Luxottica ups outlook for FY 06 after posting record 1H06 results, now expects FY 06 net income to grow 24% over previous year

Milan, Italy – July 27, 2006 - Luxottica Group S.p.A. (NYSE: LUX; MTA: LUX), the global leader in the eyewear sector, today announced consolidated U.S. GAAP results for the three- and six-month periods ended June 30, 2006. Financial highlights for the respective periods were as follows:

Second quarter of 2006¹

• Consolidated sales: €1,294.8 million (+13.0%) - Retail sales: €907.1 million (+7.6%); Retail comparable store sales²: +6.4% - Total wholesale sales: €486.4 million (+32.1%) • Consolidated operating income: €217.4 million (+31.2%); Operating margin: 16.8% - Retail operating income: €126.1 million (+25.3%); Retail operating margin: 13.9% - Wholesale operating income: €135.2 million (+49.7%); Wholesale operating margin: 27.8% • Consolidated net income: €121.2 million (+33.1%); Net margin: 9.4% • Earnings per share: €0.27 (US$0.34 per ADS)

First half of 2006³

• Consolidated sales: €2,556.8 million (+17.1%) - Retail sales: €1,798.0 million (+12.4%); Retail comparable store sales⁴: +7.3% - Total wholesale sales: €942.0 million (+35.5%) • Consolidated operating income: €408.9 million (+35.3%); Operating margin: 16.0% - Retail operating income: €238.3 million (+34.5%); Retail operating margin: 13.3% - Wholesale operating income: €253.6 million (+50.9%); Wholesale operating margin: 26.9% • Consolidated net income: €224.5 million (+34.1%); Net margin: 8.8% • Earnings per share: €0.50 (US$0.61 per ADS)

Andrea Guerra, chief executive officer of Luxottica Group, commented: “Results for the first half of 2006 were outstanding all around, in all regions and in both our wholesale and retail businesses. We continued to significantly outpace growth in our sector, gaining additional market share in key markets as well as additional visibility and penetration for our brands. This resulted in an improvement in operating income by 35.3%, with operating margin rising significantly by 220 basis points to 16.0%.”

Mr. Guerra continued: “Year-to-date, our business showed signs of strength that we believe are important when looking at the second half of the year and beyond. On the retail front, Pearle Vision’s line-by-line P&L improvement proved that its new business model is the right one. Sunglass Hut posted a fifth quarter in a row of double-digit comparable store sales and its new, completely fashion-focused store environment is attracting the right profile of customers.

Similarly, LensCrafters’ renewed focus on premium fashion and the highest standard of service is paying off. In addition, the performance of LensCrafters stores with the new format is particularly encouraging. On the wholesale front, our luxury brands are experiencing extremely strong momentum, with house brands also performing well behind outstanding results from Ray-Ban. At the same time, already strong growth in existing markets was outpaced by significantly higher growth rates in emerging markets.

As a result, today we are on track to deliver results for the full year 2006 above our original forecast, with net income expected to grow by up to 24 percent. Growth is then expected to continue beyond 2006 thanks to the many opportunities already existing within our business.”

Luxottica Group now expects to post earnings per share (EPS) for fiscal year 20065 of between €0.93 and €0.94 (or earnings per American Depositary Share of between US$1.16 and US$1.17). Luxottica Group’s updated forecast for fiscal year 2006 is based on a €1 = US$1.2444 average exchange rate for the twelve-month period, in line with the actual average exchange rate for fiscal year 2005.

Mr. Guerra concluded: “I am especially pleased to report that cash flow generation was for yet another quarter one of the highlights of our results, with €150 million before the payment of dividends and acquisitions. This is an important testament to the strength of our business.” On June 30, 2006, Luxottica Group’s consolidated net outstanding debt was €1,505.2 million (compared with net outstanding debt of €1,457.4 million on March 31, 2006), showing a strong improvement compared with June 30, 2005.

The second quarter was a record period for the wholesale business. While sales to third parties – a key measure of our wholesale business – rose by 27.1%, operating margin jumped 330 basis points to 27.8%, in line with all-time highs for our wholesale Division. Main drivers of this performance were: the strength and further improved penetration of the Group’s luxury and fashion brands – mainly Bvlgari, Chanel, Dolce & Gabbana, Prada and Versace; another strong, above 20%-growth quarter by Ray-Ban; and, ongoing success in strengthening ties with key customers around the world through our superior service.

In the retail business, the Group enjoyed another quarter of particularly strong results, especially from operations in North America, with overall performance and comparable store sales growth rates above those of the premium retail sector in that market.

LensCrafters posted another above-average quarter, while Sunglass Hut’s comparable store sales rose by over 11%. Similarly, Pearle Vision posted its third consecutive quarter of growth, with comparable store sales up to mid single-digits and further improvements in profitability. In Asia-Pacific, the Group’s optical business continued to be the main driver.

Overall, operating profitability for the Group’s retail operations rose by 200 basis points to 13.9% for the quarter, and by 220 basis points to 13.3% for the year-to-date period.

Results for the quarter and the year-to-date period reflect the impact of non-cash expenses for stock options6 of €11 million and €21 million, respectively, compared with no such impact for the first two quarters of 2005.

Luxottica Group’s consolidated results for the second quarter and first half of 2006 were approved today by its Board of Directors.

About Luxottica Group S.p.A.

Luxottica Group is a global leader in eyewear, with nearly 5,700 optical and sun retail stores in North America, Asia-Pacific, China and Europe and a strong brand portfolio that includes Ray-Ban, the best selling sun and prescription eyewear brand in the world, as well as, among others, license brands Bvlgari, Burberry, Chanel, Dolce & Gabbana, Donna Karan, Prada, Versace and Polo Ralph Lauren, beginning January 2007, and key house brands Vogue, Persol, Arnette and REVO.

In addition to a global wholesale network that touches 130 countries, the Group manages leading retail brands such as LensCrafters and Pearle Vision in North America, OPSM and Laubman & Pank in Asia-Pacific, and Sunglass Hut globally. The Group’s products are designed and manufactured in six Italy-based high-quality manufacturing plants and in the only two China-based plants wholly-owned by a premium eyewear manufacturer.

For fiscal year 2005, Luxottica Group (NYSE: LUX; MTA: LUX) posted consolidated net sales of €4.4 billion. Additional information on the Group is available at www.luxottica.com.

Safe Harbor Statement

Certain statements in this press release may constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those which are anticipated.

Such risks and uncertainties include, but are not limited to, fluctuations in exchange rates, economic and weather factors affecting consumer spending, the ability to successfully introduce and market new products, the availability of correction alternatives to prescription eyeglasses, the ability to successfully launch initiatives to increase sales and reduce costs, the ability to effectively integrate recently acquired businesses, including Cole National, risks that expected synergies from the acquisition of Cole National will not be realized as planned and that the combination of Luxottica Group’s managed vision care business with Cole National will not be as successful as planned, as well as other political, economic and technological factors and other risks referred to in Luxottica Group’s filings with the U.S. Securities and Exchange Commission.

These forward-looking statements are made as of the date hereof and, under U.S. securities regulation, Luxottica Group does not assume any obligation to update them.

Company media and investor relations contacts

Luxottica Group S.p.A.

Luca Biondolillo,
Head of Communications
Tel.:  +39 (02) 8633 4062
Email: LucaBiondolillo@Luxottica.com