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Oakley Earnings Beat Expectations

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TIMES STAFF WRITER

Sunglass maker Oakley Inc., regaining ground lost in a dispute with its largest customer, said Thursday that second-quarter earnings slightly beat analysts’ expectations.

With demand strong for its sunglasses and other products, Oakley also boosted its profit expectations for the year to 83 cents a share, which would be a 15.3% increase from 2001.

Earnings in the quarter slipped to $22.3 million, or 32 cents a share, compared with $23.6 million, or 34 cents, during the comparable period last year. Analysts were expecting 31 cents a share. Last year’s second quarter included a tax-rate cut that added 3 cents a share to Oakley’s earnings.

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Sales in the quarter ended June 30 rose to $145.1 million, a 10.6% increase from the comparable period last year. That was less than some analysts were expecting, partly because the company had trouble filling demand due to a shortage of raw materials for making sunglasses.

“Basically, management needs to do a better job of forecasting demand for their product, and I think that’s what we’ll see going forward,” said Kristine Koerber, an analyst with WR Hambrecht & Co. Although unit sales dropped 9%, sunglass sales rose 5%, driven by a 15.3% increase in the average selling price.

Still, the results show that Oakley has recovered from challenges it faced last year, the company said in a statement. Oakley’s sales slid in the second half of last year when its biggest customer, Sunglass Hut, slashed orders after being acquired by competitor Luxottica Group. Oakley and Luxottica have since patched up their differences.

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The results pleased investors, who boosted the stock price by $1.23, to $15.25 on the New York Stock Exchange. The stock is down $7.75 for the year.

Foothill Ranch-based Oakley, which built its brand by selling trendy sunglasses, in recent years also began making clothing, shoes, watches and prescription eyewear. Sales of those products grew 47.9% to $32.4 million in the quarter, accounting for 20.3% of sales.

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