@pursebop, Maple and Ash, Chicago.
Back in July, we covered the release of Hermes’s first half financials (Read: Hermes Weathers the Luxury Storm for Now). While the rest of the luxury industry flailed after Brexit, Hermes seemed to be in a much stronger financial position. (Read: Brexit…and Bags) Second quarter revenue was up over 6% and sales overall in the first half trounced analyst expectations (8.1% actual vs 5.6% predicted). Shares were up 24% on the year through the beginning of this week.
But what a difference a few months can make…
On Wednesday in his latest conference call, CEO Axel Dumas publicly scrapped Hermes’s ambitious 8% target for annual sales growth. While this reassessment was hinted at in July, his definitive statement brought on the biggest decline in Hermes shares in three months (down 7.7%).
Here’s his assessment, as reported by Bloomberg:
“We have to be frank and transparent, we see first-half results that were better than expected, but there is a lot of uncertainty around the world and the rigidity of written guidance means we are less flexible.”
Brushing aside the financial-speak, Dumas is acknowledging that the company can’t in good faith offer a valid case for 8% growth. He didn’t present an alternative target, which might mean the situation is even worse than it appears…we’ll keep watching this space, stay tuned.
Picture courtesy @xdinogx
Pic courtesy @tellementluiblog
Read related articles below:
Hermes Weathers the Luxury Storm for Now
Hermes Bulletin Board #6
Chanel Increases Prices to Compensate for Brexit
Handbags Keep Luxury Afloat
Luxury Market Expected to Bottom Out This Year
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Updated: May 27th, 2017
Comments
2 Responses to “Hermes Sales Decline Despite Ambitious Goals”
Hermes loses much sales revenues to others by making the availability of its bags, particularly Birkin and Kelly bags, too limited. For example, when I went to a vacation in Europe, I budgeted my money to buy Hermes bags. However, due to unavailabilities of the bags at several Hermes stores I stopped by in different European cities, I instead spent my money at other stores, such as VCA, Cartier, and Chanel.
love the new colors of the hermes pureses