Shares of Hermès International SCA (EPA: RMS) are moving higher in today’s European trading session after a luxury brand reported stronger-than-expected figures for its first quarter.
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Hermès said its sales (at a constant currency) rose as much as 23% year-over-year, crushing the consensus of 15%. The quarterly outperformance was boosted by strong demand for almost all Hermès’ products, with the perfumes business unit recording the smallest YoY growth of +6.8%.
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All regions enjoyed robust demand, with Europe and Asia growing 23.9% and 23%, respectively. Overall, revenue increased by 23% to €3.38 billion, easily ahead of the €3.2 billion consensus. The surge in sales came despite Hermes raising prices by 7% on average, a higher rate than the typical 2-3% increase on an annual basis.
“What we’re seeing in the United States is globally an increase in (store) traffic, the trends we’ve seen in April remain favorable, with, again, very dynamic traffic,” stated Hermes finance chief Eric du Halgouet.
“We obviously remain vigilant as far as macro trends are concerned … but we have not seen a slowdown so far.”
As a result, the maker of prominent Kelly bags saw its market cap stay above the €200 billion handle. Hermès’ robust earnings report follows rival LVMH, who saw its stock price surge after yet another strong performance.
Last week, Hermès opened a new factory in France that will be focused on Kelly bags, which will employ around 260 people. The new factory is located in Louviers, Normandy (France).
Hermes noted a “very good Chinese New Year” that facilitated a strong momentum in Greater China and across the region.
At 09:00 GMT, Hermes stock price trades over 1% higher as bulls eye a test of the €2,000 per share handle.
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