Hermes International SCA (RMS) gained 1 percent Friday, right after the maker of Birkin and Kelly bags raised this year’s sales-growth target as first-half earnings beat estimates. Hermes rose as much as 4.1 percent in Paris trading and was up 2.1 percent at 228.45 euros as of 9:36 a.m. Hermes shares closed Thursday at 223.7 euros (US$281/Rs 1,560). The gain erased the stock’s decline this year, which had followed surges of 47 percent in 2011 and 68 percent in 2010, stressed analysts. The luxury label has also raised this year’s sales-growth target after first-half earnings beat estimates on Asian demand for luxury products. Hermes last month reported second-quarter sales rose 22 percent to 814.5 million euros (1.02 billion dollars/Rs 5, 663 crores), exceeding the 799.3 million-euro (1004 million dollars/Rs 5,574 crores) average of three analysts’ estimates compiled by Bloomberg. Eastern winds have blown for Hermes lately, and a good sample of it is how the group got about 47 percent of sales from Asia in the second quarter, compared with 35 percent from Europe and 16 percent from the Americas. Sales in the region, other than Japan, rose 25 percent in the half-year, led by China, Singapore and Hong Kong, the company said. The maker of Birkin and Kelly bags’ annual sales growth excluding currency shifts “could be around 12 percent,” it said today in a statement. The Paris-based company last month said it targeted annual revenue growth of 10 percent. Second-quarter sales rose 22 percent to 814.5 million euros (1.02 billion dollars/Rs 5,663 crores), exceeding the 799.3 million-euro (1004 million dollars/Rs 5,574 crores) average of three analysts’ estimates compiled by Bloomberg. In the same vein, operating income climbed to 510.9 million euros (641 million dollars/Rs 3, 558 crores) from 418.1 million euros (525 million dollars/Rs 2,914 crores) a year earlier, higher than the 502 million-euro (630 million dollars/Rs 3,497 crores) average of three analysts’ estimates. Net income gained 15 percent to 335.1 million euros (421 million dollars/Rs 2,337 crores), beating the 320.7 million-euro (402 million dollars/Rs 2,231 crores) average of three estimates compiled by Bloomberg. The report was “good and reassuring,” said Thomas Mesmin, an analyst at Cheuvreux in Paris in a note to investors. Mesmin talked as well about “a very strong performance.”Source: Fashion United
