PARIS — Hermès International reported on Tuesday that its second-quarter sales beat expectations with a 17.9 percent jump, thanks to strong momentum in the United States and China.
The French luxury firm also raised sales guidance for 2011, saying it now expects revenue growth of 12 to 14 percent at constant exchange rates. This compares with a previous forecast of average annual sales growth of 8 to 10 percent at constant exchange rates, but remains below the 18.9 percent achieved last year.
Revenues rose to 668.4 million euros, or $961.9 million, in the three months ended June 30, from 566.9 million euros, or $723.3 million, in the year-ago period, representing an increase of 21.8 percent when stripped of the impact of currency fluctuations. Dollar figures are calculated at average exchange rates for the periods concerned.
Hermès, which will publish full first-half results on Aug. 31, said operating profit should register a “significantly” higher growth than sales compared with the first half of 2010.
The company estimated the operating profit margin rose 4 to 5 percent versus the same period last year, including the gain on the sale of its 45 percent stake in Jean Paul Gaultier to Spanish group Puig in May, which generated accounting profits of 30 million euros, or $43 million.
In 2011 as a whole, the group expects the operating profit margin to be “close to the record high achieved in 2010,” Hermès stated. Last year, the margin widened by 3.6 percentage points to 27.8 percent, its highest level since Hermès went public in 1993.
In the second quarter, sales rose 24.4 percent in Asia Pacific, excluding Japan, which posted a 0.5 percent increase in revenues despite the impact of the earthquake and tsunami that hit the country in March. Sales rose 21.5 percent in the Americas and were up 20.8 percent in Europe, fueled by a strong performance in France and the acquisition of two concessions in Moscow in May.
Sales in the company’s own stores were up 17.3 percent in the quarter, while the wholesale channel posted a 15.4 percent increase.
All sectors posted gains, led by ready-to-wear and other accessories, up 34.3 percent, and silk and textiles, up 27.2 percent. Leather goods and saddlery, which accounted for around half the company’s revenues during the period, rose 9.1 percent.
Perfumes were the only pocket of weakness, up just 4.1 percent in the quarter despite the launch of the “Un Jardin sur le toit” fragrance at the beginning of the year. This contrasted sharply with tableware, another category sold outside the company’s own stores, which posted a 38.3 percent jump. Hermès has been placing a growing emphasis on home wares, which represent 40 percent of the offer at its new Paris store on the Left Bank.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia