Oakley has opened its first German store, located in the Europa-Passage shopping center of Hamburg and measuring 120 square meters. Oakley's 6-year-old German subsidiary at Ismaning near Munich, which is also responsible for Austria and Poland, is also taking over the distribution in Switzerland from Sevysa Sport. A new Swiss company, Oakley Schweiz, will take care of customer service and warranties under the management of Patrick Stettler, field sales manager.

At the recent SILMO trade show in Paris, European buyers were able to view many new models of sunglasses for delivery in the 1st quarter of 2007. The company assured investors in a recent conference call about its results for the 3rd quarter that the lingering delivery problems that Oakley still had in Europe last Spring have now been ironed out.

The company is investing further in researching consumer habits, and its new concentration on optics continues to pay off, with all its old and new brands showing double-digit growth in the latest quarter. Also, it is expanding the “Oakley Custom Eyewear” program, an online feature that lets U.S. customers pick from seven styles and select the specifics of the eyewear like frame color and lens style.

In the recent quarter the company’s total sales outside of the USA increased by 13.8 percent to $93.5 million, with sales increases in every geographical region. In the Europe, Middle East and Africa (EMEA) area, the turnover in optics rose by “significant” double digits, but was offset by a double-digit decline in sales of apparel, footwear and accessories, whose offering is being restructured. In the Americas, not including the USA, sales were up by double digits in both optics and other categories. There was solid growth for optics in Asia Pacific, while shoes, apparel, and accessories were weaker. Total revenues in the USA rose by 27.9 percent to $116.7 million, thanks in part to the recent acquisition of Oliver Peoples and OSA.

Oakley’s total sales climbed by 21.2 percent to $210.2 million, a record amount for the quarter that was helped by the acquisitions as well as by strong turnover for optics. In fact, optics sales had double-digit organic growth in the quarter, and overall they were up by 25.3 percent to $148.8 million. The organic growth, coupled with incremental sales from OSA and Oliver Peoples, was offset by declines in sales of electronic products, but the company continues to rework its distribution scheme for electronics. Sales of apparel, footwear and accessories were up by 2.4 percent to $46.3 million.

The gross margin on a non-GAAP basis expanded by 50 basis points to 54.0 percent, while on a GAAP basis it sunk by 70 basis points to 53.8 percent. It was favorably impacted by the concentration on optics, the addition of Oliver Peoples and improved manufacturing efficiencies, all of which were partially offset by Oakley getting rid of old products like the Thump 1, and other markdowns and inventory reserves.

The company’s operating income rose by 7.7 percent to $26.1 million. Net income grew to $17, 342,000, as compared to $16,072,000 in the year-ago period. Full-year guidance has been raised from a sales increase of 13 percent to growth of 15-17 percent over 2005’s net sales of $648.1 million (more in EyeWear Intelligence).