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Hermès posts 6 percent revenue rise in Q1

By Prachi Singh

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Report |REPORT

Consolidated revenues at Hermès amounted to 1,191 million euros (1,352 million dollars) in the first quarter, up 6 percent at constant exchange rates and current exchange rates. The group's stores posted sales growth of 8 percent at constant exchange rates in all the regions, which the company said was despite the more challenging conditions.

First quarter sales in all regions in positive

At the end of March, all the regions progressed. Sales in Japan increased 13 percent owing to its highly selective distribution network, Asia excluding Japan posted 4 percent rise, due largely to the rise in sales in mainland China, despite difficult context in Hong Kong and Macao. Sales in America increased 4 percent and Europe with 9 percent growth, saw an increase in the Group's stores, despite the negative impact of recent events, particularly in Paris.

First quarter growth was driven by the success of leather goods and saddlery which confirmed its role as the mainstay of the Group. 15 percent growth in this segment was driven by sustained demand and the increase in production capacities at the two new sites in Isère and Charente. The ready-to-wear and accessories division was down slightly 2 percent, due to the slowdown in Asia, the US and France. The silk and textiles business line with 9 percent decline suffered from the impact of recent events in Europe, and slowing sales in Greater China and America.

The perfumes division declined 4 percent. Watches continued to be penalized by a still challenging market with 3 percent decline, particularly in Asia excluding Japan. Other Hermès business lines were down 2 percent, particularly in jewellery and table arts.

Highlights at the end of March

Currency fluctuations were slightly unfavourable, representing one million euros (1.1 million dollars). As announced when the 2015, the company expects sales growth in 2016 could be below the medium-term goal of 8 percent revenue growth at constant exchange rates owing to the economic, geopolitical and monetary uncertainties around the world. In 2016, Hermès will celebrate "nature at a gallop".

Hermès