Hermes intl: With stronger growth than LVMH and Kering, Hermès is seducing the stock market

(BFM Bourse) – Hermès continues to excel in a dynamic sector, posting impressive organic growth and insolent margins of more than 40% in the first half of 2022. The market applauded and took the luxury segment giant to higher annual high.

Sales growth at the Faubourg Saint-Honoré saddler far exceeded analysts’ expectations in the first half, although activity in China has been slowed in recent months by the return of lockdowns, particularly in Shanghai. .

During the first half of 2022, the turnover of Hermès International largely exceeded expectations, at 5,475 billion euros, increased by 29% compared to the first half of 2021. at 5.3 billion euros. At constant exchange rates, sales growth was 23%.

If LVMH (+ 16% in organic) then Kering (+ 21%) already impressed the market in the last days, the saddler also exceeded the expectations of the market, counting the half-year profit of 5.3 billion which is euro.

A record margin

Current operating income increased by 34% and amounted to 2.3 billion euros against 1.72 billion euros in the first half of 2021, creating a “record” current operating margin of 42.1%. The group’s half-year net income reached 1.64 billion euros in the first half, up 39.7% a year.

“The good momentum of the results of the first half confirms the development of our 16 businesses and the strong desire of our goods, designed by artisans in a sustainable method, without compromising on quality . In an unstable context, we are moving forward with confidence. , true to our responsible and committed business model vis-à-vis our employees and our partners”, welcomed the manager of Hermès Axel Dumas, as quoted in the press release.

This stratospheric performance also allowed the Hermès International title to rebound by 7.7% to 1336 euros around 11:00 am – the action being one of the most expensive on the French coast.

“Very strong performance” in all regions

In the first half of 2022, all regions posted very strong performances, with Asia holding up well despite the context of China’s health. Sales in group stores (+23%) benefited from the strengthening of the exclusive omnichannel network and online sales. The growth in wholesale sales (+25%) resulted in particular from the recovery of sales to travelers.

Asia excluding Japan (+15%) was buoyed by strong momentum across the region, and particularly by continued activity in Singapore, Australia and Korea. Greater China bounced back strongly in June, after being hit by health restrictions and store closures, particularly in Shanghai and Beijing in April and May. After reopening the renovated Pacific Place stores in Hong Kong and One Central in Macao at the beginning of the year, a new store was successfully inaugurated in Zhengzhou at the end of March, in Henan province. in China.

Japan (+ 20%) showed an outstanding performance, based on the loyalty of local customers. The America zone (+34%) continued to enjoy excellent momentum at the end of June. In the United States, a new store was inaugurated in Austin in April, the third House store in Texas.

Europe excluding France (+34%) and France (+41%) continued their strong growth, thanks to the loyalty of local customers and the recovery of tourist flows, especially in France, United Kingdom and Italy.

A loyal client

At the end of June 2022, all business lines confirmed their growth. The increase in Leather and Saddlery (+ 12%) is based, according to Hermès, on continued demand and an increase in production capacity, in line with its annual objectives. The Clothing and Accessories division (+36%) continued its good momentum, driven by the success of ready-to-wear collections, fashion accessories and shoes. Other Hermès businesses (+33%) continued their strong momentum, thanks to the Home universe and Jewelry.

True to form, the saddler did not reveal any estimated prospects. For 2022, it is still “difficult” for the group to assess the effects in the health context. “The highly integrated artisanal model, the balanced distribution network, the creativity of the collections and the loyalty of the clients allow us to approach the future with confidence” added Hermès.

In the medium term, despite the economic, geopolitical and monetary uncertainty in the world, the group confirmed an “ambitious” goal of growth in turnover at constant exchange rates.

Sabrina Sadgui – ©2022 BFM Bourse

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