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Hermès reports strong revenues and profit growth

By Prachi Singh

18 Feb 2022

Business

Image: Courtesy of Hermès

In 2021, the Hermès Group's consolidated revenue reached 8,982 million euros, up 42 percent at constant exchange and 41 percent at current exchange compared to 2020. Over two years, the company said in a release, this increase was 33 percent at constant exchange, in the first as in the second half of the year.

The company added that recurring operating income was up 78 percent and amounted to 3,530 million euros, 39.3 percent of sales. Net profit reached 2,445 million euros, up 77 percent compared to 2020.

Commenting on the trading performance, Axel Dumas, executive chairman of Hermès, said: " I thank above all the passion and quality of our teams’ work, because together we have made 2021 an exceptional year. Abundant creativity, unique know-how and the quality of materials have driven the growth of our sixteen métiers."

Hermès reports sale growth across geographical areas

The company further said that Asia and America recorded the highest growths, compared to 2020 as well as to 2019, and Europe returned to growth compared to 2019. Sales in the group's stores increased by 44 percent at constant exchange rates compared to 2020 and 41 percent over two years. Wholesale sales increased 24 percentl.

Sales in Asia excluding Japan rose 45 percent and 65 percent over two years, driven by the sustained performance in Greater China, Australia and Singapore. The Shanghai Plaza 66, Suzhou and Ningbo stores reopened after renovation and extension, after the Beijing China World store in spring, and new stores were inaugurated in Macao and Shenzhen. In Australia, the Brisbane store also reopened after being extended.

Revenues in Japan increased 25 percent and 20 percent over two years. A new store opened in February on Omotesando Avenue and the Shinjuku Isetan store in Tokyo was renovated following extension work in November.

Sales in America rose 57 percent and 24 percent over two years. Two new stores opened, in Troy near Detroit in June and in Aventura Mall near Miami in October. Europe excluding France registered a 37 percent increase and 10 percent over two years. Several Hermès stores were renovated and extended, Zurich in May, Milan in July, and Istanbul in October, and the Luxembourg store moved to a new address in November.

France recorded a 35 percent increase and 3 percent decrease over two years. The stores in Lyon and Rue de Sèvres in Paris reopened in February and March after being renovated and extended.

Hermès business lines post sales growth

At the end of December 2021, all the business lines confirmed their growth, with an increase in ready-to-wear and accessories, watches and other Hermès business lines including jewellery and homeware.

In the leather goods and saddlery division, sales rose 29 percent and 23 percent over two years. The increase in production capacities continued, with the opening of the Louviers site (Eure) in 2022, the Sormonne site (Ardennes) in 2023 and a new one in Riom (Puy-de-Dôme) scheduled for 2024.

The ready-to-wear and accessories business line posted 59 percent growth and 44 percent over two years, while the silk and textiles business line grew 49 percent and 15 percent over two years. Perfumes and beauty recorded 47 percent increase and 19 percent over two years, and the sales of watches business line jumped 73 percent and 77 percent over two years. Other Hermès business lines registered 57 percent increase and 95 percent over two years.

Hermès said that at the general meeting to be held on April 20, 2022, a dividend proposal of 8 euros per share will be made. The 2.5 euros interim dividend that will be paid on February 23, 2022, will be deducted from the dividend approved by the general meeting.

HERMES