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Hermès Revenue Jumps 10 Percent

Hermès campaign | Source: Hermès
By
  • Bloomberg

PARIS, France — Hermès International SCA, the French maker of Birkin bags and silk scarves, reported first- quarter sales that beat estimates, led by demand in Japan.

Revenue jumped 10 percent to 943.5 million euros ($1.31 billion), Paris-based Hermès said today in a statement. Analysts predicted 921 million euros, according to the median of nine estimates compiled by Bloomberg. Sales excluding currency swings advanced 15 percent.

Sales on a constant-currency basis surged 22 percent in Japan, exceeding estimates, as Hermès raised prices and shoppers splurged in advance of a sales tax increase, the maker of $10,000 handbags said. An 18 percent revenue gain in the rest of Asia confirmed a positive trend, particularly in China, Hermes said. In Europe, where sales rose 7.9 percent, business remains sustained in a difficult economic environment, the company said.

“Hermès will continue its long-term strategy,” the luxury-goods producer said. “Above all, it is our company’s unwavering determination to continually reinvent itself in order to push the limits of excellence.”

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Hermès is adding production facilities in France and opening more stores as the highest segment of the luxury industry resists a slowdown. Italian cashmere clothier Brunello Cucinelli said this month that he's very confident about the top end of the market because super-wealthy consumers continue to seek exclusive products.

Profitability at Hermès is likely to shrink this year from a record in 2013, weighed down by the weakness of the Japanese yen, the company said in March. First-quarter sales advanced 13 percent last year at constant currencies.

Hermès rose 1 percent to 254.65 euros at the close in Paris yesterday. The stock has declined 3.4 percent this year, valuing the saddle-maker part owned by rival LVMH Moet Hennessy Louis Vuitton SA at 26.9 billion euros.

LVMH reported its fastest fashion and leather-goods sales growth in two years when it published first-quarter revenue figures on April 10.

By Andrew Roberts; Editors: Celeste Perri, Tom Lavell.

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