Luxury goods group Hermès International Société en commandite par actions, best known for its silk scarves and handbags, on Feb. 8 reported that fourth-quarter sales at actual exchange rates dipped 0.4% year over year as currency fluctuations reduced revenue by €100 million.
The French fashion house reported that sales in the three months ended Dec. 31, 2017, slipped to €1.50 billion from €1.51 billion in the same period of 2016 due to year-end strengthening of the euro. The performance fell short of the S&P Capital IQ sales consensus estimate of €1.51 billion. At constant exchange rates, sales were up 4.6% year over year.
For full-year 2017,
Paris-based Hermès said the increase in full-year sales was built on growth in all its geographies as it continued to improve its distribution network and completed renovations or extensions to 20 stores. The company had 307 exclusive stores at the end of 2016, 210 of which were operated directly, according to its website.
At constant exchange rates, sales grew 11% year over year in the Asia region excluding Japan, where sales increased 4%. Sales were up 8% each in the Americas region and in Europe. Hermès said it had deployed its new website in the U.S. and Canada and plans to launch the online platform in Europe in the first half of 2018 and in China at the end of the year.
Sales of leather goods and saddlery, which accounted for half of group sales in 2016, increased 10% year over year, driven by strong demand for Hermès' iconic bags like the Birkin and Kelly, and other models such as the Constance, Halzan, Lindy and Verrou.
The perfumes division reported 10% year-over-year growth in sales due to the launch of Twilly d'Hermès. Sales of ready-to-wear and accessories rose 9%, while the watches business saw sales tick up 1% year over year.
Hermès said it confirmed "an ambitious goal for revenue growth at constant exchange rates" over the medium term despite growing economic, geopolitical and monetary uncertainties. It did not provide further details.
The company also said operating profitability in the second half of 2017 should be close to the level recorded in the first half. It posted recurring operating income in the six months to June 30, 2017, of €931.3 million.
Hermès is due to report results for full-year 2017 on March 21.
In early morning trading in Paris, Hermès' shares dropped €1.40, or 0.3%, to €430.70.
