French luxury brand Hermès International said sales rose 21.9 percent in the first quarter, reflecting strong demand for its leather handbags and silk squares, both in emerging economies and more mature markets.
Hermès reported revenues totaled 776.9 million euros, or $1.02 billion, during the three months ended on March 31. Stripping out the impact of currency fluctuations, sales were up 17.6 percent in the first quarter. All dollar rates are calculated at average exchange rates for the period concerned.
Sales of ready-to-wear and fashion accessories were up 24.8 percent, while silk and textiles registered a 17.8 percent increase. Leather goods and saddlery rose by 18.3 percent, a sharp improvement on the 10.2 percent increase registered in the fourth quarter, when sales were hampered by insufficient production capacity.
In the wholesale channel, sales of perfumes were up 20 percent, while watches posted a 33.1 percent leap and tableware jumped 29.2 percent. At constant exchange rates, total sales from the brand’s network of directly owned stores rose 17 percent in the first quarter, while wholesale revenues were up 19.7 percent.
In regional terms, non-Japan Asia again registered the best performance in the quarter, up 29.1 percent, but it was closely tailed by Europe — excluding France — which posted a 28 percent rise. In the Americas, sales rose 14.7 percent in the first quarter.
Hermès said exchange rates had a positive impact of 28 million euros, or $36.7 million, on sales during the period. The company bought back 89,482 of its own shares in the first quarter for 21 million euros, or $27.5 million, for its employee share ownership plans.
Hermès shares have risen by close to 20 percent this year on strong sales and continued speculation of a creeping takeover by LVMH Moët Hennessy Louis Vuitton. Hermès bought back 89,482 of its own shares in the first quarter for 21 million euros, or $27.5 million, for its employee share ownership plans and locked up more than half its share capital in a non-listed holding group to fend off a potential attack, they will submit additional protection measures to its shareholders at its annual general meeting on May 29.
Shares in Hermès closed down 1.6 percent at 272.40 euros, or $359.18, on the Paris stock exchange on Thursday.