Hermès First Half Financial Highlights

Hermes-Boots
Lennox men's sneaker by Hermès.
Hermès.

Double-digit growth in leather goods and saddlery was the biggest sales driver for Hermès in the first half of 2015. The luxury goods company reported net income of 483 million euros, or $540 million, and 20 percent gains in operating income to 748 million euros, or $836 million.

The group’s consolidated revenues for the first half totaled 2.3 billion euros, or $2.6 billion, an increase of 21 percent at current exchange rates. In the second quarter, sales totaled 1.17 billion euros, or $1.3 billion.

Hermès said it sales increased in all of major geographic regions with Japan growing the most at 20 percent; followed by America at 10 percent; and Asia (excluding Japan) and Europe both logged 7 percent growth.

The 14 percent sales growth in its leather goods and saddlery division was supported by the “ramp-up of the production capacities of the two new sites that opened in Charente and in Isère in June, as well as by the construction project for two new production units in Franche-Comté,” the company said.

Ready-to-wear and accessories climbed 8 percent. Watches saw a 1 percent sales decline while silk and textiles improved by 5 percent, despite challenges in Greater China.

“Thanks to the success of its unique company model, Hermès will continue its long-term development strategy based on creativity, control of know-how and safeguarding its procurements,” the company said in a release. “Despite economic, geopolitical and monetary uncertainties around the world, the group is maintaining its medium-term objective of increasing the turnover at constant rates in the area of 8 percent.”

For 2015, the company said, operational profitability should be lower than 2014 (31.5 percent) due to the negative impact of currency fluctuations.

“True to its Parisian roots, Hermès invites us to look at 2015 through the eyes of a loafer,” the company said. “A loafer is capable of heading off the beaten track and looking at the world with eyes wide-open and savour a chance encounter, the joy of discovery, and even the benefits of a little break.”