Hermès, 6.88 billion in 2019: “re-opening” in China

Hermès, 6,88 miliardi nel 2019: in Cina “situazione di riapertura”

Hermès’ revenue in 2019 was of 6.88. Accessories and leather help the luxury brand surpass the challenges posed by Hong Kong and Paris during the year in question. As far as 2020 goes, Axel Dumas, CEO of Hermès, foresees the situation going back to normal after a rocky star.

Quarterly slowdown

The French brand’s sales slowed down in the fourth quarter of 2019. Turnover was “limited” to 1.87 billion euro, mainly due to the protests in Hong Kong and the increased taxes on sales made in Japan. Yet, the increment is significant: +10.7% at constant rates, in line with analysts’ expectations, points out Reuters. The slowdown becomes more apparent when considering that the quarter before, the increment was of 15%.

Bright yearly performance

Hermès’ 2019 was concluded with a revenue of 6.883 billion euro, up 15% at current rates and 12% at constant rates. Net income at 1.528 billion euro, 22.2% of total revenue, while the year before it was 23.6% of total revenue. The company’s income statement highlights EU sales, excluding France, where the growth rate was of 8% thanks to the UK and Italy.

Leather. Leather goods and footwear

Sales of the Leather Goods and Saddlery division grew by 11% thanks to the demand for “re-invented classics and other models. For example, the Mosaïque, 24/24 and Twins handbags”. The Prêt-à-Porter and Accessories division increased sales, meanwhile, by 17%, with the footwear segment growing at a surprisingly rapid rate. The group had 15,417 employees at the end of 2019 (1,100 more than the previous year), 9,522 of which, located in France.

The comment

While commenting the luxury brand’s results, its CEO Axel Dumas stated he is starting to see China’s situation returning to normal, and thus the shops will soon re-open: “10 days ago we were all discussing the closing of stores, while now we talk about opening them back up”. Dumas added that the impact of the protests in Hong Kong was lower than expected. In other words, many tourists cancelled their trips to Hong Kong but made their purchases elsewhere. Last but not least, Hermès’ CEO admitted that it is too early to evaluate the impact of the current health crisis for the brand’s results: “Hermès will be among the more resilient players, when considering the situation caused by the Coronavirus”, said Sanford C. Bernstein’s analyst Luca Solca, in a note transcribed by Bloomberg. “Waiting lists for its iconic products should partially compensate the brand’s exposure to China’s and, in general, current global situation”.

Image taken from da hermes.com

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