Birkin bagmaker Hermes said that wealthy Chinese clientele snapped up its products in the fourth quarter even as the rest of the luxury sector took a hit from rising COVID infections helping it beat sales and margin forecasts.
Hermes also saw strong demand from Chinese clients across products during the Lunar New Year, Executive Chairman said on Friday, adding that the company was looking at 2023 with confidence.
Brisk business in the United States, where the company opened a sprawling store on Madison Avenue in New York in September, also helped lift sales.
European luxury brands have benefited from a strong, post – pandemic rebound as shoppers drew on savings during lockdowns to treat themselves to designer label fashion.
But while much of the industry took a hit in China as COVID infections rose at the end of last year, Dumas said Hermes ”continued to see strong desirability in China”.
“We saw things going very strongly in China with double – digit growth…including in the fourth quarter”, he said. He did not give a detailed figure.
Globally, sales for the three months to end – December rose by 22.9% to 2.99 billions euros ($3.2 billion), outpacing analyst expectations for 17% growth at constant rates, according to a Visible Alpha consensus.
The anual recurring operating profitability reached a record 40.5%, up from 29.3% in 2021, the company said.
In the United States, sales jumped 40.8%, marking a contrast some rivals that experienced weaker sales there as business shifted to Europe, with travelling Americans taking advantage of the strong dollar.
Hermes said it would propose a dividend of 13 euros per share at its next general meeting on April 20 and would hand out a 4,000 euro bonus to all its employees this year.