Hermès and Lululemon steal the show

Friday, 23 March 2012

Hermès International´s operating profit rose 33 per cent to 885.2 million euros ($1.2 billion or Rs 6,224 crores), the French luxury house said yesterday in a statement. This compares to the average of 15 analysts’ estimates compiled by Bloomberg of 857.3 million euros (US$ 1.1 billion or Rs 5,706 crores).

Sales so far this year have been “quite good,” Chief Executive Officer Patrick Thomas said today at a presentation in Paris, declining to provide figures, reported Bloomberg.

The company is aiming for annual revenue growth of 10 per cent, the CEO said. The company’s operating margin widened to 31.2 per cent, the highest since its shares began trading in 1993.

Hermès proposed an exceptional dividend of 5 euros a share and a regular dividend of 2 euros ($2.6 or Rs 134) a share. The shares rose 2.3 per cent to 249.80 euros ($330 or Rs 17,118) in Paris. The stock has advanced 8.4 per cent this year, valuing the company at 26.4 billion euros ($34.8 billion or Rs 1,80,521 crores).

“There is no reason for the share price to remain as high as it is right now,” said to Bloomberg Francois Arpels, managing director at Bryan Garnier in Paris, before the results. “It is a fantastic company, but because the float is so little, there’s starting to be some disinterest from investors just because there’s not much trading on the market.”

Canadian Lululemon Athletica was the other winner of the day. Its stock rose as high as $76.63 (Rs 3,975) presenting solid and higher fourth-quarter profits, with revenues up by 51, reported CBC News. Revenues grew to $371.5 million (Rs 1,924 crores) from $245.4 million (Rs 1,270 crores). Same-store sales, or sales at stores open at least a year, increased 26 per cent.

Net income came in at $73.5 million (Rs 381 crores), or 51 cents (Rs 26) per share, for the three months ended Jan. 29. The resulted compared with earnings of $54.8 million (Rs 284 crores), or 38 cents (Rs 19) per share, a year earlier. That was two cents higher than analysts had expected, according to a poll by Thomson Reuters.

The shares closed up $2.44 (Rs124), or 3.32 per cent, at $75.95 (Rs 3939) on the Toronto Stock Exchange.

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