French luxury giant Hermes posted higher than expected second-quarter sales of 1.25 billion euros ($1.38 billion), up 8.1 percent at constant exchange rates. Analysts had expected around 5 percent growth.
It expected operating profitability in the first half of 2016 to be one percentage point higher than the same period last year thanks to foreign exchange hedging contracts.
Hermes said it had not seen any improvement in tourist flows in France in the second quarter and did not expect any while the country remained in a state of emergency.
“We do not see any improvement in tourist traffic in France and we will not see one while we are in a state of emergency which prevents customers from coming,” said Hermes CEO Axel Dumas
Dumas said Hermes’ sales in France, which make up 14 percent of total revenue, were driven by demand from local customers. The company’s sales in France rose nearly 9 percent at constant exchange rates in the second quarter to June.
Regarding the second half of this year, Hermes said it expected sales growth of leather goods, which represent half of its turnover, to be lower than in the same period last year