Hermes Reopens in Mainland China and Resumes French Workshops
(Bloomberg) -- Hermes International reported a smaller decline in first-quarter sales than analysts expected and said it has reopened all of its mainland Chinese stores, preparing for a bounce back in demand after the coronavirus outbreak erased demand for luxury goods.
- First-quarter sales fell 7.7% excluding currency swings. Analysts had predicted a 12% drop.
- Hermes has been gradually resuming operations at its French workshops since April 14, having shuttered them a month earlier. With the majority of products produced in-house in France, Hermes could be among the brands most exposed to supply constraints when stores reopen.
- The company said it maintained its “ambitious” goal for revenue growth at constant exchange rates in the medium term. Sales have been increasing by a double-digit percentage in mainland China since reopening, Chief Executive Officer Axel Dumas told reporters. Still, sales in the U.S. and Europe have ground to a halt, which will weigh on the second quarter.
- Like many other companies, Hermes lowered its dividend to bolster cash reserves. The dividend will be 4.55 euros a share, 9% less than previously planned.
- The shares have gained 1% this year, the only stock that has risen in France’s CAC 40 Index.
- Read the release
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