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Hermès Profits Decline in Half

Currency fluctuations contribute to 7 percent dip in first-half net profits.

PARIS – Hermès International blamed poor returns on financial investments and currency fluctuations for a 7 percent dip in first-half net profits to 125.4 million euros, or $167.4 million.

The French leather goods and fashion firm reiterated its target of steady sales for the full year at constant exchange rates and a “slight contraction” in current operating income.

Operating income fell 2 percent to 199.8 million euros, or $266.8 million, as sales in the half rose 7.6 percent to 874.9 million euros, or $1.17 billion. Dollar figures are converted from euros at average exchange rates.

At constant exchange, sales in the half eased 0.4 percent, reflecting declines in orders for watches, perfume and tableware and ongoing sluggishness in Japan.

The operating margin in the first half of 2009 stood at 22.8 percent versus 25.1 percent a year ago.

For complete coverage, see Monday’s WWD.