UPDATE 3-Luxottica targets below expectations, shares drop

(Adds quotes, China acquisitions, details from analyst presentation)

By Alexandria Sage

LOS ANGELES, Feb 7 (Reuters) - Italy's Luxottica Group SpA (LUX.MI: Quote, Profile, Research), the world's largest eyewear maker, on Thursday set profit outlooks for 2007 and 2008 below analysts' targets as it begins it first full year of integration with U.S. sports brand Oakley, and shares fell 7 percent.

Luxottica said it was taking a cautious approach given a slowdown in consumer spending in North America, but said profit margins could still improve in that key region.

Risks will be balanced by opportunities in other regions and divisions, executives said. Sales at Oakley and at wholesale are expected to grow in the double-digits on a percentage basis in 2008, while China, where Luxottica is looking to grow its retail presence through acquisitions, should see sales growth over 20 percent.

The company, a much larger organization since its acquisition of Oakley last year, is focused on trimming costs and gaining market share as it comes off a year heavy with infrastructure investments and the revamping of its retail stores.

"2008 is a year of execution," Luxottica Chief Executive Andrea Guerra told analysts gathered at the Foothill Ranch, California headquarters of Oakley. The comments were monitored by Webcast.

"Now, we have to leverage on those investments," Guerra said, adding that the company had built a "new great growth platform for the future" that would withstand slowdowns in the U.S. economy.

The company owns and licenses fashion and luxury eyewear brands like Ray-Ban, Prada and Chanel that are sold around the world. It also owns North American retail chains LensCrafters and Sunglass Hut and operates the No. 2 managed vision care business in North America, EyeMed.