(Bloomberg) -- French luxury handbag maker Hermes International SCA reported a 10 percent jump in full-year profit, boosted by Asian sales of leather goods and Birkin handbags and as tourists return to its stores in Europe.
Operating profit climbed to 1.7 billion euros ($1.8 billion) on an adjusted basis, the Paris-based company said Wednesday in a statement, in line with the average analyst estimate. The profit margin widened to a record 32.6 percent of sales from 31.8 percent in 2015.
The luxury industry has been reporting signs of improvement after years of ebbing demand in China and a slowdown in European tourism. Tiffany & Co. reported higher-than-expected earnings last week, helped by new stores in Asia and higher-priced jewelry. Gucci owner Kering SA has reported its fastest revenue growth in four years.
Hermes is facing a gradual slowdown in sales growth after outperforming rivals in past years, helped by its product range, which is one of the most exclusive among listed luxury-goods makers. Revenue increased 7.4 percent in 2016 at constant exchange rates, the slowest pace in seven years, the company said last month. In September, Hermes abandoned a mid-term annual forecast for sales growth of about 8 percent, replacing it with a goal for “ambitious” growth.
Shares of Hermes have risen 38 percent in the past year, outpacing the 12 percent increase in a Bloomberg Intelligence index of luxury-goods stocks.
To contact the reporters on this story: Corinne Gretler in Zurich at firstname.lastname@example.org, Thomas Buckley in London at email@example.com.
To contact the editors responsible for this story: Eric Pfanner at firstname.lastname@example.org, Thomas Mulier, Phil Serafino
©2017 Bloomberg L.P.