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Hermès rebounds in Q3 with 9 percent revenue rise

By Prachi Singh

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Business

At the end of September 2016, the Hermès Group's consolidated revenues amounted to 3,697 million euros (4,206 million dollars), up 8 percent at constant exchange rates. At current exchange rates, growth was 7 percent.

The Group's stores posted a 9 percent increase in sales at constant exchange rates, in all the regions. Growth was sustained in the third quarter with 9 percent rise at constant exchange rates and 10 percent at current exchange rates.

Revenues rise across geographies

At the end of September 2016, revenues rose in all regions worldwide. Japan posted a 9 percent increase due to its selective distribution network, despite the strengthening of the yen. Asia excluding Japan posted 8 percent sales growth, gained from store openings at Hong Kong Airport and in Macao, after the May opening of Liat Towers in Singapore. In continental China, the rise in sales continued, even though the context remained challenging in Hong Kong and Macao.

Sales in America rose 8 percent benefiting from last year's extensions and renovations. The new boutique in Rio de Janeiro, the second in Brazil, opened in July. Europe posted 7 percent growth, despite the impact of recent events, particularly in France.

Leather goods and saddlery line posts 16 percent rise

In a more adverse context, the company said, growth over the first nine months of the year was driven by the success of leather goods and saddlery segment that witnessed a 16 percent growth driven by the success of the collections and the diversity of models, in particular the bags Constance, Halzan and Lindy, together with Birkin and Kelly.

The ready-to-wear and accessories division was down slightly with 1 percent decline in sales. Its development was driven by the success of the latest women's ready-to-wear collections and shoes. The silk and textiles business line was down 6 percent penalized by the events in France and by slowing sales in Greater China and America. The perfumes division posted 6 percent increase, driven by the success of Terre d’Hermès, the launch of Galop d’Hermès, and by the latest creations such as the Colognes, Eau de néroli doré and Eau de rhubarbe écarlate.

Watches division rose marginally by 1 percent, penalized by a still challenging market. Other Hermès business lines grew 1 percent, which encompass jewellery, Art of Living and Hermès table arts, after strong growth in the 3rd quarter.

Forecasts around 8 percent revenue growth for FY16

For the full year 2016, as indicated in July and in the half year results publication, Hermès confirms its goal for sales growth at constant exchange rates, which should be below 8 percent. Operating profitability, the company said, should be slightly higher than in 2015 given the favourable impact of foreign exchange hedges. In the medium term, despite growing economic, geopolitical and monetary uncertainties around the world, the Group confirms an ambitious goal for sales growth at constant exchange rates.

Picture:Hermès Facebook

Hermès