(BFM Bourse) – Hermès continues to outperform a very dynamic sector, posting impressive organic growth and insolent margins of more than 40% in the first half of 2022. The market applauds and takes the luxury giant’s share to higher annual highs.
The growth in sales of the Faubourg Saint-Honoré saddler still far exceeded analysts’ expectations in the first half, even if activity in China has been slowed down in recent months by the return of confinements, particularly in Shanghai.
During the first half of 2022, the turnover of Hermès International largely exceeded expectations, at 5.475 billion euros, up 29% compared to the first half of 2021. The group is doing slightly better than the consensus, which was counting on half-year revenues of 5.3 billion euros. At constant exchange rates, sales growth was 23%.
If LVMH (+16% in organic) then Kering (+21%) had already impressed the market in the previous days, the saddler also outperforms market expectations, which were counting on half-year revenues of 5.3 billion euros.
A record margin
Current operating income increased by 34% and amounted to 2.3 billion euros against 1.72 billion euros in the first half of 2021, materializing a “record” current operating margin of 42.1%. The group’s half-year net income reached 1.64 billion euros in the first half, up 39.7% over one year.
“The good momentum of the results of the first half testifies to the growth of our 16 businesses and the strong desirability of our objects, designed by craftsmen in a sustainable approach, without compromising on quality. In a still unstable context, we are moving forward with confidence. , faithful to our responsible and committed business model vis-à-vis our employees and our partners”, welcomed the manager of Hermès Axel Dumas, quoted in the press release.
This stratospheric performance also allows the Hermès International title to rebound by 7.7% to 1336 euros around 11:00 a.m. – the action being one of the most expensive on the French coast.
Very “strong performance” in all regions
In the first half of 2022, all regions posted very solid performances, with Asia holding up well despite the health context in China. Sales in group stores (+23%) benefited from the strengthening of the exclusive omnichannel network and online sales. The growth in wholesale sales (+25%) results in particular from the recovery in sales to travellers.
Asia excluding Japan (+15%) was driven by strong momentum across the region, and in particular by sustained activity in Singapore, Australia and Korea. Greater China rebounded strongly in June, after being penalized by health restrictions and store closures, mainly in Shanghai and Beijing in April and May. After the reopening of the renovated stores at Pacific Place in Hong Kong and One Central in Macao at the start of the year, a new store was successfully inaugurated in Zhengzhou at the end of March, in the province of Henan in China.
Japan (+20%) showed a remarkable performance, which is based on the loyalty of local customers. The America zone (+34%) continued to enjoy very good momentum at the end of June. In the United States, a new store was inaugurated in Austin in April, the House’s third store in Texas.
Europe excluding France (+34%) and France (+41%) continued their solid growth, thanks to the loyalty of local customers and the recovery in tourist flows, particularly in France, the United Kingdom and Italy.
A loyal clientele
At the end of June 2022, all business lines confirmed their growth. Growth in Leather Goods & Saddlery (+12%) was based, according to Hermès, on sustained demand and the increase in production capacity, in line with its annual objective. The Clothing and Accessories division (+36%) continued its good momentum, driven by the success of the ready-to-wear collections, fashion accessories and shoes. The Other Hermès businesses (+33%) continued their strong momentum, thanks to the Home universe and Jewellery.
True to form, the saddler does not reveal any quantified prospects. For 2022, it is still “difficult” for the group to assess the impacts of the health context. “The highly integrated artisanal model, the balanced distribution network, the creativity of the collections and the loyalty of the clientele allow us to approach the future with confidence” adds Hermès.
In the medium term, despite the economic, geopolitical and monetary uncertainties in the world, the group confirms an “ambitious” objective of growth in turnover at constant exchange rates.
Sabrina Sadgui – ©2022 BFM Bourse
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