LensCrafters 2010 Annual Report Download - page 44

ANNUAL REPORT 2010> 42 |
Net sales. Net sales increased by Euro 703.7 million, or 13.8 percent, to Euro 5,798.0 million in 2010 from Euro 5,094.3
million in 2009. Euro 281.1 million of such increase was attributable to the increased sales in the manufacturing and
wholesale distribution segment in 2010 as compared to 2009 and to increased sales in the retail distribution segment of
Euro 422.6 million for the same period.
Net sales for the retail distribution segment increased by Euro 422.6 million, or 13.5 percent, to Euro 3,561.6 million in
2010, from Euro 3,139.0 million in 2009. The increase in net sales for the period was partially attributable to a 4.4 percent
improvement in comparable store sales (11). In particular, we saw a 6.7 percent increase in comparable store sales (11) for the
North American retail operations, which was partially offset by a 10.6 percent decrease in comparable store sales for the
Australian/New Zealand retail operations. The positive effects from currency fluctuations between the Euro, which is our
reporting currency, and other currencies in which we conduct business, in particular the strengthening of the U.S. dollar and
the Australian dollar compared to the Euro, increased net sales in the retail distribution segment by Euro 237.2 million.
Net sales to third parties in the manufacturing and wholesale distribution segment increased by Euro 281.1 million, or 14.4
percent, to Euro 2,236.4 million in 2010 from Euro 1,955.3 million in 2009. This increase was mainly attributable to increased
sales of most of our house brands, in particular Ray–Ban and Oakley, and of some designer brands such as Chanel,
Ralph Lauren and Bvlgari. These sales volume increases occurred in most of the geographic markets in which the Group
operates. These positive effects were further increased by positive currency fluctuations, in particular a strengthening
of the U.S. dollar and Australian dollar and other minor currencies, including but not limited to the Brazilian Real, the
Canadian dollar and the Japanese Yen, which increased net sales to third parties in the manufacturing and wholesale
distribution segment by Euro 104.1 million.
In 2010, net sales in the retail distribution segment accounted for approximately 61.4 percent of total net sales, as compared
to approximately 61.6 percent of total net sales in 2009.
In 2010 and 2009, net sales in our retail distribution segment in the United States and Canada comprised 82.6 percent of
our total net sales in this segment. In U.S. dollars, retail net sales in the United States and Canada increased by 7.9 percent
to US$ 3,900.3 million in 2010, from US$ 3,614.5 million in 2009, due to sales volume increases. During 2010, net sales in
the retail distribution segment in the rest of the world (excluding the United States and Canada) comprised 17.4 percent
of our total net sales in the retail distribution segment and increased by 13.2 percent to Euro 619.6 million in 2010, from
Euro 547.3 million, or 17.4 percent of our total net sales in the retail distribution segment in 2009, mainly due to positive
currency fluctuation effects.
In 2010, net sales to third parties in our manufacturing and wholesale distribution segment in Europe were Euro 1,059.9
million, comprising 47.4 percent of our total net sales in this segment, compared to Euro 977.9 million, or 50.0 percent
of total net sales in the segment in 2009. The increase in net sales in Europe of Euro 82.0 million in 2010 as compared to
2009 constituted a 8.4 percent increase in net sales to third parties, due to a general increase in consumer demand. Net
sales to third parties in our manufacturing and wholesale distribution segment in the United States and Canada were US$
715.8 million and comprised 24.1 percent of our total net sales in this segment in 2010, compared to US$ 664.9 million,
or 24.4 percent of total net sales in the segment in 2009. The increase in net sales in the United States and Canada in
2010 compared to 2009, was primarily due to a general increase in consumer demand. In 2010, net sales to third parties
in our manufacturing and wholesale distribution segment in the rest of the world were Euro 636.5 million, comprising
28.5 percent of our total net sales in this segment, compared to Euro 500.7 million, or 25.6 percent of our net sales in this
segment in 2009. The increase of Euro 135.9 million, or 27.1 percent, in 2010 as compared to 2009, was due to the positive
effect of currency fluctuations as well as an increase in consumer demand.
Cost of sales. Cost of sales increased by Euro 227.6 million, or 12.9 percent, to Euro 1,990.2 million in 2010 from
Euro 1,762.6 million in 2009, essentially in line with the increase of net sales in the period. As a percentage of net sales,
cost of sales was at 34.3 percent and 34.6 percent in 2010 and 2009, respectively. In 2010, the average number of frames
produced daily in our facilities increased to approximately 235,000 as compared to approximately 208,000 in 2009, which
was attributable to increased production in all manufacturing facilities in response to an overall increase in demand.
(11) Comparable store sales refl ects the change in sales from one period to another that, for comparison purposes, includes in the calculation only stores open in the more recent period that
also were open during the comparable prior period in the same geographic area, and applies to both periods the average exchange rate for the prior period.