Hermes Says Margin Beat Forecast on ‘Dynamic’ Sales Gains
Hermes International SCA (RMS), the French maker of Birkin bags, said 2013 profitability beat its forecast after fourth-quarter sales increased 4.6 percent.
The current operating margin was probably “slightly above” the record 32.1 percent of revenue achieved in 2012, Paris-based Hermes said today in a statement. In November, the company said the measure could be close to 2012’s level. Hermes will publish earnings figures on March 20.
Quarterly revenue advanced to 1.09 billion euros ($1.48 billion), Hermes said. Analysts predicted 1.11 billion euros, according to the median of 11 estimates compiled by Bloomberg. Sales excluding currency moves rose 11 percent, led by gains in the Asia-Pacific region, excluding Japan.
Hermes is weathering a slowdown in luxury-goods consumption better than many of its peers as production constraints and controlled distribution reinforce its elitist appeal. The company said today that it will maintain its long-term strategy.
Full-year sales climbed 13 percent at constant exchange rates to 3.75 billion euros. Hermes said in November that 2013 revenue growth might exceed 11 percent on that basis. Currency fluctuations had a negative 183 million euro effect on 2013 revenue, Hermes said today.
Hermes fell 0.8 percent to 240.65 euros at the close in Paris yesterday. The stock has declined 8.7 percent this year, valuing the saddle-maker part owned by rival LVMH Moet Hennessy Louis Vuitton SA at 25.4 billion euros.
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