Hermes sales slow, but profit margins are headed for a record
Fourth-quarter sales slowed more than expected, but the luxury goods group is confident that the upswing in the industry will persist in the coming year
Paris — Hermes reported a slowdown in sales growth in the fourth quarter, as stocks of its coveted handmade bags ran low — although the French luxury goods maker said margins probably hit a record last year and it remained upbeat for 2018. Hermes, famed for its $10,000-plus handbags such as the Birkin and its squared silk scarves, is benefiting along with peers such as Louis Vuitton owner LVMH from growing appetite among younger shoppers and a pick-up in Asian demand. That backdrop should stretch into this year, Hermes said, even as the company deals with tougher year-ago comparisons — such as in its silk division during the fourth quarter — and some negative currency effects. "There is good momentum in our industry because of demographics and because of the economic growth of China and the worldwide economy," CEO Axel Dumas told journalists. "We are confident for the future and it will continue I hope at this kind of pace." Hermes’ sales at constant currencies rose 5% in the fourth...
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