The Paris-based company said sales in Japan, one of its biggest markets, were boosted by purchases ahead of anticipated price increases and a value added tax hike on April 1.

Revenue in Japan rose 22% in the first quarter, while trading remained buoyant in the United States and China.

Hermes Chief Executive Axel Dumas said he expected sales in Japan to be lower in the second quarter due to the higher comparative basis, but remain positive over the whole year.

Dumas said trading had improved in some southern European markets such as Italy both thanks to higher demand from local consumers and also thanks to the brand’s new shop in Milan opened in October last year.

Hermes’ first-quarter revenue of €943.5 million ($1.31 billion) was hit by a negative foreign exchange impact of €40 million, the company said in a statement.

Hermes’s performance beat rivals such as Louis Vuitton, owned by LVMH, whose sales rose 9% in the first quarter and Gucci, part of Kering, which posted a revenue rise of just under 1% on a like-for-like basis.

Leather goods products, Hermes’ main revenue and profit contributor, generated sales growth of 15.5% on a like-for-like basis, while ready-to-wear and fashion accessories sales rose 19.1%.

Dumas said the increase was helped by ramped-up production at the company’s newly opened sites in France.

The company said it expected a slight drop in operating margin in 2014, partly due to foreign exchange variations.

Source: Reuters