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.