Hermès rides luxury boom to record profits

Published February 19th, 2023 - 09:27 GMT
Hermès rides luxury boom
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ALBAWABA — Hermès International posted record annual profits and sales on Friday, faring better than other luxury sector rivals in China in the last quarter of 2022 and continuing through the Chinese Lunar New Year to solidify its 2023 outlook.


"We saw things going very strongly in China with double-digit growth... including in the fourth quarter," Axel Dumas, Hermès chief executive officer, said while not giving detailed figures.


Annual net profit reached 3.4 billion euros last year, a 38 percent jump from 2021, on sales of 11.6 billion euros, a rise of 29 percent year-on-year, Hermès said.


Annual recurring operating profitability reached a record 40.5 percent, up from 39.3 percent in 2021, while operational investments represented 518 million euros and adjusted free cash flow reached 3.4 billion euros, the company said.


Hermès said its sales rose by 30.7 percent in the Asia-Pacific region, excluding Japan, in the last three months of 2022, while sales in the Americas region surged by 46 percent and 21.5 percent in Europe. Japan recorded a steady, sustained increase in sales of 20 percent.


The company reinforced its operating investments by 1.5 billion euros while creating 4,300 jobs globally over the past three years and plans more hiring in 2023, it said in its full year results statement.


The last year was "very strong despite all the uncertainties" thanks to the attractiveness of its brand, said Dumas in an earnings conference call.

The company "enters 2023 with confidence, on the strength of its unique and particularly solid business model", Dumas added,


Thanks to its unique business model, Hermès is pursuing a long-term development strategy based on creativity, maintaining control over know-how and singular communication, the company added in the statement.


Shares closed up 0.34 percent at 1,747 euros on Friday.



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