Leather goods and China are the drivers behind Hermès’ growth in the first quarter of 2019. The brand, strong with a 15,5% revenue increase at current rates (11.6% at constant rates), equal to 1.61 billion euro in revenue, is following the quarterly results of LVMH and Kering. The luxury brand’s profits surpassed the forecasts of Factset and Bloomberg, that expected the amount to be around 1.58 billion euro. Revenue generated by the Leather Goods & Handbags’ division, which accounts for half of total revenue, went up by 12.5% thanks to the strong demand and the increment of production capacity. This augmented capacity interested the leather goods’ segment the most and, reads Hermès’ quarterly statement, the Manufacture de l’Allan, the production plants in Guyenne Montereau (that should be completed before 2020) and the new Louviers’ manufacturing cluster, which will produce at full capacity before 2021. The Prêt-à-porter division, for which the Parisian brand points out the grand performance “particularly of footwear”, is also growing. With regards to geographic distribution, Asia recorded a 17% growth thanks to the pull of China’s marketplace. Japan and America +10%. Europe (without France) records +9.5%. France is at a stalling point: +1.4% due to, for the most part, the Gilet Jaunes. “Considering the midum-term, even with growing concerns over economic, geopolitical and monetary uncertainties, the Group confirms its ambitious growth objective for revenue (at constant rates)”, concludes Hermès.
Hermès, 1.6 billion in the first quarter: leather goods and China fly high, the Gilet Jaunes suppress French sales
