Hermes International SCA reported a 19 percent increase in first-quarter sales, with the Japanese business showing unexpected growth. Revenue rose to 1.12 billion euros ($1.2 billion), Paris-based Hermes said in a statement Wednesday, matching the median of analysts’ estimates compiled by Bloomberg.
A 15 percent gain in Japan boosted sales compared with a strong year-earlier quarter when the French company raised prices and clients splurged ahead of a tax increase. That compensated for growth of 3.1 percent in non-domestic European sales, which was about a third the pace analysts anticipated. The growth rates exclude currency shifts.
Hermes said its mid-term goal for revenue growth remains about 8 percent at constant exchange rates “despite the economic geopolitical and monetary uncertainties around the world.”
All other regions matched estimates, though Hermes highlighted a more challenging environment in Hong Kong and Macau, and said America confirmed its potential for development.
Demand for leather goods and saddlery remained high, Hermes said. Production at two new facilities boosted capacity, while work started on two more workshops in France, the company said. Watches continued to underperform, though the 3.1 percent decline was less than analysts predicted.
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