Hermes' shares reach record high as booming sales outpace rivals
By Mimosa Spencer
PARIS (Reuters) — Hermes' shares rose to a record high on Friday after the Birkin bag maker again outpaced its rivals at the end of 2023 and said it will further raise its prices.
The company plans to lift prices by between 8% and 9% this year globally, executive chairman Axel Dumas told reporters, adding that the company was very confident about the Chinese market.
Hermes has become one of the most consistent performers in the luxury goods industry, including when economic conditions deteriorate, thanks to its classic designs and careful management of production and stocks, which helps maintain the label's aura of exclusivity.
«Hermes is playing in a different league,» JPM analysts said in a note. «Hermes comes in today showing, in our view, what a real over delivery is about,» they said, pointing at strong brand momentum and strong cash returns to shareholders.
Citi analysts said: «Hermes is well-positioned in 2024.»
Shares in the company opened 4.2% higher after sales for the three months to the end of December totalled 3.36 billion euros ($3.62 billion), up 17.5% at constant foreign exchange rates and ahead of expectations for 14% growth, according to Visible Alpha consensus estimates.
Hermes raised prices by around 7% globally last year to account for higher production costs, with the exception of the U.S., where increases were around 3%, and Japan, where they were in the double digits due to currency fluctuations.
The French luxury label clocked strong growth in all regions, and flagged «dynamic» growth in China where investors have been worrying about a stuttering recovery post-COVID.
Hermes said it will pay a 4,000 euro bonus to each of its over 22,000 employees worldwide.
«There has been no
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