PARIS (Reuters) - French luxury group Hermes (HRMS.PA) stopped short of giving an updated forecast for 2010 on Thursday after posting a rise in operating profit for 2009 in spite of the industry’s worst downturn in two decades.
Paris-based Hermes, one of the only luxury goods groups to enjoy any growth last year, bucked the global trend after reporting a 4.1 percent rise in its sales compared to an 8 percent fall in global luxury sales according to U.S. consultancy Bain & Co.
Hermes reported operating profit of 462.9 million euros ($622.2 million) for 2009 against 449.2 million the previous year but overall its operating margin reached 24.2 percent, down from 25.5 percent in 2008.
At constant exchange rates, the company said its operating profit was up 3.9 percent against 2008, and operating margin remained stable.
The group’s net profit in 2009 reached 288.8 million euros against 290.2 million euros in 2008.
By comparison the world’s biggest luxury goods group, LVMH (LVMH.PA), in February reported an 8 percent drop in profit from recurring operations last year on revenue down 4 percent on a like-for-like basis.
While several luxury stocks including Burberry (BRBY.L) and Richemont CFR.VX have more than doubled in value over the past 12 months, Hermes shares have gained 32 percent, held back by their high rating compared to the sector.
Hermes proposed a small dividend increase to 1.05 euros a share for 2009, up from 1.03 for 2008.
At the end of the year, the company had cash of 508 million euros, up 57 million euros against 2008.
Hermes shares are trading on a price to earnings ratio of more than 34 times on this year’s forecasts while the European luxury sector average is trading on 15-18 times.
Hermes shares opened 3.5 percent down at 101.60 euros, valuing the group at about 11 billion euros.
Reporting by Astrid Wendlandt, editing by Will Waterman, Mike Nesbit