Hermès - Great 2017 Results and Strategy (2018 and beyond)

Hermès - Great 2017 Results and Strategy (2018 and beyond)

by Pininvest Analysis

Luxury at the crossroads on pininvest.com

  • 22 constituents
  • 93.6% 1y performance
  • 23.8% volatility
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Hermès on a roll ?

According to the recently published results for 2017 "the Group’s consolidated revenue amounted to €5,549 million, up +9% at constant exchange rates and +7% at current exchange rates. Operating income, up 13%, amounted to €1,922 million (34.6% of sales) and net profit increased 11% to €1,221 million."

Qualified as 'outstanding' by management, the yearly results have been followed in April '18 by the announcement of a further extension of manufacturing facilities in France. After 400 new entries in the French workforce in 2017 mainly in production units and sales teams, the Group will open in 2018 a new manufacture in region Franch Comté (France) to employ 260 leathercraftsmen, potentially increasing production capacities by 8%

The new facility comes on the heels of another production site in the same region, created in 2016, and seems to point towards a more aggressive sales presence on the international markets 

As observed in our previous note, Hermès has maintained a unique aura by carefully restraining the avaiability of much sought-after handbags and silk scarves

A shift in strategy is very probably related to the expectations of the millenial clientele 'coming of age' ... to become customers