WWD.com/fashion-news/fashion-features/herm-232-s-net-grows-as-tod-8217-s-falls-17-3-751623/
government-trade
government-trade

Hermès Net Grows As Tod’s Falls 17.3%

PARIS — Hermès International and Tod’s SpA saw their bottom lines move in opposite directions during the first half of the year.<br><br>Hermès registered a single-digit increase in profits, beating analysts’ expectations,...

PARIS — Hermès International and Tod’s SpA saw their bottom lines move in opposite directions during the first half of the year.

This story first appeared in the September 12, 2002 issue of WWD.  Subscribe Today.

Hermès registered a single-digit increase in profits, beating analysts’ expectations, while lower financial income and a higher tax rate pressured Tod’s net income down 17.3 percent in the half.

French luxury goods firm Hermès on Wednesday said net profit increased 6.1 percent in the first half to $93.1 million. Operating profit grew 5.7 percent to $145.6 million. Dollar figures have been converted from the euro at current exchange rates.

Aaron Fisher, luxury goods analyst at Goldman Sachs in London, said the numbers “looked very good.” Goldman Sachs had projected a 2 percent drop in operating profit and a 3 percent decline in net profit.

Hermès stock rose 3.6 percent in trading on the Paris Bourse Wednesday to close at $135.80.

As reported, buoyed by sales in Asia, Hermès’ first-half consolidated sales grew 2.5 percent to $567.5 million.

Meanwhile, Hermès predicted sales growth from recently opened stores. Over the next six months, additional stores will bow in Hyundai, Korea; Aix-en-Provence, France; Nuremberg, Germany, and Naples, Italy.

The firm plans to bolster its fast-growing leather goods category with an additional factory in the Ardennes region of France. Leather goods, with sales of $179.4 million, accounted for 31.4 percent of total first-half sales volume.

Also reporting its results on Wednesday, Tod’s registered net income of $12.4 million from $15 million in the year-ago half.

Tod’s noted that proceeds from its initial public offering in late 2000 have dried up, pushing its financial income down to $14,634 from $4 million the year before. Tod’s also said a higher tax burden chipped away at profitability, with its tax rate rising to 43.2 percent from 32 percent in the first part of last year.

Exclusive of interest and taxes, first-half earnings rose 20.9 percent to $22.7 million from $18.8 million.

First-half sales rose 14.2 percent to $163 million from $142.70 million, in line with preliminary figures that were released last month. Sales in Europe, its biggest market, were especially strong. Sales in Italy advanced 4.1 percent, while sales in the rest of Europe rose 34.3 percent.