PARIS (Reuters) – Luxury group Hermès announced on Friday that it would increase its prices this year after reporting a larger than expected increase in sales in the fourth quarter of 2023.

The group’s sales stood at 3.36 billion euros in the fourth quarter, up 17.5% at constant exchange rates, exceeding analysts’ expectations of 14%, according to a Visible Alpha consensus.

The company indicates in a press release that it was driven by strong growth in all regions, particularly in Japan, despite a high basis of comparison in Asia and America.

It therefore plans to increase its prices globally by 8% to 9% this year, the group’s manager, Axel Dumas, told journalists.

On the Paris Stock Exchange, Hermès shares rose 3.93% to 2,156.50 euros at 08:03 GMT, at the top of the CAC 40 index which fell at the same time by 0.16%.

These results are welcomed by analysts, notably those at JP Morgan who note “strong brand momentum in all product categories and in all regions, a well-invested operating base which benefits from continued leverage and strong returns on investment for shareholders.”

Hermès is “still the fastest growing luxury brand,” Citi said in a note.

The brand is known for outperforming its competitors when economic conditions deteriorate, thanks to its classic designs and careful production and inventory management, which helps maintain the brand’s aura of exclusivity.

For Bernstein analysts, “it is important to note that leather goods are in the lead and showing double-digit growth over the quarter, defying the usual end-of-year lull.”

Handbags such as the coveted Birkin model, worth more than $10,000, are only accessible to the wealthiest buyers, generally more sheltered from economic vagaries.

Hermès will also pay a bonus of 4,000 euros to each of its 22,000 employees worldwide.

(Report by Mimosa Spencer, by Gaëlle Sheehan, with the contribution of Diana Mandiá; edited by Kate Entringer)

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