Hermes bags strong sales on Chinese demand

Luxury goods maker Hermes reported rising sales for the third quarter Thursday, as strength in China helped offset weakness at home in France where demand was still hurt by a string of deadly attacks.

Turnover rose by 9.9 percent in the third quarter over the same period last year to 1.25 billion euros ($1.4 billion), ahead of analysts' forecasts compiled by Factset of 1.22 billion euros.

"We are seeing a good acceleration of sales growth in the third quarter," CEO Axel Dumas told a conference call. "This growth is particularly healthy because it is based on organic growth," he said.

Organic growth is self-generated growth, as opposed to growth by acquisition.

Ads

Dumas said sales in continental China improved, remained steady in the United States and were strong in Europe, although France continued to be impacted by lower tourism numbers following attacks, notably in Paris last November and in Nice in July.

Leather goods, including the company's signature handbags, and saddle-making generated a 16-percent increase in sales in the quarter.

But clothes, accessories, silk goods and textiles all saw declines because of French weakness, but also slower sales for the segments in China and the US, the company said.