Morningstar Rating

Stock Research and Analysis

by Paul Swinand

Bulls Say

Luxottica is the largest eyewear manufacturer and retailer in the world, giving it economies of scale and scope that will enable it to make consistently high returns on capital.
Luxottica's sun brands are hard to copy. Oakley and Ray-Ban will not be easily displaced as the leading brands in North America, and have growing loyalty in the world.
Global distribution and a large retail store base allow Luxottica to keep competitors at a disadvantage, as any new entrant would have to consider using some of Luxottica's retail network if it were to reach the scale needed to compete. Read more 

Bears Say

While global demand for eyewear should increase with growth in consumer classes, progress could be slow.
Luxury trends can change quickly, and investors should be careful not to mistake fashion trends for long-term competitive advantage. The hot brand in luxury eyewear today could be a slow grower in the future.
As a global marketer, Luxottica has exposure to local economic and political conditions, import restrictions, and currency exchange rate fluctuations. In the U.S., Luxottica is a partner with Sears, which has struggled to maintain same-store sales and store traffic levels. Read more 

Management

Luxottica is effectively controlled by chairman Leonardo Del Vecchio, who founded the firm in 1961 and owns 61% of its shares. Andrea Guerra served as CEO from 2004 to 2014 but currently Adil Mehboob-Khan and Massimo Vian will serve as co-CEOs. Del   Read more 

Profile

Luxottica designs, manufactures, and distributes mid- to premium-price prescription eyewear frames and sunglasses. The company markets its own brands, including Ray-Ban,  Read more 

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