By Astrid Wendlandt
PARIS, Sept 14 French luxury goods maker Hermes
on Wednesday said it would no longer provide an annual
sales growth forecast starting next year due to the increasingly
uncertain trading environment.
"In light of the current economic and currency uncertainty,
we no longer wish to provide a written guidance," Chief
Executive Axel Dumas told journalists on a conference call,
adding Hermes continued to aim to outperform the market.
Hermes, which was the only major European luxury brand to
provide a quantified sales growth outlook, said it was
maintaining its guidance for 2016 as it reported a 13 percent
rise in net profit to 545 million euros ($611.60 million).
"Hermes is trading on a price-to-earnings ratio of 33.7
times next year's earnings, virtually double that of LVMH. This
can only be sustained if Hermes can continue to produce
materially faster growth than the sector," said Luca Solca,
luxury goods analyst at Exane BNP Paribas.
"Abandoning the 8 percent guidance is a first sign that it
probably can't and that it's growth will normalise."
When Hermès published its first-half sales in July, it said
full-year like-for-like sales growth could be below its
medium-term revenue growth target of 8 percent, which it lowered
from 10 percent two years ago.
Dumas said Hermes' trading at its shops in Nice, Cannes and
Paris had suffered from the terrorist attack in Nice on July 14
and had still not recovered since.
Hermes' first-half operating margin reached a record high
33.9 percent, up from 32.5 percent last year, which it said was
boosted by favourable foreign exchange hedging contracts.
For the full year, Hermes kept its target of operating
margin slightly higher than 2015's 31.8 percent.
($1 = 0.8911 euros)
(Reporting by Astrid Wendlandt; editing by Matthias Blamont and