* Overall sales up 25.5 percent
* Growth rate tops rivals
* Japan sales flat, Americas sales jump a third
* Full-year sales growth forecast confirmed
* Shares jump 7.6 pct to 6 1/2 month high
(Adds CEO and analyst comments, updates shares)
By Astrid Wendlandt and Christian Plumb
PARIS, May 11 Hermes (HRMS.PA) lifted sales by a
quarter on soaring demand for watches, silk scarves and fashion
accessories, topping three-month growth at European rivals in
the resurgent luxury goods market.
The share jumped as much as 7.6 percent to a 6 1/2-month
high as investors anticipated an earnings upgrade following a
restrained outlook from the purveyor of silk handkerchiefs and
10,000-euro crocodile leather handbags.
The group, enjoying a rebound in the United States and
strong demand in France and Asia, benefited from solid appetite
for discreet and conservative luxury items and said April trends
were in line with the first quarter.
But Chief Executive Patrick Thomas kept the 2011 sales
growth target at 8-10 percent.
"I prefer to remain prudent," Thomas told Reuters in an
Hermes first quarter sales growth - 21 percent at constant
currencies - compared with 14 percent at LVMH and 22.1 percent
at the luxury division of PPR (PRTP.PA).
Sales hit 637 million euros ($890 million), compared with a
forecast for 583 million, helped by new collections in silks and
"It's worth noting that this is the latest of several
consecutive quarters in which the silks and textiles unit has
exceeded expectations," CM-CIC Securities analyst Merav Atlani
said in a research note.
Hermes' buoyant figures, combined with Bulgari's BULG.MI
strong first-quarter sales published on Tuesday, helped lift
European luxury goods stocks.
By 1222 GMT, Hermes stock was up 5.26 percent at 170.20
euros, with LVMH (LVMH.PA) ahead 2.6 percent, Richemont CFR.VX
up 2.7 percent and Swatch UHR.VX 2.3 percent firmer.
"The numbers are impressive," a UBS analyst said, referring
to Hermes, which is fighting off an advance by larger rival
LVMH, which has built a 20 percent stake.
"The market believes the compay's growth target is much too
conservative and there could be earnings upgrades in the works,"
said one Paris-based analyst. "Also the stock is not very
LUXURY SECTOR LIFTED
Hermes said sales gains were also strong in perfumes, where
it introduced a new fragrance, helping propel a 33 percent rise
at constant currencies.
On the same basis, watch sales rose 34 percent and silks and
textiles, including the scarves which made the brand famous,
jumped 26 percent.
Thomas warned that the operating margin, which reached 27.8
percent for 2010, could drop slightly this year due to high
comparatives against last year.
"It will be in line with last year but there could be a
slight decline," he said.
Hermes' European sales rose 21 percent, while sales in the
Americas soared 33 percent. Asia, excluding Japan, rose 27
Sales in Japan were flat for the period, reflecting the
earthquakes, tsunami and nuclear disaster that pummelled
consumption in one of the world's top luxury goods markets.
(Additional reporting by Pascale Denis; Editing by David
($1 = 0.7158 euro)