Hermes Sales Beat Estimates on Surging Luxury Demand in Asia
Hermes International SCA (RMS), the French maker of silk scarves and leather goods, reported second-quarter sales that beat estimates on surging demand in Asia and said first-half profit growth matched the improvement in revenue.
Sales rose 22 percent to 814.5 million euros ($1 billion), the Paris-based company said today, exceeding the 799.3 million- euro average of three analysts’ estimates compiled by Bloomberg. Revenue increased 13 percent excluding currency shifts.
Hermes, in which LVMH Moet Hennessy Louis Vuitton SA (MC) owns a 22.3 percent stake, today repeated its goal of revenue growth of 10 percent a year, excluding currency shifts. The shares gained as much as 1.9 percent. European luxury stocks fell last week after Burberry Group Plc (BRBY) reported sales that missed estimates, fueling concern that the debt crisis and slowing growth in China are taking a toll on demand for high-end goods.
First-half recurring operating income should be in line with the 22 percent rate that sales grew in the period, Hermes said in a statement. Its full-year operating profit margin should be between that achieved in 2010 and 2011.
Hermes rose 1.8 percent to 234.35 euros at 9:43 a.m. in Paris. Before today, the shares were little changed this year.
Second-quarter sales surged 27 percent in the Asia region at constant exchange rates, accelerating from the first quarter, the company said. That excluded Japan, where revenue fell 1.1 percent on the same basis.
Sales climbed 6.8 percent in France and 16 percent in the rest of Europe at constant exchange rates, Hermes said. Overall in Europe, revenue advanced 12 percent, slowing from the first- quarter’s 21 percent rate.
In the Americas region, sales gained 8.2 percent at constant exchange rates, the company said.
Leather-goods revenue advanced 7.4 percent, and silk and textiles gained 16 percent, while ready-to-wear and fashion accessories grew 22 percent.
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