Thanks to TPFers, Hermes posts solid rise in profitss

Dec 16, 2007
1,477
11
there's no place like Hermes
(Forbes) Hermes International saw a 24% gain in U.S. sales in the first two quarters of the 2008 fiscal year compared with the same period in 2007. The company also reported a 12.1% sales increase in the second quarter of 2008, to $398.1 million euros ($631 million) from $355.5 million euros ($564 million) in that same period in 2007

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PARIS, Aug 29 (Reuters) - Paris-based luxury group Hermes (HRMS.PA) on Friday posted a solid rise in first-half profits, helped by resilient demand from non-French buyers for its themed silk scarfs and upmarket leather goods.

Hermes, whose handbags start at 1,200 euros and can fetch 50,000 euros, said it planned to open or renovate about 15 stores in the second half.

The group, which also designed an interior for a Eurocopter (EAD.PA) helicopter, also agreed to enter into a joint venture with the Monaco-based yacht maker Wally to "conceive and develop innovative projects."

No further details were given.

The French group saw operating profit rise to 203.8 million euros ($301.4 million) in the six months to June 30, up from 178.6 million euros, while net profit reached 134.9 million euros, up from 128.1 million euros last year.

The leather goods group boasts some of the fattest margins in the industry.

Hermes, known for its "H" embossed belts and decades-old perfumes such as Bel-Ami and Caleche, generated an operating margin of 25.1 percent in the first half, up from 24.8 percent last year.

Comparatively, Italy's Tod's group (TOD.MI: Quote, Profile, Research, Stock Buzz) on Thursday posted a flat first-half operating margin of 18.2 percent.

Hermes, which has diversified over the years into fine tableware and shoe making, also said it had increased its holding in Jean Paul Gaultier to 45 percent from 35 percent.

The group also owns the quintessentially British shoe maker John Lobb.

It said it planned to open shops in the second half in several countries, including in San Diego in the United States and in China.

Hermes is also the European luxury sector's most expensive stock. It is trading at 34 times this year's earnings, which puts it at a wide premium to the sector average of about 16 times.

Comparatively, LVMH (LVMH.PA), owner of Louis Vuitton leather goods and Champagne house Moet & Chandon, is on 15 times while Tod's has a multiple of 13.5 times.

Hermes stock has also been alone among its peers in climbing this year, having gained more than 10 percent since Jan. 1.
 
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DiamondS

Hermès collector
O.G.
Oct 2, 2007
4,135
1,748
Europe
Well, this forum is very addictive and makes us crave for more and more, so their growth result is very understandable! :P LOL!
 

Lady Luna

Member
Jun 24, 2008
378
0
I would say it is to daring to attribute the success of Hermes to TPF.
Rather to the fact that Kelly would be here for years, and Birkin would be here for years, and Bolide would be here for years, and Picotin would be here for years. The company represents the timeless value in the fast-changing world, and that's why it trades at such multiples especially when compared to other companies.
 

MissMargaux

TooMuchTrouble
O.G.
Aug 17, 2008
6,115
4
on a dance floor
I agree with lady Luna about it's timelessvalue but also it has status, and chicness and it's exclusitivity. I mean it's not the easiest thing to walk into an H and just say "I'll take that Birkin in the Fuschia".

The scarves are the most beautiuful outthere and are classic, I'm sorry I don't want to offend anyone, but I'm not a huge scarf collector, but if I buy a scarf now, it's H. To me, I've never seen any other scarf as beautiful as an H, the prints, the colors.

And yes, in it's own small way i think a place like tpF can contribute, not maybe by us alone, but what about all the people we tell, talk to that may not chat here but go shopping at H becasue they like what they see on you.?

Anyway, my DH told me about H the min I woke as he had just heard it on his business show. I guess he'll read it when he gets/reads his copy of Forbes

Thanks for posting that hermeshunter, I appreciate it.
 

LoveLouboutins

Shoes, I know!~
Dec 8, 2007
381
6
On cloud 9
I didn't like the Birkin until I started going to the Action thread. You beautiful ladies show how the bags can be worn with so many things in so many ways on so many occasions. So now I am addicted to Birkins!