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Chief Executive Axel Dumas nevertheless struck a cautious note
for the year given underlying global political and economic
uncertainties.
"We did better than we expected in 2016 and we are entering 2017
on a solid base but remain cautious in view of an uncertain
environment," Dumas told a conference call.
Hermes, known for its $10,000 Birkin bags and $400 printed silk
scarves, said net profits had risen by 13 percent rise to a
record 1.1 billion euros ($1.19 billion).
Its operating margin hit an historic high of 32.6 percent of
sales against 31.8 percent in 2015, while the company also
increased its dividend by 12 percent.
Hermes added it was keeping an "ambitious" medium-term goal for
revenue growth at constant exchange rates.
The company's sales growth had mainly stemmed from a strong
performance at its leather goods arm, which makes 50 percent of
group sales, while other divisions also performed well although
its watches unit lagged.
Hermes joined other luxury companies such as LVMH <LVMH.PA> and
Kering <PRTP.PA> in reporting an improvement in the sector,
which has suffered from slowing demand in China, while Islamist
militant attacks in France have also deterred tourists from
Europe.
Several analysts expect the luxury goods sector to benefit in
2017 from improved consumer sentiment in China, tax cuts under
the new U.S. administration and robust Middle Eastern demand due
to firmer oil prices.
(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)
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