Hermes Q4 sales growth slows down

Hermes revenues on a reported basis were down 0.4 percent from a year earlier to 1.5 billion euros ($1.84 billion) between October and December. Sales reached 5.5 billion euros for 2017 as a whole, up 9 percent at constant currencies.

Hermes said aid sales at constant currencies rose 5 percent in the fourth quarter, a slight slowdown from the previous three months. That was a touch below market expectations, with analysts expecting growth to have eased to closer to 6 percent from 11 percent a quarter earlier, against tougher comparisons.

Chief Executive Axel Dumas said year-ago comparisons were tougher for its silk division, while stock levels of its handbags had run low after high demand throughout 2017. Nevertheless, growth remained very healthy in general, he added on a call with journalists.

Dumas said: “There is good momentum in our industry because of demographics and because of the economic growth of China and the worldwide economy. We are confident for the future and it will continue I hope at this kind of pace,”

Hermes said it had long benefited from steady appetite in China but had noted improved demand in other parts of Asia, including Hong Kong, where it opened a new flagship store in January, and Macau.

Revenues on a reported basis were down 0.4 percent from a year earlier to 1.5 billion euros ($1.84 billion) between October and December. Sales reached 5.5 billion euros for 2017 as a whole, up 9 percent at constant currencies.

The company, which is expanding its leather goods production capacities through to 2020 with new workshops in France, said strong demand for its handbags had lead to low inventory levels at the end of 2017.

Hermes, which will report full results for last year on March 21, said operating profitability should be close to the record level recorded over the first half of 2017.

The label is overhauling its website, and is due to roll out the new version in Europe by the end of the first quarter and in China by year-end, Dumas said.

HERMES