Hermès International reported a strong sales increase of 17.5 percent to €4.84 billion in 2015. In local currencies, the company's growth was limited to 8.1 percent for the year, performing better than the overall luxury goods industry. However, the company's organic growth slowed down to 7.2 percent in the fourth quarter, and the management warned investors that it will likely lie below an expected medium-term average annual rate of 8 percent in 2016, due to the current economic, geopolitical and monetary uncertainties.
On an organic basis, sales increased by 18.3 percent in Japan, driven by growing purchases by Chinese tourists. In the rest of Asia-Pacific, they increased by only 5.1 percent thanks to a continued positive development in Mainland China, where sales rose by close to 10 percent, thanks in part to new openings, offsetting the weakness of the market in Hong Kong and Macau. Sales rose by 6.8 percent in the Americas.
Sales increased by 6.2 percent in France, where the growth rate fell from 11.5 percent in the third quarter to 1.0 percent in the final quarter of the year, due to the impact of the terrorist attacks in Paris in November. In the rest of Europe, sales increased by 10.8 percent for the year, with an 11.6 percent jump in the final quarter.
By business segment, Leathergoods and Saddlery grew the most last year, rising by 12.6 percent in constant currencies. Ready-to-Wear and Accessories were up by 7.8 percent, and the company spoke of a “dynamic” fashion accessories sector, particularly for shoes. In the fourth quarter, however, the growth of the segment slowed down to 3.7 percent. Declines were registered in Silk & Textiles and Perfumes, but the “Other products” segment, which includes John Lobb shoes, jumped by 18.5 percent.
Profit figures will be released on March 23, but the company said that its operating margin for the year should be close to the 2014 rate of 31.5 percent, despite the diluting impact of currency fluctuations.