Paris - Hermes International SCA, the French maker of Birkin bags, reported first-half earnings that beat estimates and reiterated its forecasts for 2013.
Operating profit rose 14 percent to 584.1-million euros ($773.6-million), the Paris-based company said today in a statement. Analysts predicted 569 million euros, according to the median of seven estimates compiled by Bloomberg. The stock rose as much as 3.1 percent, the most in more than a month.
Hermes said in July it expected first-half recurring operating income to increase slightly faster than revenue, which advanced 11 percent on a reported basis and 14 percent excluding currency swings. Full-year profit as a percentage of sales could be close to 2012’s record 32.1 percent, depending on currency moves, while revenue growth may top 10 percent at constant exchange rates, the luxury-goods maker repeated on Friday.
“Demand for Hermes products remains strong,” the company said, adding that bag sales growth remains constrained by production capacity. To that end, Hermes said it plans to add two facilities in France devoted to “artisanal activities”.
First-half sales advanced to 1.77-billion euros. The operating margin widened to 33.1 percent, boosted by the positive impact of currency hedges, Hermes said.
The stock traded 3 percent higher at 255.85 euros at 9.01am in Paris, bringing the gain this year to 13 percent.
LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury-goods company, raised its stake in Hermes to 23.1 percent from 22.6 percent in the first six months of 2013. Hermes has called repeatedly for LVMH to reduce the holding it amassed starting in 2010 after converting cash settlement equity swaps.
France’s financial markets regulator fined LVMH 8 million euros in July for breaching disclosure rules. LVMH plans to appeal the ruling. - Bloomberg