Mar 20, 2014
Hermès hikes dividend after new record-high profit margin
Mar 20, 2014
PARIS, France - France's Hermès hiked its dividend on Thursday after the maker of Birkin handbags and printed silk scarves posted a new rise in profits and record-high operating margin last year.
Hermès said in a statement that 2013 operating profit rose 8.9 percent to 1.218 billion euros ($1.69 billion), while its operating margin reached a new all-time high of 32.4 percent of sales, compared to 32.1 percent in 2012.
Last month, Hermès posted 2013 sales of 3.75 billion euros, up 13 percent at constant exchange rates, outperforming rivals such as LVMH, whose organic fashion and leather sales rose 5 percent during the same period.
Full-year sales rose 16 percent in Asian markets excluding Japan, 14 percent in the Americas and 12 percent in Europe.
Net profit rose 6.8 percent to 790 million euros and the company said it planned to pay a dividend of 2.70 euros a share for 2013, from 2.50 euros for 2012.
Hermès is known for its iconic Kelly and Birkin leather handbags, which cost between 7,000 and 30,000 euros and can take months to obtain in certain colours or types of leather, creating scarcity and a reputation for exclusivity.
Shares in Hermès closed at 237.5 euros on Wednesday and are down 9.9 percent so far this year.
Hermès commands one of the highest ratings among European luxury stocks due to the brand's resilience to swings in demand and expectations that LVMH, its largest external shareholder with a 23.1 percent stake, could make a takeover bid.
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