Hermes posts 11 percent profit growth in H1
The Hermes Group’s consolidated revenue amounted to 2,713 million euros (3,227 million dollars) in the first half of 2017, up 11 percent at current and up 10 percent at constant exchange rates. Operating income rose 13 percent to 931 million euros (1,107 million dollars) and profit reached 605 million euros (719 million dollars), up 11 percent. The company said, currency fluctuations were favourable in the six months to end-June, representing a positive impact of 35 million euros (41 million dollars) on revenue.
In the medium term, despite growing economic, geopolitical and monetary uncertainties around the world, the company said that it confirms an ambitious goal for revenue growth at constant exchange rates.
Hermes reports growth across core markets
During the first six months 2017, the company reported revenue growth in all the geographical areas worldwide. Asia excluding Japan saw sales rise of 14 percent, driven by continental China, which gained from positive momentum. The company added that sales in Japan increased 3 percent, despite the strengthening of the yen and America posted 9 percent revenue development in a contrasting environment, and with a particularly high comparison basis in the second quarter.
Revenues in Europe increased 7 percent and were benefitted from store openings and extensions in Rome in October, and London and Munich in March. France in particular posted a good increase in group stores.
Hermes further said that the performance in the first half confirmed the positive momentum of the ready-to-wear and accessories and the silk and textiles business lines. Growth in leather goods and saddlery of 12 percent was led by the success of the collections and the diversity of models. The development was supported by the sustained pace of production and the increase in capacities at the three new sites in Charente, Isère and Franche-Comté. In June, the Group opened two new production sites, the Maroquinerie de Normandie and the Ganterie-Maroquinerie in Saint-Junien.
The ready-to-wear and accessories division’s 10 percent growth was driven by the success of the ready-to-wear collections as well as jewellery accessories and shoes. The silk and textiles business line saw 6 percent sales rise. The perfumes division posted 8 percent sales increase, while the watches business line declined 1% percent, penalised by a still challenging market, showed a slight upturn in the second quarter. Other Hermès business lines, which encompass jewellery, Art of Living and Hermès table arts, continued their development.
Gross margin in the first half improved 1.7 points
The gross margin was 70.1 percent, an increase of 1.7 points compared with the first half of 2016, attributable chiefly to the favourable impact of foreign exchange hedges contracted in the first months of the year.
Recurring operating income rose 13 percent to 931.3 million euros (1,107 million dollars). The operating margin represented 34.3 percent of revenue, up from 33.9 percent at the end of June 2016. Net income attributable to non-controlling interests totalled 1.4 million euros (1.6 million dollars).