Hermes raises its objectives, the rebound of luxury confirms
July 20, 2010 – 10:05 pmHermes International has raised its growth target Tuesday its sales for the full year given a second strong quarter came to confirm the rebound that began in the luxury sector.
The company said it was now up 10 to 12% of its turnover in 2010, against at least 5% expected previously.The slowdown of the other half is attributable to a less favorable comparison based on the second part of the year, "said Hermes.
The specialist also said luxury aim for a strong increase in EBIT in the first half, exceeding the growth of its turnover to 23% emerged over the period.
"We believe the market (luxury) is well (…) Yes, there is a rebound," said Chief Financial Officer of Hermes, Mireille Maury, in a telephone interview with Reuters."There is an international clientele that is always there, including a Chinese clientele."
Hermes has done in the second quarter revenues of 567 million euros, an increase of 19.8% at constant currencies.
Throughout the first half, sales came in at 1,074.7 million euros, up 20% at constant exchange rates and 22.8% after taking into account the impact of favorable currency rates.
Hermes, which will publish its full interim results on August 31, table as an improvement of at least one point of its current operating margin as a percentage of sales over the year, while awaiting a date " slight increase.
"We anticipate strong feedback from the business of luxury in the first half thanks to continued strength observed in emerging markets, a rebound in U.S. demand (…) and cost control "Bernstein wrote in a note on two other players in the sector, LVMH and PPR.
Mireille Maury added it expected that sales trends in Japan, where Hermes generates 20% of its turnover, are identical between the first and second halves.She also announced that the company planned to invest 180 million euros in various projects such as new stores or remodeling existing stores, against a budget estimated in February that Hermes nearest 170 million.
Around 14.50, the action took 3.3% to 118.60 euros, with a market capitalization of 12.5 billion euros. Since the beginning of the year, the stock has gained 27% after a decline of nearly 7% over the whole of 2009.
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