6 hours ago | By Sandra Halliday
Big data meets consumer insights. Experience WGSN.
Nov 06, 2014
French luxury goods house Hermès International overcame sluggish demand in China to deliver improved sales in Q3, driven by strong demand for its leather goods and ready-to-wear, but although Hermès stood by its full-year targets it admitted its operating margin could be slightly lower than 2013. For Q3, Hermès sales rose 10.6% year-on-year, or up 11.1% currency neutral, to €990.6m ($1.24bn), boosted by a strong showing in its stores. Q2 sales had risen 5.8%.
At the end of September Hermès said currency fluctuations had a negative €77m impact on revenue but Q3 sales in Asia, excluding Japan, still rose 10.2% to €337m despite recent events in Hong Kong and the slowdown in China’s luxury market, it said. Japan sales rose a “buoyant” 16.4% to €120.2m.
The Americas sales lifted 16.9% to €174.2m with European sales up 7.3%, excluding France, to €559.2m, despite a difficult economic climate, it said. France sales alone lifted 6.2% to €153.3m.
A “dynamism” in ready-to-wear and accessories sales was reflected in a 9.1% rise in the sector’s sales to €235.4m. Growth in leather goods and saddlery meant sales jumped 19.3% to €454m, supported by the increased production capacities of the two new sites in Isère and Charente.
Silks and textiles sales lifted 3.6% to €102m on a continued expansion of its collections “with new formats and exceptional materials”.
Fragrance sales grew 11.8% to €57.1m, although watch sales fell 14% to €36.5m as wholesale sales remain challenging, particularly in Asia but excluding Japan, it explained.
For the full year, the group is retaining its mid-term objective of revenue growth at constant rates of around 10%, but operating margin could be slightly less than the all-time high achieved in 2013 (32.4%) due to the negative impact of currencies.
Know what’s next. Become a WGSN member today to benefit from our daily trend intelligence, retail analytics, consumer insights and bespoke consultancy services.