NEW YORK (TheStreet) -- Luxottica Group SpA (LUX)  announced that its co-chief executive is resigning after just six weeks on the job, as the global eyewear company struggles to find a replacement for Andrea Guerra who left last month, Reuters reports.

The Italian maker of Ray Ban and Oakley sunglasses confirmed that Enrico Cavatorta planned to resign.

The reason for his departure could have been a falling out with the founder, a source told Reuters. Cavatorta and the founder Leonardo Del Vecchio had met earlier in the day, but failed to resolve their issues, sources added.

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Up to now, Luxottica's strong brand portfolio has helped to maintain its dominant position in eyewear and to reassure investors despite the turmoil, according to Reuters.

Shares of Luxottica are down 8.67% to $47.22 in heavy trading volume.

TheStreet Ratings team rates LUXOTTICA GROUP SPA as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate LUXOTTICA GROUP SPA (LUX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, good cash flow from operations, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • LUXOTTICA GROUP SPA has improved earnings per share by 13.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LUXOTTICA GROUP SPA increased its bottom line by earning $1.58 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($1.86 versus $1.58).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.6%. Since the same quarter one year prior, revenues slightly increased by 5.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $527.31 million or 43.38% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.28%.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Textiles, Apparel & Luxury Goods industry average. The net income increased by 15.0% when compared to the same quarter one year prior, going from $278.85 million to $320.64 million.
  • The gross profit margin for LUXOTTICA GROUP SPA is rather high; currently it is at 65.81%. Regardless of LUX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LUX's net profit margin of 11.43% compares favorably to the industry average.
  • You can view the full analysis from the report here: LUX Ratings Report

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