Hermes International SCA posted second-quarter results, revealing a slowdown in growth, though logging a sizable growth nonetheless. The companys key market in Japan saw a serious contraction with a weaker yen weighing on earnings.
Hermes International SCA announced that its revenue over the second quarter increased by 5.8% from €910 million in the same period a year ago and reached €963.4 million ($1.3 billion). Excluding currency swings the increase is by 9.6%. However, sales in Japan were down 6.3% on an annual basis, though at constant exchange-rate revenue from the country is up 1.6%.
“Growth in Japan and the United States was a little softer than expected,” Eva Quiroga, luxury goods analyst at UBS in London, commented for Reuters.
Hermes International SCA, which is known for making the famous Kelly bags and its luxury silk scarves, also shared its projection for the operating margin over the first half of the year. As reported by the Financial Times, the company said in its statement: “[Margins] should be slightly lower compared to the first half 2013’s margin, and close to the historical high reached during the full year 2013 (32.4 per cent).” In April 2014 Hermes warned that the weak performance of the yen combined with its investments are expected to affect its profitability over the current fiscal year.
Hermes International SCA was down 2.20% to trade at 261.85 euros per share by 11:57 GMT, marking a one year change of -0.11%. According to the information published on the Financial Times, the 16 analysts offering 12-month price targets for Hermes International SCA have a median target of 243.00, with a high estimate of 300.00 and a low estimate of 190.00. The median estimate represents a -9.24% decrease from the last price of 267.75.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
