Source: AFP
French luxury giant Hermes on Friday posted record annual sales and net profit, with plans to reward all workers worldwide with bonuses after strong growth in every region last year.
The group reported better-than-expected profit of 4.3 billion euros ($4.6 billion), up 28 percent from 2022, on sales that rose 16 percent at current exchange rates to 13.4 billion euros.
“In 2023, Hermes once again cultivated its uniqueness and achieved outstanding performance in all (businesses) and all regions against a high base,” executive chairman Axel Dumas said in an earnings statement.
The group said its 22,000 employees worldwide will receive a €4,000 bonus early this year as part of “its policy to share the fruits of growth with everyone who contributes to it on a daily basis”.
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It will also propose increasing dividends for shareholders.
Hermes shares rose more than 4 percent to 2,618 euros in late-morning deals on the Paris stock market, pushing the group above cosmetics giant L’Oreal in terms of market capitalization.
L’Oreal’s share price fell more than seven percent to 420 euros after posting lower-than-expected fourth-quarter results.
Shares in LVMH, the world’s biggest luxury goods group, fell 0.3 percent to 802 euros, although it also reported record annual profits last month.
Gucci owner Kering rose 0.7 percent to 412 euros, a day after reporting a drop in profitability.
“Show of Trust”
Hermes said its sales rose 14.5 percent in Japan and 12.9 percent in the rest of the Asia-Pacific region last year, with the group opening its 33rd store in China, an important market for luxury brands.
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Japan and Asia-Pacific together were the biggest market for Hermes, with total sales of 7.5 billion euros.
Sales rose 19 percent to three billion euros in Europe and 17.1 percent to 2.5 billion euros in the Americas.
“Hermes is yet another company confirming the revival of US consumer momentum, on the back of resurgent confidence and lower inflation,” said Bernstein analyst Luca Solca.
In its outlook for 2024, the company said: “In the medium term, despite economic, geopolitical and currency uncertainties around the world, the group confirms an ambitious target for revenue growth at constant exchange rates.”
It said it would propose a dividend increase to 15 euros per share, from 13 euros in 2022, at its next general meeting in April.
“In addition, an extraordinary dividend of 10 euros per share will be proposed to the general meeting”, it is stated.
“It’s a show of confidence for next year,” Dumas said.
Source: AFP