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  • Reuters

Safilo misses 2018 sales target despite fourth quarter upturn

(Reuters) - Italian eyewear-maker Safilo missed its full-year sales target for 2018 despite an upturn in fourth quarter revenues but sees core profit at the higher end of its range.

The company posted on Wednesday full-year sales of 962.9 million euros ($1.10 billion), a decline of 4 percent at constant currencies and worse than the company’s target of a three-percent drop.

Fourth-quarter sales rose 1.3 percent at constant currencies to 249.1 million euros.

Poor sunglasses sales in Europe and ongoing weakness in North American department stores hit second- and third- quarter revenue.

Sales in emerging markets also turned negative in the third quarter due to a challenging comparison base.

“Safilo expects that the cost saving program executed in the second half of the year will allow the Group to close the year with an adjusted EBITDA margin close to 5 percent,” it said.

In recent years luxury groups have moved away from the traditional licensing model with eyewear producers, taking away from Safilo some of its profitable licenses.

French luxury goods group Kering set up its own eyewear business to better control distribution and pocket rich profit margins.

Dior-owner LVMH bought a 10 percent stake in eyewear-maker Marcolin in 2017, ending its Celine accord with Safilo and putting Safilo’s other LVMH brand licenses at risk.

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