Hermes lifts forecasts, sees no slowdown
PARIS (Reuters) - French luxury goods maker Hermes (HRMS.PA) raised its full-year sales outlook on Thursday as it posted a 15.7 percent increase in revenue at constant currencies for the third quarter.
Contrasting with bigger luxury rivals such as LVMH (LVMH.PA) and PPR (PRTP.PA) which have suffered a slowdown in sales, particularly since the summer, Hermes saw growth accelerate during the quarter from 13.4 percent in the previous three months.
The maker of 12,000-euro handbags and 400-euro silk scarves predicted 2012 sales growth at constant exchange rates could exceed 13 percent, lifting a previous forecast of 12 percent, already raised in August from 10 percent.
Hermes's leather goods sales were up 11.2 percent during the period at constant currencies while the luxury brand's fashion and accessories revenue was up 21.1 percent and silk and textile goods rose 14.2 percent.
The company said the current operating margin for the year was expected to be between the 2010 level and the record high of 31.2 percent achieved in 2011. It estimated that at the end of September currency fluctuations generated a positive impact of 143 million euros ($182.40 million) on sales.
Last year, Hermes spent significant amounts of cash buying back its own shares, even though their price stood at record levels, as it aimed to block an approach from LVMH which has built up a 22.6 percent stake in the company.
Paris prosecutors last month launched a preliminary criminal investigation into the conditions surrounding LVMH's stake-building.
In September, Hermes asked prosecutors to open a probe into alleged insider trading and share manipulation related to LVMH's stake-building two years ago.
LVMH controls a vast portfolio of luxury brands including leather goods maker Louis Vuitton and Roman jeweler Bulgari.
On Thursday, Hermes said it did not buy back any of its own shares during the third quarter.
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