French luxury goods brand Hermes made a record net profit last year of €1.1 billion (US$1.19 billion), doing “better than we expected”, according to CEO Axel Dumas.
“We are entering this year on a solid base, but remain cautious in view of an uncertain environment.”
Known for its $10,000 Birkin bags and $400 printed silk scarves, Hermes says its net profits rose by 13 per cent while its operating margin hit an historic high of 32.6 per cent of sales against 31.8 per cent in 2015.
Its sales growth mainly stemmed from the strong performance of its leather goods, which accounts for half of group sales. Other divisions also performed well with the exception of its watches unit.
Hermes joined other luxury companies such as Kering and LVMH in reporting an improvement in the luxury goods sector, which has been hit by slowing demand in China as well as terrorist attacks in France deterring tourism in Europe.