Hermès grows 7.2% and cuts prices in China
Hermès stores the latter with a 7.2% growth in revenues to 1.46 billion euros, supported by Europe, Asia (excluding Japan) and the Americas.
At constant exchange rates, the luxury group achieved an increase of 11.6% compared to the same period of 2017, while the average of the analysts heard by Reuters expected a + 10%.
The company specified in a note that a good June negative impact of exchange rate fluctuations on sales was 165 million euros.
In the quarter, Hermès achieved + 7.7% in Europe (+ 9.9% in France), + 6.4% in Asia (despite zero growth in Japan) and + 7.3% in the Americas, dove the openings are intensifying.
In the first half of the year, sales amounted to 2.85 billion euros, up 11% at constant exchange rates and 5% at current exchange rates, with + 11% at constant exchange rates in single-brand stores.
Again with reference to the six-month period, the Goods and Saddlery division made a + 8% mark at comparable exchange rates. It should be noted that productive productivity is increasing, also thanks to the opening of the Allan Manufacture last April. A leap forward of 17% for Ready-to-Wear, while in the item Silk and Fabrics of + 7%.
Perfumes and trains from the success of fragrances such as Terre d’Hermès and Twilly d’Hermès progress to double digits (+ 15%), while watches are up 9%. The other divisions – Jewels, Art of Living and Hermès Table Arts – are in excellent health, with + 24%.
Despite the global geopolitical, economic and monetary uncertainties, the medium-term outlook is positive, marked by an opportunity for growth at constant exchange rates (in the photo, the griffe’s autumn-winter 2018/2019 fashion show).
As reported by Reuters, management estimates for the first half of the year the optional uses of previous records a year earlier. The period should also benefit from the capital deriving from the sale of the Hong Kong store. Speaking of China, CEO Axel Dumas said the area has grown to double the number of previous years, a demonstration that the brand does not currently suffer from the macroeconomic uncertainty and tensions of the People’s Republic with the US. According to Dumas: “I would rather not be there. In the case, I don’t think we will be the first to be affected “. The CEO also announced that Hermès has cut prices in China by 4% since July, following the Chinese government’s decision to reduce import duties.