Business

Luxury brands Hermes and Burberry beat expectations

Hermes bag Image copyright Getty Images
Image caption Hermes has seen strong growth in Japan and Europe

Luxury brands Hermes and Burberry have issued financial results that have beaten analysts' expectations.

The figures come at a challenging time for luxury brands in the key Asia-Pacific region, including China.

Third-quarter sales at Hermes rose by 7.9% on a like-for-like basis, ahead of forecasts, helped by demand for leather goods and ready-to-wear fashion.

Meanwhile, UK luxury brand Burberry reported a better-than-expected 3% rise in first-half underlying profit.

The maker of trench coats and cashmere scarves said it made an pre-tax profit of £153m ($233m) in the six months to 30 September.

It also said its comparable store sales improved in its third quarter compared with the second.

Hong Kong and China

Meanwhile, Hermes stuck to its target of increasing annual sales by 8% at constant exchange rates.

It said that in the quarter Japan had delivered 16.6% like-for-like growth, and Europe 14.8%.

But Asia-Pacific growth, excluding Japan, dwindled to 1.5% amid "a difficult context in Hong Kong, Macao and to a lesser extent in continental China".

In October, Burberry had also warned of an increasingly challenging environment for luxury goods in China and Hong Kong.

And last month, LVMH, the world's biggest luxury group, said the summer stock market collapse in China had hit sales, particularly at its flagship Louis Vuitton brand.

Cosmetics giant L'Oreal has also warned that demand for its luxury products has suffered a slowdown in Hong Kong and at airports.

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