PARIS — Tardy deliveries reined in Hermes International’s first-quarter revenues, but the French luxury firm on Wednesday said the pace quickened in March and April, and that it maintained its goal for full-year organic sales growth of 8 percent.
Hermes reported that sales in the three months ended March climbed 3.3 percent to 324.8 million euros, or $418.9 million, from 314.5 million euros, or $391.5 million, a year ago, driven by robust sales in its main leather goods category. Currency conversions were made at average exchange rates for the respective periods.
Though the numbers fell short of analysts’ consensus expectations for about 5 percent growth, investors drove Hermes stock up 4.8 percent in trading at the Paris Bourse to close Wednesday at 152.30 euros, or $196.46 at current exchange.
“We fell behind [on deliveries] in the fourth quarter [when sales increased 7 percent],” said Mireille Maury, managing director of finance and administration at Hermes. “We’re back on track in the second quarter and are on line to meet our goals.”
Though sales grew 8 percent in Hermes retail outlets, the company was weaker at wholesale, due mainly to late deliveries in small leather goods, watches and tableware, Maury explained.
Watch sales fell 3.8 percent to 20.4 million euros, or $26.3 million, and tableware sales tumbled 10.9 percent to 6.8 million euros, or $8.8 million.
Sales of the so-called “other” items, such as diaries and billfolds, dropped 6.6 percent to 29.1 million euros, or $37.5 million.
Maury said sales of watches were slated to rise and that the firm had logged strong orders at the recent watch fair in Basel, Switzerland. She said the company expected full-year growth in timepieces of 9 percent.
She said deliveries were back up to speed in other categories, too.
As at its competitors, leather goods drove Hermes in the period. The firm said sales of bags and luggage, its largest category, gained 9 percent to 129.2 million euros, or $166.7 million.
Fashion also is performing, with Maury characterizing sales of Jean Paul Gaultier’s second ready-to-wear collection for the house as “very good.” She said overall sales of rtw and fashion accessories, including shoes, gloves and hats, improved 7.2 percent to 75.8 million euros, or $97.8 million.
Fragrance sales jumped 19 percent on “excellent” sales of the new Un Jardin sur le Nil perfume. Silk sales gained 3.6 percent to 36.7 million euros, or $47.3 million.
Maury highlighted a “solid” performance in the U.S., where sales gained 16.7 percent at constant currency rates to 49.6 million euros, or $63.9 million. After exchange conversions, sales in the U.S. were up 12 percent.
Maury said the firm expected a “significant” double-digit increase in full-year sales in the U.S. Last year, Hermes clocked a 20 percent sales gain in the U.S.
Though European sales only rose 8 percent to 52.3 million euros, or $67.5 million, Maury said the firm had seen a return of tourist trade and had felt an “upswing in March and April.”
Japan, with a 3.5 percent sales gain to 95.8 million euros, or $123.6 million, was marred in the quarter by delivery issues that Maury said had been resolved. She said sales there should gain some 8 to 10 percent for the year.