Hermes profit beats forecasts but growth slows as China stalls

City A.M. Reporter
FRENCH luxury goods firm Hermes yesterday posted a 10.3 per cent rise in first-quarter sales, pulled by strong demand in Asia particularly for its silks, accessories and ready-to-wear.

Hermes generated revenue of €856.8m (£732.4m) in the three months to 31 March, up 12.8 per cent at constant currencies, and slightly ahead of expectations.

The maker of €13,000 Birkin leather bags and €400 printed silk scarves said watch sales fell five per cent during the period, hit by a slowdown in the Chinese market.

Leather sales growth slowed in the first quarter to seven per cent from 15 per cent in the fourth quarter last year but Hermes said production capacity, which held up sales in the past, would “increase steadily” in 2013.

Hermes’s overall performance marked a slowdown against the same period last year which saw growth of 17.6 per cent.

Archrival LVMH said last week growth at its fashion and leather unit came in at three per cent in the first quarter at constant currencies, against sales growth of 14 per cent last year.

Hermes did not comment on its outlook for the year.

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