PARIS — Hermès International lifted its 2013 sales guidance on Wednesday as it reported sales improved 5.5 percent in the third quarter to 895.5 million euros, or $1.19 billion.
This story first appeared in the November 7, 2013 issue of WWD. Subscribe Today.
Stripping out the impact of currency fluctuations, the increase stood at 12.9 percent and represented a double-digit pace in both retail and wholesale channels.
The gain bested many of the French firm’s luxury peers. LVMH Moët Hennessy Louis Vuitton, which holds a 23.1 percent stake in Hermès, said its third-quarter revenues rose 1.7 percent while sales in Kering’s luxury division gained 1.5 percent in the period, as reported.
Hermès said it now expects annual consolidated revenue growth “could exceed 11 percent.” Last July, the company said the figure could “slightly” exceed the midterm growth target of 10 percent.
The company reiterated that current operating margin could be close to the all-time high reached in 2012, depending on exchange rate fluctuations.
Europe’s big luxury players are facing significant currency headwinds this year, primarily due to a weaker yen. According to Hermès calculations, exchange rates wiped 116 million euros, or $152.8 million, off its revenue tally for the first nine months of the year.
In the nine months, sales gained 9.1 percent to 2.66 billion euros, or $3.51 billion. At average exchange rates, the increase comes to 13.9 percent.
Dollar figures are calculated at average exchange rates for the periods in question.
In the three months ended Sept. 30, sales at constant exchange advanced 17.6 percent in the Americas, 16.4 percent in Asia-Pacific, 12 percent in Europe excluding France, 8.7 percent in France and 5.8 percent in Japan.
In the quarter, Hermès opened stores in Ningbo, China, and at Mitsukoshi in Nagoya, Japan, and inaugurated its enlarged and overhauled flagship in Beverly Hills.
By product category, sales improved 18.9 percent for ready-to-wear and fashion accessories, 12.7 percent for silk and textiles, 8.4 percent for leather goods and saddler, 5.3 percent for watches and 5.1 percent for perfumes.
Hermès noted that it was able to ramp up capacity at new leather goods factories in the Isère, Charente and Franche-Comté regions of France.
It also trumpeted that watches resumed growth in the quarter, while warning it faces high comps from last year.
A 37.5 percent jump in sales of “other sectors” in the nine months reflects “the vitality of the jewelry sector” and strong consumer response to expanded selections of home wares, the company noted.