China pushes Hermes results in third quarter

Luxury goods maker Hermes said Wednesday that sales had accelerated during the third quarter across all its major markets and notably in its two biggest regions of Europe and Asia.

Hermes said revenues were up by 6.4 percent at €1.337 billion ($1.5 billion) in the period from July to September. The result was ahead of analysts' average expectations of an about 8.5% revenues increase, as demand for the group's scarves, bags and clothes accelerated since the previous quarter when sales rose 8.3%.

"All sectors recorded growth, with a remarkable performance of the ready-to-wear and accessories, silk and textiles, and perfumes business lines," the statement said.  "We're continuing to deliver a robust performance and particularly healthy growth, because it's organic growth," said chief executive, Axel Dumas.

Taking the nine months to September, sales totalled 4.05 billion euros, an increase of 9.5 percent or 10.2 percent when adjusted for exchange rate effects. 

Asia remains by far the biggest market for Hermes, with total sales in the region amounting to 1.978 billion euros in the nine-month period, up 10.1 percent on the year. European sales grew by 8.3 percent to 1.295 billion euros, with sales in France up 5.4 percent at 549.9 million euros. 

By division, sales of leather goods and saddlery accounted for around half of the group total, rising by 10.5 percent to 2.058 billion euros. "We're lucky in not having any stockpiles. We sell everything we produce," CEO Dumas told AFP.

Looking head, Hermes said that "in the medium term, despite growing economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates."

Hermes sounded one note of caution on Wednesday, noting that the stronger euro would weigh on reported results in the second half and had cost it about €25 million revenues in the third quarter.