PARIS – French luxury giant Hermes posted on Feb 9 record annual sales and net profit, with plans to reward all employees worldwide with a bonus following strong growth in every region in 2023.
The group reported a better-than-expected profit of €4.3 billion (S$6.2 billion), up 28 per cent from 2022, on sales that surged 16 per cent at current exchange rates to €13.4 billion.
“In 2023, Hermes has once again cultivated its singularity and achieved an outstanding performance in all metiers (businesses) and across all regions against a high base,” executive chairman Mr Axel Dumas said in an earnings statement.
The group said its 22,000 employees worldwide would get a €4,000 bonus early in 2024 as part of “its policy of sharing the fruits of growth with all those who contribute to it on a daily basis”.
It will also propose an increase in dividends for shareholders.
Hermes shares rose by almost 5 per cent on the Paris stock exchange on Feb 9 to €2,174.50, propelling its market capitalisation above cosmetics giant L’Oreal and making it France’s second-largest company behind luxury goods rival LVMH.
L’Oreal’s stock price fell more than 7 per cent to €418.80 after posting lower-than-expected results for the fourth quarter.
Shares in LVMH, the world’s largest luxury goods group, were up 0.4 per cent to €807.50. It also reported record annual earnings in January.
Gucci owner Kering was up 0.9 per cent to €413.10, a day after reporting slumping profits.
Hermes said its sales climbed 14.5 per cent in Japan and 12.9 per cent in the rest of the Asia-Pacific region in 2023, with the group opening its 33rd store in China, a major market for luxury brands.
Japan and Asia-Pacific together were the biggest market for Hermes, with total sales of €7.5 billion.
Sales rose 19 per cent to €3 billion in Europe and 17.1 per cent to €2.5 billion in the Americas.
“Hermes is yet another company to confirm reviving momentum of the American consumers, on the back of resurgent confidence and lower inflation,” said Mr Luca Solca, an analyst at Bernstein.
In its outlook for 2024, the company said: “In the medium term, despite the economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates.”
It said it would propose a dividend increase to €15 per share, up from €13 in 2022, at its next general meeting in April.
“In addition, an exceptional dividend of €10 per share will be proposed to the general meeting,” it said.
“It’s a show of confidence for the coming year,” Mr Dumas said. AFP