French fashion house Hermès International SCA on March 21 reported full-year 2017 net profit in line with expectations due to strong growth in all its geographies and product lines, and it proposed an exceptional dividend payment to shareholders.
The company, best known for its silk scarves and its range of handbags that includes models such as Birkin and Kelly, said net profit for the 12 months ended Dec. 31, 2017, jumped 11% year over year to €1.22 billion from €1.10 billion a year prior. The S&P Capital IQ consensus estimate for net profit was also €1.22 billion.
Full-year sales at actual exchange rates increased 6.7% year over year to €5.55 billion from €5.20 billion in 2016, it said Feb. 8. Sales climbed 8.6% year over year at constant exchange rates.
In a statement posted on its website, Hermès did not provide adjusted earnings per share or earnings for the fourth quarter. It previously reported that fourth-quarter sales at actual exchange rates dipped 0.4% year over year to €1.50 billion from €1.51 billion in the year-ago period due to year-end strengthening of the euro.
Paris-based Hermès said its net cash position at Dec. 31, 2017, swelled almost €600 million year over year to €2.91 billion.
The company proposed a full-year dividend increase of 9.3% year over year to €4.10 from €3.75. The figure includes an interim dividend payment of €1.50 paid Feb. 22.
In addition, Hermès is planning to pay shareholders an exceptional dividend of €5.00 per share.
Sales climbed as the company continued to improve the quality of its distribution network, completing renovation and extension work on almost 20 stores. Hermès also deployed its new website in Canada and the U.S. in 2017 and plans to launch the platform in Europe in the first half of 2018 and in China by year-end.
Asia, excluding Japan, delivered an 11% year-over-year rise in sales, with a particularly strong outlook in China and South Asian countries, Hermès said. In Japan, sales were up 4%. Sales increased 8% in the Americas as well as Europe.
Hermès said 10% growth in sales of leather goods and saddlery was in line with expectations. The ready-to-wear and accessories division posted 9% growth in sales, driven by the success of ready-to-wear collections, fashion accessories and particularly shoes.
Perfume sales increased 10%, boosted by the success of Twilly d'Hermès, while sales of silks and textiles gained 6%.
In early morning trading in Paris, Hermès shares were up €12.00, or 2.7%, at €465.00.