French luxury goods maker Hermès’ warned its sales growth will slow this year as it reported a 9% rise in profits for 2014.The brand’s …
French luxury goods maker Hermès’ warned its sales growth will slow this year as it reported a 9% rise in profits for 2014.The brand’s strategy of focusing on higher end exclusive product stood it in good stead in 2014 with net profit up 9% to €859m ($938.5 million) and full-year operating profits up 7% to €1.3bn. But currency effects related to the yen saw operating margins fall to 31.5%, down from the record high in 2013 of 32.4%.
Despite double-digit growth in Asia, the company cited the impact of “recent events in Hong Kong and the general slowdown in China’s market”.
It warned that it expects lower annual sales growth of 8% in 2015 as luxury sales slow in China continues to impact, along with currency and geopolitical uncertainties.
Full-year sales at the company rose 11% in 2014 to €4.12bn, driven by a 15% increase in sales in the Americas.
Hermès said it would pay investors a dividend of €2.95 a share, along with an exceptional dividend of €5 a share.
Shares in the company fell in early trading as investors reacted to the results and fears over Hermès’ exposure to the Japanese market.