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PARIS, France — Hermès International SCA announced a bonus dividend and said 2014 earnings climbed 7 percent as the French maker of Birkin bags sold more high-margin leather goods in the Americas.
Operating profit reached 1.3 billion euros ($1.4 billion), Paris-based Hermès said in a statement Wednesday. Analysts predicted 1.31 billion euros, according to the average of estimates compiled by Bloomberg. It also proposed an exceptional dividend of 5 euros a share, on top of a regular dividend of 2.95 euros a share.
Hermès has weathered slowing luxury growth better than many of its peers as high prices plus limited supply and distribution help reinforce its elitist appeal. Still, the maker of $9,600 saddles last month showed it isn't immune to softening demand in markets such as China as it projected revenue growth of 8 percent this year at constant exchange rates, below its mid-term annual target for a 10 percent increase.
Hermès, which created nearly 700 new jobs last year, "will continue its long-term development strategy based on creativity and maintaining control over its know-how," the company said in a statement.
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The operating margin narrowed to 31.5 percent of revenue, within the company’s forecast range, dragged down by unfavorable currency shifts.
Axel Dumas, a member of the company's founding family, replaced Patrick Thomas as sole CEO last year. Deputy Managing Director Patrick Albaladejo, who helped defend the French luxury-goods maker from a potential takeover by LVMH Moet Hennessy Louis Vuitton SE, stepped down last month.
Revenue, which the company reported in Feb., rose 11 percent at constant exchange to 4.12 billion euros. Hermes said at the time its 2014 operating margin was probably between 31 percent and 32.4 percent.
By: Andrew Roberts; editors: Matthew Boyle, Thomas Mulier and Phil Serafino.
