in 2004, compared with Euro 2,028.2
million last year.
This increase was attributable to higher volume,
compared with 2003, of product sales in the
premium-priced segment resulting from the
consolidation of Euro 240.5 million of Cole
National’s fourth quarter of 2004 sales; and results
for OPSM Group for a total of seven months more
than the preceding fiscal year, for a total of Euro
172.5 million. Cole National’s results included sales
of the Things Remembered chain, for a total of Euro
75.7 million in the fourth quarter of 2004. The impact
of the depreciation of the U.S. Dollar against the
Euro on sales of Luxottica Retail North America, the
Group’s retail division in North America, was Euro
204.8 million. The continued depreciation of the
U.S. Dollar in the months following the end of the
fiscal year 2004 is expected to continue to
negatively impact the Group’s results in Euro during
the course of 2005.
Wholesale sales to third party clients for 2004 were
up 10.3% to Euro 908.6 million, compared with Euro
824.0 million in 2003. This increase was primarily