Hermès results enhanced by leather goods

Worldwide
Published:  23 March, 2016

The luxury Group has reported a 19% increase in operating profits for the full year 2015, driven by strong demand for its leather goods, particularly in Japan.

Hermès’ full-year net profit in 2015 was €973 million, up 13.2% compared with the previous year, but below average expectations of €998 million. According to the company report, the figure was negatively affected by heavier taxes, particularly in France.

Operating profit increased 19% to €1.54 billion (US$1.7 billion) on an adjusted basis.

The company is said to benefit from two new productions sites in France, boosting the supply of leather goods. Positive results and sales growth were registered in all regions, but particularly in Japan, thanks to the influx of tourists from China. Sales in other Asian countries increased 5%, reflecting difficulties in Hong Kong and Macau.

Sales in the U.S. and Europe were up 7% and 9%, respectively, with France registering a “remarkable” 6% increase despite the Paris attacks.

Hermès maintains its guidance for 2016, although growth could be below its medium-term goal of 8% at constant exchange rates due to geo- economical and political issues. Axel Dumas, CEO, Hermès, also announced it plans to raise prices by about 3.5% in Europe, in line with production costs.

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