Hermes Sales Soar as Birkin Bag Maker Shows Resilience
(Bloomberg) -- Hermes International shares rose to a record after the maker of the iconic Birkin bag joined other luxury-goods companies in reporting a surge in sales as key markets in Asia recover from the pandemic.
Revenue soared 44% at constant exchange rates in the first quarter, Hermes said in a statement Thursday. Analysts expected growth of 27%.
Hermes’ limited supply of goods, from silk scarves to leather handbags, has typically helped the French brand’s mystique and pricing power. With much of Europe mired in lockdowns since the start of the year, Hermes relied on the appetite of consumers in Asia, where sales jumped 74%. The company opened a store in Tokyo in the period, contributing to the upbeat performance of the Japanese market.
While the pandemic makes trends difficult to predict, the luxury company confirmed an “ambitious goal” for revenue growth in the medium-term. Chief Financial Officer Eric du Halgouet pointed notably to potential new restrictions in Japan amid a rise in infections there. After increasing the prices of its goods by around 1% last year, Hermes plans a 1.4% increase this year, he added.
Hermes shares rose as much as 3% to a record 1,057 euros in Paris trading. The stock surpassed 1,000 euros ($1,204) last week for the first time.
Hermes at Record After 1Q ‘Smashes’ Consensus Estimates
The sales results reflect “the strength of the brand driving continued polarization between winners and losers” among luxury houses, as well as a “return to normal levels of leather goods production and deliveries,” Thomas Chauvet, a Citigroup analyst, wrote in a note.
Hermes’ production capacity was hurt a year ago with the first lockdown in France, where its goods are made.
©2021 Bloomberg L.P.