Hermes Speed Up Sales In The Two Quarter, China Continues To Play The Role Of Growth Engine

The European fashion and luxury industry's second earnings report has been reported again.

Herm s International SCA (HRMS.PA) Hermes international accelerated its growth in the two quarter in the Asian market, especially in the mainland of China.

Last week's Burberry Group PLC (BRBY.L) Bob Lee also announced that the new designer, Riccardo Tisci, has rekindled the needs of Chinese consumers for the British luxury group.

The two financial reports reflect the largest luxury consumer group in the world - the brand name handbags and clothing purchased by Chinese people are not affected by Sino US trade tensions and the cooling of the economy.

Herm s International SCA (HRMS.PA) was on the high level for 1.1% to 651 euros on Tuesday, a new record high, but then the trend was soft, with a 0.2% drop of 643 euros.

The two quarter Herm s International SCA Hermes international realized 1 billion 674 million 500 thousand euros in revenue, an increase of 14.7% over the same period last year, 1 billion 459 million 600 thousand, an increase of 12.3% after the impact of the exchange rate, slightly faster than the 11.6% first quarter growth. Analysts had forecast that the growth rate could only be flat.

Eric Du Halgou t, French group's executive vice president of finance, pointed out at today's analysts' conference call that the group started "very strong" this year, despite the relatively high base in the same period last year, the two quarter continued its first quarter momentum.

In the two quarter, the Asia Pacific (excluding Japan) fixed exchange rate income rose further from 16.9% in the first quarter to 18.6%, and the management revealed that not only the momentum of China's mainland was decreasing, but all the markets in the region had double-digit growth. Both Japan and America have maintained close to 10% growth. As the "yellow vest" movement converges, the local market in France has improved significantly, increasing from 1.4% in the first quarter to 6.2%.

Eric Du Halgou t revealed that two stores in Hongkong had been closed for two and a half days in mid June, which had little effect on the overall performance of the local community. Hard luxury retail presents a completely different picture. Cartier Cartire parent Compagnie Financi re re Richemont SA (CFR.S) and the Swatch Group Group (Swatch) Swatch group, which owns Omega OMEGA and Longines Longines, said last week that social events led to a retrogression in local sales, and more importantly, Hongkong made the largest export market position in Rui in June. Sanford CBernstein luxury analyst Luca Solca estimates that Hongkong's ratio in the global luxury market is 5%-10%.

The watch is the smallest product department of Herm s International SCA Hermes international. The two quarter fixed exchange rate revenue rose 7.6%, up sharply from 22.3% in the first quarter. The two pillar sectors, leather goods and harness and garments and fashion accessories, are still excellent, with annual revenue growth of 12.2% and 16.9% to 844 million 200 thousand euros and 394 million 400 thousand euros respectively.

Other Herm s s departments, including jewellery and home business, took the lead at a rate of 20.8%, earning 130 million 900 thousand euros in the two quarter, and for the first time on the scale of the silk and textile sectors which lagged behind in the near future, and their revenue increased 5.8% to 126 million 200 thousand euros in the two quarter.

Eric Du Halgou t forecast that the medium-term operating margin will be slightly weaker than the 34.5% highest level in the same period last year due to adverse exchange rate hedging. Rogerio Fujimori, an analyst with RBC plus Huang capital market, pointed out that the profit margin outlook basically met his expectations. He raised the target price of Herm s International SCA (HRMS.PA) from 550 euros to 615 euros.