Hermes Shares Soar After Revenue Rises Amid Luxury Sector Slowdown

By Andrea Figueras

Shares in Hermes jumped after the Birkin bag maker posted a surge in fourth-quarter revenue while some peers experienced a slowdown in sales during the period.

At 0852 GMT shares were up 5.2% at EUR2,181.50.

The French luxury-handbag maker on Friday posted revenue of 3.36 billion euros ($3.62 billion) for the last three months, up 17.5% at constant exchange rates from the prior-year period, beating analysts' expectations of EUR3.26 billion, according to Visible Alpha consensus.

"We see Hermes at the top of the quality group," Bernstein analysts wrote in a research note, adding that the better-than-expected results backed the company's strong brand momentum.

Operating profit for 2023 increased to EUR5.65 billion, slightly above analysts' expecations of EUR5.52 billion, according to Visible Alpha consensus. Net profit jumped 28% to EUR4.31 billion, beating analysts' estimates of EUR4.03 billion.

In the Americas region, Hermes posted revenue of EUR717 million, up 22% at constant exchange rates compared with the prior-year figure.

"Hermes is yet another company to confirm reviving momentum of the American consumers, on the back of resurgent confidence and lower inflation," Bernstein analysts wrote.

Furthermore, the company's news indicating price increases of 8%-9% in 2024 seem positive, Bernstein said.

The company said that is moving into 2024 with confidence and backed its medium-term guidance for revenue growth at constant exchange rates.

Hermes is well-positioned in 2024, as it keeps continued brand heat in both handbags and non-leather categories, Citi analysts Thomas Chauvet and Lorenzo Bracco said in a note to clients.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

February 09, 2024 04:20 ET (09:20 GMT)

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