Feb 5, 2010
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Hermes ups its 2009 profit forecast

Feb 5, 2010

PARIS (Reuters) - French luxury group Hermes (HRMS.PA) on Friday 5 February raised its own profit expectations for 2009 after posting forecast-beating full-year sales on the back of strong Christmas trading.

The world's second biggest luxury goods maker after LVMH LVHM.PA expects operating profit to show a slight increase against 2008 while previously it expected a small drop.

Net profit should be about the same as it was last year, it added.

The maker of silk scarves and 20,000-euro leather bags posted a 4.1 percent rise in full-year sales at constant currencies to 1.91 billion euros (1.66 billion pounds).

In comparison, analysts estimated global luxury sales last year to have dropped 8 percent.

The French group originally expected relatively flat sales for the year, stripping out the impact of currencies.

The figures are likely to cement the view that Hermes is weathering the downturn much better than its peers due in part to the strength of its brand, which consumer regard as a safer investment than younger fashion brands.

Hermes's resilient numbers come after LVMH on Thursday 4 February posted a 1 percent rise in like-for-like fourth quarter sales and a smaller drop in 2009 operating profit, citing signs of improvement in watches, spirits and champagne.

(Reporting by Astrid Wendlandt; Editing by Hans Peters)

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