Oakley Posts 36 Percent Increase in Earnings Per Share On Net Sales of $264 Million


http://investor.oakley.com/phoenix.zhtml?c=67365&p=irol-newsArticle&ID=1064800&highlight=

I'm sure everyone has seen this. I guess I wonder how/why profits rose with the sale of O... Is it an overall better stock value thing? It certainly isn't a higher quality product thing...

In your lingo, it's a "selling lots of product" thing. Oakley simply sold more sunglasses than in previous quarters, and more than analysts had predicted. More sales turned into more net income than expected, and so the total value of Oakley increased. Accordingly, the price of each share went up a bit to reflect the added value.

In this kind of industry, a higher quality will not significantly increase the profits. Popularity and marketing will increase sales more than in increase in quality, especially when Oakley has been known for a certain level of design and quality.

Ok - just trying to understand... So how does an aquistion with a record of lower quality help that?

I'm not sure there is any correlation between Oakley's spike in profits and the takeover to be quite honest. Oakley had a good quarter from the sounds of it. Why exactly? Could be due to a variety of factors, but I don't think 'Joe Consumer' even cares who owns the company, so I don't think anyone can really answer your question Nik. As far as investors go, I have a feeling they see the merger as a good thing since Lux offers a much larger distribution platform from which Oakley products can be sold. Whether we collectors support it or not, it's a lucrative deal for Oakley and Lux. Unless Lux runs it into the ground and people stop buying. God forbid.

I am still hoping that Lux will understand that the quality and design of Oakley are what make the glasses sell. All that Lux really bring to the table are a better distribution network and a large suitcase full of cash for JJ. If they continue to remember that, they'll continue to make $$$.

Maybe your right Rick, but value in oakley's stock SHOT UP when the merger with lux. took place, check the Oakley (NYSE symbol: OO) stock graph.

The stock price shot up upon acquisition by Lux because Lux bid $29/share to acquire the company. Market price rose to meet that bid.

That shows investors have faith in the merger from an investment point of view. Not from a 'love of the brand'-point of view.

No, that's not necessarily true. The rise in share price is ordinary market dynamics. If anyone, be it Luxoticca or anyone else, sets out to buy a substantial number of shares at a price above market, the price will rise to meet that bid.

Maybe Oakley's plans to refocus their offerings a while back is finally benefiting them. These things don't just happen overnight. Oakley had to have worked hard months ago for such an impressive increase.