Hermes Reports Profit, Raises Dividend
Some luxury brands may not be doing well but Hermes is still doing a brisk business in Birkin bags. Its reported profit beat analysts' estimates and the French brand even raised its dividend. The company's net income for 2008 rose less to 290.2 million euros beating an estimate of 287.5 million euros which was the estimate by 12 analysts compiled by Bloomberg News. It will pay a dividend of 1.03 euros a share versus last year's 1 euro.
While most stores have had a rough start to the new year, Hermes found that sales in the company's own stores rose in January and February. The confident CEO Patrick Thomas told Bloomberg that the company won't change its strategy and plans to continue opening new stores.
It's been a challenge to predict which luxury brands will do well. Some such as LVMH, the owner of Louis Vuitton and PPR, the owner of Gucci have both seen the luxury market remain solid but Bulgari saw a huge drop. Hermes has expanded less rapidly than some brands but it has maintained its prestige level.
