Hermès Reports Record Profitability as Revenue Surges in Asia

Hermès Spring/Summer 2013 Campaign | Source: Hermès

PARIS, France — Hermès International SCA, the French maker of Kelly bags and silk scarves, reported 2012 earnings that exceeded analysts’ estimates as Asian demand soared and proposed a dividend of 2.50 euros a share.

Operating profit rose 26 percent to 1.12 billion euros ($1.45 billion), the Paris-based company said today in a statement. Analysts predicted profit of 1.09 billion euros, according to the average of 15 estimates compiled by Bloomberg. The luxury goods maker’s operating margin widened to 32.1 percent, the highest since its shares began trading in 1993.

Hermès said last month it expected that margin to be “slightly above” 2011’s 31.2 percent after a surge in fourth- quarter sales led to a 16 percent gain in full-year revenue, excluding currency swings. The company exerts more control over sales by limiting supply of its handbags amid strong demand, according to Exane BNP Paribas.

“Hermès will continue to follow its long-term strategy based on creativity, maintaining control over its know-how, expanding its distribution network, strengthening its production capacity and protecting its sources of supply,” the company said in the statement.

The interim dividend of 1.50 euros a share paid on March 1 will be deducted from the annual dividend to be approved at a shareholder meeting on June 4, Hermès said.

Net income increased to 740 million euros from 594 million euros in 2011, the company said.

Editors: Thomas Mulier, Celeste Perri