Hermès beats after posting strong first-half profit but warns of forex fluctuations
Friday 29 August 2014
The purveyor of €6,000 Birkin handbags has beaten forecasts with half year operating profit up 6.3 per cent despite currency exchange issues.
Hermès, the French luxury giant, revealed half year operating profit of €621m but confirmed currency fluctuations had hit margins.
Its full year operating margin will be below last year’s 32.4 per cent.
Earlier this summer Hermès reported a slowdown in its second-quarter sales growth of 5.8 per cent against 10.1 per cent in the first quarter. A slump in Japanese sales due to a VAT rise had been an issue but sales across the rest of Asia were strong for the silk scarf and leather goods maker.
Today it reported an 8 per cent rise in sales at constant exchange rates to €1.9m.
In a statement from Hermès it said it was “retaining its mid-term objective of revenue growth at constant rates of around 10 per cent.”
Luxury expert Luca Solca, at Exane BNP Paribas, said: “We remain convinced that Hermès is the most defensive name in the luxury space: a long waiting list plus a deliberate effort to ‘starve demand’ and maintain a ‘rarity effect’ means Hermès’ growth and margin performance is more stable than peers.”
Yesterday Italian luxury goods brand Salvatore Ferragamo reported weaker first half net profit of €82m due to a one off sale in the previous year. But the results were better than analysts had expected and earnings at the brand famous for its shoes were up 8 per cent to €90m.
Sales in Asia continued to be strong but it noted a weaker tourism spend in the period – particularly affected by Russian shoppers staying at home following the violence in the region.
Currency changes were also an issue for the leather goods group but second-quarter sales were up 5 per cent compared to a year ago to €360m.
Sales of the tablet are set to fall again, say analysts
Met Police confirm that there was a 'minor disturbance'
Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets
George Lucas criticises the major Hollywood film studios
Does Chris Grayling realise what a vague concept he is dealing with?
Parties threaten resort's image as a family destination
I Am Bread could actually be a challenging and nuanced title
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Banksy arrest hoax: Internet duped by fake report claiming the street artist's identity has been revealed
- 3 Are you ready for Crazy Doritos, the red-hot snack food craze sweeping Mexico’s streets?
- 4 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 5 Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
Isis in Kobani: US resupplies Kurdish fighters by plane - then Turkey allows reinforcements through its border
Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
Banksy arrest hoax: Internet duped by fake report claiming the street artist's identity has been revealed
Super-sized ships arrive in Britain: How big can they get?
Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
Lord Freud: Tory welfare minister apologises after saying disabled people are 'not worth’ the minimum wage
iJobs Money & Business
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...