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Hermes celebrates record profit with US$4,300 bonuses for 22,000 employees

Hermes celebrates record profit with US,300 bonuses for 22,000 employees


PARIS: French luxury giant Hermes posted on Friday (Feb 9) record annual sales and net profit, with plans to reward all employees worldwide with a bonus following strong growth in every region last year.

The group reported a better-than-expected profit of €4.3 billion (US$4.6 billion), up 28 per cent from 2022, on sales that surged 16 per cent at current exchange rates to €13.4 billion.

“In 2023, Hermes has once again cultivated its singularity and achieved an outstanding performance in all metiers (businesses) and across all regions against a high base,” executive chairman Axel Dumas said in an earning statement.

The group said its 22,000 employees worldwide would get a €4,000 (US$4,300) bonus early this year as part of “its policy of sharing the fruits of growth with all those who contribute to it on a daily basis”.

It will also propose an increase in dividends for shareholders.

Shares in Hermes rose by more than four per cent to €2,618 in late morning deals at the Paris stock exchange, propelling the group above cosmetics giant L’Oreal in terms of market capitalisation.

L’Oreal’s stock price fell more than 7 per cent to €420 after posting lower-than-expected results for the fourth quarter.

Shares in LVMH, the world’s largest luxury goods group, were down 0.3 per cent to €802, though it also reported record annual earnings last month.

Gucci owner Kering was up 0.7 per cent to €412, a day after reporting slumping profits.

“SHOW OF CONFIDENCE”

Hermes said its sales climbed 14.5 per cent in Japan and 12.9 per cent in the rest of the Asia-Pacific region last year, with the group opening its 33rd store in China, a major market for luxury brands.

Japan and Asia-Pacific together were the biggest market for Hermes, with total sales of €7.5 billion.

Sales rose 19 per cent to €3 billion in Europe and 17.1 per cent to €2.5 billion in the Americas.

“Hermes is yet another company to confirm reviving momentum of the American consumers, on the back of resurgent confidence and lower inflation,” said Luca Solca, an analyst at Bernstein.

In its outlook for 2024, the company said: “In the medium-term, despite the economic, geopolitical, and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates.”

It said it would propose a dividend increase to €15 per share, up from €13 in 2022, at its next general meeting in April.

“In addition, an exceptional dividend of €10 per share will be proposed to the general meeting,” it said.

“It’s a show of confidence for the coming year,” Dumas said.



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