Hermes sees “very good sales and performance” in 2018
Hermes International, the luxury leather goods company best known for its exclusive handbags, reported full year earnings last week that met expectations. The company said double-digit increases in revenue were driven by growth in all geographical areas – a sign that its distribution network’s quality is improving. Those improvements consist of three things: new store openings, renovations in existing stores, and the rollout of its new digital platform in Europe and China.
Hermes International’s share price has risen by 24% so far year to date
Source: Yahoo Finance
Hermes said that revenue grew by 10.4% at constant currencies (7.5% at current exchange rates) to 5,966 million euros. Revenue growth in Group stores improved even more, by 11%. Meanwhile, recurring operating income was up 6% to 2,045 million euros (34.3% of sales), and net profit increased by 15% to 1,405 million euros. All these figures are reported on a year on year basis.
Geographically, and also on a year on year basis, Hermes said that Asia (excluding Japan) saw a 14% rise in sales over the 12-month period. This figure goes a long way to demonstrating something Dominion has been saying for a while: despite a possible drying up of demand in China, the highest end of luxury stocks is holding up well in Asia. Hermes, whose Birkin bags often change hands for hundreds of thousands of dollars, certainly qualifies! Japan was up by 8%; America saw a 12% increase; Europe (excluding France) came in at 8%; and France saw a sales rise of 6%.
Axel Dumas, the company’s executive chairman, said: “This year again, Hermès achieves a remarkable performance, thanks to the talent and incredible commitment displayed by the women and men of Hermès, and confirms the strength of the Group's growth model.”
Dominion holds Hermes International in its Global Trends Luxury Fund.
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