Hermès International SCA, the French maker of $10,000 Birkin bags, reported a 6.3 percent increase in first-half earnings as sales in Asia rose. Operating profit reached 621 million euros ($818 million) from 584 million euros, Paris-based Hermès said today in a statement. Analysts predicted 617 million euros, according to the median of nine estimates compiled by Bloomberg. Earnings as a percentage of sales decreased to 32.6 percent from 33.1 percent.
Supply constraints and high prices have helped cushion Hermès from weakening Asian demand for large luxury brands that led Gucci-owner Kering SA and LVMH Moet Hennessy Louis Vuitton SA to report lower first-half profits. Still, Japan’s introduction in April of a 3 percentage-point increase in value- added tax and the yen’s slide against the euro contributed to a 6.3 percent decline in second-quarter revenue in that country, one of its largest markets.
Hermès retained its mid-term objective of revenue growth of about 10 percent at constant exchange and repeated that the full-year operating margin should be lower than in 2013. First-half revenue rose 7.9 percent to 1.91 billion euros, and was up 12 percent at constant exchange rates, Hermès said in July. The saddle-maker, which is adding workshops in France and stores worldwide, said at the time that the first-half operating margin would be close to 32.4 percent.