Hermes celebrates record profit with staff bonuses

French luxury giant Hermes posted on Friday record annual sales and net profit, with plans to reward all employees worldwide with a bonus following strong growth in every region last year.

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The group reported a better-than-expected profit of 4.3 billion euros ($4.6 billion), up 28 percent from 2022, on sales that surged 16 percent at current exchange rates to 13.4 billion euros.

“In 2023, Hermes has once again cultivated its singularity and achieved an outstanding performance in all metiers (businesses) and across all regions against a high base,” executive chairman Axel Dumas said in an earning statement.

The group said its 22,000 employees worldwide would get a 4,000-euro bonus early this year as part of “its policy of sharing the fruits of growth with all those who contribute to it on a daily basis.”

It will also propose an increase in dividends for shareholders.

Shares in Hermes rose by more than four percent to 2,168 euros in late morning deals at the Paris stock exchange, propelling the group above cosmetics giant L’Oreal in terms of market capitalisation.

L’Oreal’s stock price fell more than seven percent to 420 euros after posting lower-than-expected results for the fourth quarter.

Shares in LVMH, the world’s largest luxury goods group, were down 0.3 percent to 802 euros, though it also reported record annual earnings last month.

Gucci owner Kering was up 0.7 percent to 412 euros, a day after reporting slumping profits.

In its outlook for 2024, the Hermes said: “In the medium-term, despite the economic, geopolitical, and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates.”

It said it would propose a dividend increase to 15 euros per share, up from 13 euros in 2022, at its next general meeting in April. “In addition, an exceptional dividend of 10 euros per share will be proposed to the general meeting,” it said.

“It’s a show of confidence for the coming year,” Dumas said.