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Hermès made how much last year?

BY editors | Mar 24, 2017 | News

Jane Birkin (L), the inspiration behind the Birkin bag, pictured here with her husband Serge Gainsbourg. ©Farabola/Leemage

More than one billion euros. Profit.

The luxury fashion group attributed the record performance to a 14 percent jump in its leather goods and saddlery unit, which includes its famous bags including iconic models such as the Birkin.

This helped push Hermès’ annual profits last year above one billion euros for the first time ever.

The French luxury goods maker said its 2016 net profit hit 1.1 billion euros (USD1.2 billion), a 13 percent jump from the previous year.

Sales in February, before the company’s financial year-end, hit a record 5.2 billion euros.

"New records were attained, which proves the solid performance of Hermes this past year," said Hermès chief executive Axel Dumas.

A rare Hermes 25 cm (9.8 inches) matte white Himalayan Nilo crocodile Brikin bag with palladium hardware (L), an Hermes limited edition Noisette Gulliver leather Quelle Idole Kelly doll bag (C) and an Hermes Extraordinary Collection 25 cm (9.8 inches) shiny black Nilo crocodile Birkin bag with 18 karat white gold hardware and diamonds (R), are displayed at Heritage Auctions April 7, 2014 in New York. AFP PHOTO / STAN HONDA

How did Hermès do it?

Recent investment in new workshops helped Hermès meet the growing demand for its leather goods.

"Development was supported by the sustained pace of deliveries and production, gaining from the capacities of the three new sites" in France, the company said in its earnings statement.

What’s hot and what’s not?

Perfume sales also grew, climbing by nine percent. Apparel sales were flat and watch sales slowed by three percent.

Is the whole world falling for Hermès?

Sales rose in all geographical regions.

How does Hermès now see the state of the world?

While Hermès "entered 2017 on a solid footing" the firm is "cautious faced with the global uncertainties that surround us in this very uncertain world," said Dumas.

And here’s how it intends to deal with it

Nevertheless, Hermès targets an increase in sales at constant exchange rates. It signalled it would continue to follow its current strategy of keeping control over the creative process and know-how, as well as its communication strategy.

Grace Kelly. The inspiration behind the Hermès Kelly bag. (Farabola/Leemage)

Buy, hold, sell? Or, make an offer for all the Birkins in Malaysia. Tremendous upside.

Hermès announced a dividend payment of 3.75 euros per share, up from 3.35 euros last year. Oh, and the Kelly bag...

(Note for investment analyst types: the profit figure is slightly less than the consensus forecast of analysts surveyed by the financial data company Factset but let’s not be churlish. The operating margin rose to 32.6 percent of sales, another record, but much of the 0.8 point gain was due to the favourable impact of foreign currency hedges.)