Hermès International has upgraded the outlook for this year, predicting an overall sales increase of between 12 and 14 percent on a currency-neutral basis instead of a previously projected range of 8 to 10 percent. Operating margins are expected to come close to the record level reached in 2010.
The new forecast comes after the French luxury goods company booked a higher-than-expected 22 percent increase in consolidated revenues for the first six months to €1.30 billion, with growth of 21 percent in local currencies. Growth continued to be strong in the second quarter, up by 23 percent in Hermès' own stores and by 19 percent at the wholesale level on a currency-neutral basis.
In particular, the segment of clothing and accessories, which comprises Lobb and Hermès footwear, registered an increase of 30.5 percent in constant currencies in the first half. Sales of leathergoods and saddlery, which remain the biggest source of revenues, went up by 14.5 percent.
The growth of the first half was driven by the U.S. and China. Sales grew by 34 percent in North America and by 30 percent in the Asia-Pacific region excluding Japan, where they were stable in spite of the tsunami. Sales in France recorded a 20.8 percent increase, partly due to the success of Hermès' new store on the Left Bank. In the rest of Europe, sales rose by 20 percent.
Hermès has budgeted the opening of about ten new stores in the course of this year. It has opened a new store in Japan and taken over two concessions in Moscow. The second Hermès store in Rome is scheduled to open on via di Campo Marzio next Sept. 20.
The operating results for the first half, which will be published on Aug. 31, will likely show a much higher increase than the turnover.
Meanwhile, officials of LVMH disclosed a few days ago that their company had raised its stake in Hermès to 21.4 percent from the level of 20.2 percent declared last December. For its part Hermès said it had bought 708,427 of its own shares at prices ranges between €182 and €199 per share between June 7 and July 1.