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Hermes sees sales and profits surge, shares jump

(Sharecast News) - Shares in Hermes International sparked on Friday after the French luxury goods firm posted strong sales growth and record profitability.

The Paris-based company said revenues increased 21% on a constant currency basis in 2023 to €13.4bn.

Recurring operating income rose 20% to €5.7bn, equivalent to 42.1% of sales, its highest ever, while net profits sparked 28% to at €4.3bn.

Hermes, famous for its silk scarves, exclusive Birkin bags and bright orange branding, said it had seen growth across all geographical areas, including China.

Sales rose 19% in Asia excluding Japan, to €6.3bn, and by 26% in Japan to €1.3bn.

All divisions - known as metiers - also reported growth. Sales rose 17% in leather goods and saddlery, Hermes' biggest division, to €5.5bn, and by 28% in ready-to-wear and accessories to €3.9bn.

Axel Dumas, executive chair, said: "In 2023, Hermes has once again cultivated its singularity and achieved an outstanding performance in all metiers and across all regions against a high base.

"These solid results reflect the strong desirability of our collections."

As at 0930 GMT, shares in Hermes had put on 5%.

Looking to the current year, Dumas told reporters he remained confident about China, despite the country's faltering economy. He also said prices were likely to rise by between 8% and 9%.

Hermes raised prices by around 7% last year.

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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