“Hermes International SCA (RMS), the French maker of Kelly handbags, reported the slowest revenue growth in more than three years because of diminishing gains in the leather-goods unit and a drop in watch sales.
Revenue in the first quarter of 2013 climbed 10 percent to 856.8 million euros ($1.1 billion), Paris-based Hermes said today in a statement. Analysts predicted 854 million euros, according to the average of five estimates compiled by Bloomberg. Excluding currency swings, sales advanced 13 percent, the least since the last three months of 2009.
Weaker performances in leather-goods and watches took the shine off a stronger showing from the clothing unit. Leather- goods sales, Hermes’s biggest source of revenue, gained 7.3 percent excluding currency swings, about half the rate of the year-earlier quarter and the slowest since the third quarter of 2007. The slowdown may have been caused by reduced output, said Rodolphe Ozun, an analyst at Bank of America Merrill Lynch.
“The slowdown in leather goods highlights in our view the normalization of production in this segment and should continue in the coming quarters,” Ozun wrote in a report.
All product categories posted revenue growth except tableware and watches, Hermes said. Sales of timepieces declined 5.3 percent, excluding currency shifts, as the Chinese market slowed at the start of the year, Hermes said.