Hermes International Revenue Growth Slows in 2Q
July 21 2017 - 3:48AM
Dow Jones News
By Nick Kostov
PARIS--French luxury brand Hermes International SCA (RMS.FR)
Friday said its operating profitability at the end of June should
be similar to the historical peak of last year despite weakening
sales growth in the second quarter.
The maker of the Birkin and Kelly bags reported an 8.9% rise in
revenue to 1.36 billion euros ($1.57 billion) over the three months
to end of June, compared with the same period a year earlier.
Hermes didn't disclose profit for the period.
Stripping out the effects of exchange rate fluctuations, revenue
rose 8.3% in the period. That is below the 11% growth of the first
quarter this year, but an acceleration on the 7.4% growth in
2016.
"The operating profitability at the end of June should be close
to the highest historical level achieved last year," Hermes said.
"This performance can not be extrapolated over the full year, due
in particular to the favourable impact of foreign exchange hedges
in the first months of the year."
Sales growth at its leather goods division, which makes up half
of the company's sales, slowed to 9.7% from the 15% rise reported
in the first quarter on a constant currency basis. Sales from the
ready-to-wear and fashion accessories business line rose 13% on the
same basis, while revenue from the sale of silk and textiles
advanced 2.9%.
"I don't see a change in the underlying trends during the second
quarter," said Hermes Chief Executive Axel Dumas. "This growth was
sane because it was achieved practically without raising
prices."
Hermes said it was keeping an "ambitious" medium-term goal for
revenue growth at constant exchange rates despite growing economic,
geopolitical and monetary uncertainties.
Write to Nick Kostov at nick.kostov@wsj.com
(END) Dow Jones Newswires
July 21, 2017 03:33 ET (07:33 GMT)
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