Hermes International has reported first-quarter leather-goods sales that beat analysts’ estimates as the French luxury company boosted purse production and the aftershock of November’s Paris terror attacks eased.
Revenue reached €1.19bn, matching the median analyst estimate. Sales rose 6.2%, excluding currency fluctuations. The shares gained up to 2.7% in Paris.
“The biggest and most profitable luxury-goods division saved the day,” wrote Rogerio Fujimori, an analyst at RBC Capital Markets.
“France was surprisingly resilient, which probably was driven by its loyal local clientele,” he said. Hermes’s Parisian stores are still suffering from the fallout of last year’s terror attacks, as well as the recent bombings in Brussels, chief executive Axel Dumas said on a call with reporters. While store visits in London and Milan are back to normal levels, Paris has yet to recover, he said. Leather-goods and saddlery revenue rose 15% after it boosted production facilities in France last year, boosting supplies.
The company’s 15th leather workshop opened this month and investments in another are continuing, Hermes said. Sales of every other major product line dropped.
Hermes has served fewer customers in the Middle East due to a drop in tourism and the plunging price of oil, Mr Dumas said. n Bloomberg
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