Hermes Exceeds Expectations With Strong China Demand

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Hermes has exceeded expectations with revenues climbing to $1.4 billion, reported the maison on Thursday. The luxury goods industry may have predicted a slow year, but the Chinese market appears to be improving, giving the luxury handbag maker a much needed sales boost. Rivals Kering and LVMH join Hermes with better-than-expected estimates.

Excluding currency swings, sales climbed 8.8 percent with Asia Pacific leading with a 14 percent. Stock also rose up to 2.4 percent. According to Rogerio Fujimori, an analyst at RBC Capital, the general consensus of the management was always a conservative ‘under-promise and over-deliver’. Indeed, Hermes’ sales may be cushioned by an improving Asian market.

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Following the year’s first nine months, where sales grew an average of 7.7 percent, Hermes performed roughly within expectations of ‘slightly’ below 8 percent. However, chief executive officer Axel Dumas says that Hermes remains wary of the approaching Christmas season.

Sales of leather goods rose a record 16 percent, reportedly sustained by Halzan shoulder bags and Constance purses.

“China is growing at a better pace, mainly because the economy is strengthening and because of domestic consumption,” Dumas told Bloomberg. “In our case, I’m not talking about a rebound, because we always had growth.”

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