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Hermès with solid results

Jan 2, 2015 France
Hermès with solid results
Sales for the third quarter were up by 10.6% (11.1% at constant rates), reaching 990.6 million euros

In the third quarter, sales growth remained strong across all regions. Asia (excluding Japan) posted a good performance despite recent events in Hong Kong and the slowdown in China's luxury market (10.8% at current rates and 10.2% at constant rates). Japan was buoyant and confirmed the positive trend observed in the first half-year (11.0% at current rates and 16.4% at constant rates). America maintained its dynamism following a strong third quarter (15.6% at current rates and 16.9% at constant rates). Europe made solid advances in a difficult economic climate (rates of 8.2% and 7.4%, at current and constant rates, respectively).

Sales by sector, at constant exchange rates, indicate growth of 14.8% in leather goods and saddlery, supported by the increased production capacities of the two new sites in Isère and Charente. In the meantime, the company announced plans to build two new workshops in Franche-Comté. The dynamism in ready-to-wear and accessories sales (+13.4%) results notably from the "success of fashion accessories and the latest ready-to-wear collections". Perfumes (+9%) and silk and textiles (+9%) continue to grow, while watches (-10%) continue to be penalized by whole sale sales in a market that remains challenging, particularly in Asia (excluding Japan). Other Hermès sectors (+15 %) continue to grow, with a strong contribution from jewellery.

According to Hermès, as at the end of September, currency fluctuations represented a negative impact of 77 million euros on revenue.

For the nine months period ended at 30th September the company's sales reached 2 897.4 million euros (8.8% growth at current rates and 11.7% constant rates). The most dynamic growth (at constant rates) was registered in the Asia Pacific region (14.8%), followed by the Americas (14.1%) and Japan (13.0%). A note to highlight the impact of currency exchanges in the results, especially in Japan, as at current rates the growth rate in this are is very discrete (3.5% compares to 13.0% at constant rates).

For the full year, the group is retaining its mid-term objective of revenue growth at constant rates of around 10%. Operating margin could be slightly less than the all-time high achieved in 2013 (32.4%) due to the negative impact of currencies.

Company’s shares were last traded at 298.40 euros on the 2nd of January at the NYSE Euronext Paris.

For more information about Hermès please visit the company's website.

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