Hermes International (HESAY) stock gained Thursday after it reported a strong set of first-quarter earnings that added to the gaining momentum of the luxury sector that has seen many houses report double-digit growth.
The group reported sales revenue came in at €1.35 billion ($1.47 billion) in first three months on the year, up 11.2% on constant currency. Sales at group stores were up 13% on constant exchange rates.
Hermes shares rose 0.73% to €436.10 in the opening hour of trading in Paris against a 0.4% slip for the benchmark CAC-40. The stock has gained around 11.5% so far this year but trails the 14.5% advance for the S&P Global Luxury Index.
Hermes, best known for its silk scarves, reported 16% in Asia, excluding Japan, with a positive trend in China and improvements in Hong Kong and Macao. Sales growth in the Americas was up 14% despite an uncertain economic environment.
The Perfumes division saw the best pace of growth, racking up 19% increase, driven by the success of Terre d'Hermes and by the launch of Eau des Merveilles Bleue and Galop d'Hermes. The group also reported 15% growth in Leather Goods and Saddlery, thanks to a sustained pace of deliveries at the start of the year.
Leather has been a strong seller for many luxury goods companies this quarter: Burberry's (BURBY) quarterly earnings were boosted by leather after the category experienced growth in the mid-teen percentage points in the second half, compared with group growth of 3%.
LVMH (LVMUY) and Gucci-owner Kering (PPRUY) also attributed good growth in the quarter to leather products.
"In the medium term, despite growing economic, geopolitical and monetary uncertainties around the world, the Group confirms an ambitious goal for revenue growth at constant exchange rates," Hermes said Thursday, adding that it was too soon to project full year growth.
