* Q1 sales 1.352 bln euros, up 11.2 pct vs est. 8.8 pct
* Q1 sales in leather goods division rise 15 pct
* Cautions against extrapolating Q1 growth to full year
(Adds CEO comment, shares, analyst)
By Dominique Vidalon and Pascale Denis
PARIS, April 27 Hermes said sales
growth accelerated in the first quarter, beating expectations,
as more Asian and American shoppers bought its Constance and
Lindy bags, adding to evidence of a recovery in the luxury goods
The French luxury goods group, also known for its $10,000
Birkin bags and $400 printed silk scarves, joined larger rivals
LVMH and Kering - owner of Gucci and Yves
Saint Laurent - in reporting strong quarterly sales.
Chief Executive Axel Dumas said that while all regions
achieved good growth, Asia did "particularly well" thanks to
stronger demand in mainland China. The U.S. business also
Hermes struck a cautious note over its outlook, saying that
the growth seen at the end of March would not necessarily
continue over the full year.
Hermes reported an 11.2 percent rise in revenue at constant
exchange rates to 1.352 billion euros ($1.47 billion) compared
with 6.6 percent growth in the last quarter of 2016.
This was above analysts' expectations of 8.8 percent growth.
BNP Paribas analyst Luca Solca, who has a "sell" rating
given Hermes' high valuation, said the performance was beyond
expectations but not on the scale of that delivered by Kering
By 0733 GMT, Hermes shares were up 0.69 percent at 435.7
euros. Hermes shares rose 25 percent last year, and are up
nearly 11 percent since the start of 2017, after hitting a
record high of 468.3 euros on April 24.
The first quarter increase was led by a 15 percent jump in
sales at its leather goods division, which makes up half of
group sales, and by a 16 percent rise in Asian sales.
Echoing its peers, Hermes said the improvement was driven by
most regions and by a pickup in demand from Asian customers,
notably Chinese, both locally and abroad.
"In China, there is an acceleration with a growing appetite
for consumption following a government stimulus package launched
in 2016," Dumas told a conference call with journalists.
"Hong Kong and Macau are also back to a positive momentum.
Overall the dynamism of mainland China drives the whole region."
The luxury industry has suffered in the past couple of years
as demand in China slowed and attacks in France deterred some
tourists from travelling to Europe.
Asked about news this week that the family of French
billionaire Bernard Arnault plans to sell its Hermes shares as
part of a move to simplify its business interests, Dumas said:
"The impact will eventually be favourable on the liquidity of
the Hermes shares."
Arnault's family company is offering to pay for the buyout
of minority shareholders in the Dior holding company partly with
shares in Hermes, it which it still has an 8 percent stake.
($1 = 0.9173 euros)
(Editing by Sudip Kar-Gupta, Andrew Callus and Adrian Croft)