PARIS, France — Hermès International SCA, the French maker of Birkin bags, reported first-half earnings that beat estimates and reiterated its guidance for 2013.
Operating income rose 14 percent to 584.1 million euros ($773.6 million), the Paris-based company said today in a statement. Analysts predicted 569 million euros, according to the median of seven estimates compiled by Bloomberg.
Hermès said in July it expected first-half recurring operating income to increase slightly faster than revenue, which advanced 11 percent on a reported basis and 14 percent excluding currency swings. Full-year profit as a percentage of sales could be close to 2012’s record 32.1 percent, depending on currency moves, while revenue growth may top 10 percent at constant exchange rates, the luxury-goods maker repeated today.
“Demand for Hermès products remains strong,” the company said, adding that bag sales growth remains constrained by production capacity. To that end, Hermès said it plans to add two facilities in France devoted to “artisanal activities.”
First-half sales advanced to 1.77 billion euros. The operating margin widened to 33.1 percent, boosted by the positive impact of currency hedges, Hermès said.
LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury-goods company, raised its stake in Hermès to 23.1 percent from 22.6 percent in the first six months of 2013. Hermès has called repeatedly for LVMH to reduce the holding it amassed starting in 2010 after converting cash settlement equity swaps.
France’s financial markets regulator fined LVMH 8 million euros in July for breaching disclosure rules. LVMH plans to appeal the ruling.
By:Andrew Roberts; Editors: Thomas Mulier, Kim McLaughlin