Hermes Shares Fly High After 1st Half Profit Soared Despite China Drag
29 Juillet 2022 - 10:44AM
Dow Jones News
By Joshua Kirby
Shares in Hermes International SCA trade sharply higher Friday
after the luxury-goods company reported soaring earnings for the
first half, heralding possible upgrades to full-year
expectations.
At 0807 GMT, shares were up 9.2% higher at EUR1,355.
Recurring operating income climbed to 2.3 billion euros ($2.35
billion) in the January-June period from EUR1.72 billion a year
before, Hermes said, while the operating margin attained a new
record level of 42%, a point higher than in the same period last
year.
Revenue rose 23% at constant currency in the half-year, reaching
EUR5.48 billion, though the pace of growth slowed in the second
quarter. Sales in China were hit by store closures and sanitary
restrictions in April and May but rebounded in June, Hermes
said.
The company didn't set any financial targets for the year, but
said it remains confident of attaining an "ambitious" goal of
medium-term revenue growth at constant currency. Nevertheless,
consensus estimates for the full year are likely to rise following
the expectation-defying results, analysts at Bernstein said in a
note.
"This set of results confirms that Hermes is likely going to be
[the] most resilient luxury goods player in a recession, and an
appropriate hiding place for those seeking cover," the U.S.
brokerage said.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
July 29, 2022 04:29 ET (08:29 GMT)
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