Hermes Q4: Analyse d'UBS

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  1. Hermès: Analyse d'UBS

    27/01/2009 - 11:10 - (Bolsamania) - Hermès

    Sales preview, upgrading to Neutral

    Q4 sales on 6 Feb, UBSe €536m (flat yoy pre-FX)
    Hermes will report Q4 08 sales on 6 Feb, before market. UBSe is €536m (flat yoy pre-FX), in line with consensus. UBSe/consensus full-year sales estimate is €1,760m (+12% yoy pre-FX). We think core signature products, leather and silk, showed resilience in Q4 08 (+c.3%) while categories with weaker brand recognition, e.g. watches and tableware, saw double-digit declines. Details on p2.

    Read-through from trading updates so far
    Read-through from peer companies’ sales so far includes; 1. US is the weakest market, down
    15-35% yoy (but Hermes has relatively small exposure, 15% of sales). 2. Consumers favour more traditional/classic brands and designs, 3. Some stabilisation in Dec relative to Oct/Nov, 4. Tourist spending is growing with weak Euro/strong JPY. These suggest Hermes may have outperformed the sector.

    Possible bottom in H1 09, and improvement in H2 09
    Trading conditions remain challenging. However, accelerating and more tailored product launches, end of markdowns, favourable FX, tighter cost control, and easier yoy comps from Q3 09, should improve sentiment in the medium term. We expect such evolutions to lead to an end of consensus downgrades and re-rating.

    Upgrading to Neutral, after 40% share price fall
    We are upgrading Hermes rating to Neutral from Sell, after a 40% share price fall from Nov 08 peak. Our PT and earnings estimates are unchanged (PT €80 based on 5x EV/sales 09E). We believe the excessive valuation premium has corrected to more sustainable levels, and expect less downside risks in share price going forward.


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    http://www.bolsamania.fr/actualites/noticia.php?origen=bolsamania_fr.bms_noticias&id=BMS_N_20090127111054&isin=&Sesion_BolsamaniaFR=5d4d8o0eiosa8a9lobq6qvc5c5
     
  2. Interesting.... although I'm not too surprised to see that their classic products and designs like leathers and silks are strong while lesser-known are declining.
    Thanks for posting!
     
  3. thanks for the info, good to know!
     
  4. My SA at FSH said that sales in Dec were still strong because people still made money in 2008, and they wanted to have a good Chistmas. However, she did not expect sales post-Christmas to pick-up, although while there 2 weeks ago, someone bought a 35 cm shiny orange croc Birkin with diamonds, and a 30 cm shiny black croc Birkin with diamonds at one go! :faint:And the person also bought a few other orange-coloured bags at the same time as well.
     
  5. Thankyou once again beaumonde! love your posts!
     
  6. No surprises there I think ( and many thanks for the post) - but I have my doubts about trusting any UBS analysis - a Swiss bank that just needed to be bailed out by its government - what is the world coming to? I know at my local store sales held up well at Christmas and the new scarves have not had the umph of last years but plans are still going ahead to remodel the store so it can carry more high end goods - gotta speculate to accumulate!
     
  7. Thank you Beaumonde for always posting intriguing articles!
     
  8. I appreciate you posting any financial reports/analysis for Hermes. Thank you!