Hermes Opens Lower as 2021 Results Seen Underwhelming
18 Février 2022 - 9:57AM
Dow Jones News
By Joshua Kirby
Shares in Hermes International SCA sank in opening trade Friday
despite the French fashion firm reaching a record operating margin
in 2021, with analysts pointing to supply issues affecting
performance in the year's final quarter.
At 0819 GMT, share were trading 6.7% lower at EUR1,171.
Revenue for the year surged to almost 9 billion euros ($10.23
billion), maintaining a 33% pace of organic growth versus 2019 in
the second half of the year as in the first, Hermes said Friday.
With the margin reaching a record 39.3%, the company's operating
profit surged to EUR3.53 billion.
The result puts Hermes among the world's most profitable
megabrands, brokerage Bernstein said following the print, noting
that the company also has plenty of scope for price increases
ahead.
However, the results didn't beat consensus expectations in the
way seen recently at luxury-sector peers like French groups LVMH
Moet Hennessy Louis Vuitton SE and Kering, or Switzerland's
Compagnie Financiere Richemont SA, analysts at Citi said. In the
year's fourth quarter, Hermes's core leather-goods category fell
short of expectations with 11% growth over two years given supply
constraints; this issue will need to be clarified by management,
Citi warned.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
February 18, 2022 03:42 ET (08:42 GMT)
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