(Update: Hermès CFO comment on price hikes and Russia)
PARIS (Agefi-Dow Jones)–The luxury group Hermès confirmed its medium-term outlook on Thursday, after seeing its revenues jump in the first quarter, thanks to “strong momentum” in all of the group’s businesses in all geographic areas.
The group confirmed its “ambitious objective of increasing turnover at constant exchange rates” in the medium term, “despite the economic, geopolitical and monetary uncertainties in the world”, Hermès said in a press release.
Rising costs have already prompted Hermès to raise the prices of its products at the start of the year “a little more” than in previous years and the luxury group will study in the middle of the year the need for an additional increase in 2022, said the financial director of Hermès, Eric du Halgouët, during a conference call with journalists.
“The subject will mainly arise in 2023”, warned the manager, who thus foresees even greater price increases next year due to the current strengthening of the prices of precious metals.
In addition, Hermès reiterated that it was “still difficult to assess the impacts” of the health context on the 2022 financial year. However, “the highly integrated artisanal model, the balanced distribution network, the creativity of our collections and the loyalty of our customers allow us to approach the future with confidence”, underlined the group in a press release.
Over the first three months of the year, the saddler achieved a turnover of 2.77 billion euros, up 32.7% over one year in published data and 27.1% at constant changes.
According to the consensus established by Factset, analysts anticipated a turnover of 2.48 billion euros, on average, in the first quarter.
An “exceptional” start to the year in China
In Asia-Pacific excluding Japan, quarterly sales climbed year-on-year by 28% as reported and 19.8% at constant exchange rates, to reach 1.45 billion euros. In Japan, they increased by 17.4% in organic data, to 277 million euros. Revenue in the Americas region jumped 44.2% at constant exchange rates, to 449 million euros.
In China, activity at the start of the year was “exceptional” despite the resurgence of Covid-19 in the country in March, said Eric du Halgouët. The group’s three stores in Shanghai are currently closed, but two other Chinese stores, which closed in mid-March, have reopened, said the manager, adding that Hermès has 26 stores in China.
In France, sales increased by 39.7% over one year, to 214 million euros. In the rest of Europe, sales climbed 43.9% year on year at constant exchange rates, to 327 million euros. In Europe, including France, sales benefited in particular from a favorable comparison base.
In the rest of the world, Hermès’ revenues reached 51 million euros in the first quarter, up 24.7% year on year at constant exchange rates.
In Russia, which represents less than 1% of group sales, the three stores in Moscow remain closed and the plan to open in Saint Petersburg remains frozen, said Eric du Halgouët. Regarding the sanctions against Russia, Hermès “completely respects the regulations in force” and does not “sell to the list of oligarchs which has been transmitted to us”, added the leader.
-Alice Doré, Agefi-Dow Jones; +33 (0)1 41 27 47 90; [email protected] ed: VLV
HERMES INTERNATIONAL FINANCIAL RELEASES:
https://finance.hermes.com/fr/publications/
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April 14, 2022 02:42 ET (06:42 GMT)