Hermes FY Net profit Leaps 24.6%

Hermès International said net profits shot up 24.6 percent last year thanks to robust demand for its leather goods, silk scarves and perfumes.

The luxury firm said net income totaled 740 million euros, or $951.5 million, versus 594 million euros, or $827.1 million, in the year-ago period.

Hermès also noted its operating margin, which widened to 32.1 percent of sales, attained its highest level since the company went public in 1993.

Operating profits for the 12 months ended Dec. 31 rose 26.4 percent to 1.12 billion euros, $1.44 billion, versus 885 million euros, or $1.23 billion, in 2011.

Dollar figures are converted from euros at average exchange rates for the periods in question.

The company said it would propose a per-share dividend of 2.50 euros, or $3.24 at current exchange, at its general meeting on June 4. An interim dividend of 1.50 euros, or $1.94, was already paid out on March 1.

In a statement, Hermès gave no sales or earnings guidance, and said its cash pile stood at 686 million euros, or $882.1 million, at the end of last year.

Management had previously stated it was sticking to its long-term forecast of 10 percent annual sales growth in 2013.

The firm invested 370 million euros, or $475.7 million, last year, primarily to burnish its store network and production capacity. Hermès opened two new branches, renovated or enlarged a dozen other boutiques, and purchased the property for its unit in Beverly Hills, Calif.

As reported, sales last year rose 22.6 percent to 3.48 billion euros, or $4.48 billion. Stripping out currency fluctuations, sales were up 16.4 percent, exceeding the company’s most recent target of 13 percent consolidated annual sales growth.

While some of its luxury competitors had reported ebbing demand in China, Hermès said sales in Greater China rose 34 percent in the fourth quarter and were up 28 percent in 2012 as a whole.


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