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Hermes H1 profits at record level, cautions over impact of strong euro
September 14, 2017 / 6:13 AM / 3 months ago

Hermes H1 profits at record level, cautions over impact of strong euro

PARIS, Sept 14 (Reuters) - French luxury goods maker Hermes said on Thursday that its first-half operating margin climbed to an all-time high of 34.3 percent of sales, boosted by favourable foreign exchange hedging contracts set up in 2016.

Chief Executive Axel Dumas cautioned, however, that the first half performance could not be extrapolated to the full year even though the company was “fully hedged” against a stronger euro in 2017.

There could therefore be a negative impact from a stronger euro on 2018 profits, Dumas said on a call with journalists.

Hermes, known for its $10,000 Birkin bags and $400 printed silk scarves, said operating income from recurring operations rose 13 percent to a record high of 931 million euros ($1.11 billion) in the first-half of 2017.

The first-half 2016 operating margin had stood at 33.9 percent of sales.

Hermes said it was keeping an “ambitious” medium-term goal for revenue growth at constant exchange rates despite growing economic and geopolitical and monetary uncertainties.

$1 = 0.8425 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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