Mixed Results For Hermes And Tiffany & Co. – 31/8/09

Recent news has continued to slightly confuse our take on the luxury market and their respective results as we hear them, although we are mindful we are reviewing Tiffany & Co.'s quarter and Hermes first half year. How we seem to have moved past the dire financial announcements of six months ago and are now moving towards more positive sentiments and cautious optimism.

At the moment, we have Tiffany & Co. where "Revenue shrank 16 percent to $612.5 million in the three months ended July 31, beating the $600.7 million average analysts’ estimate in a Bloomberg survey. Tiffany raised its annual profit forecast". According to a Bloomberg article, cost cutting is being sighted as the main reason for the better than predicted performance. Analysts are now predicting sales will decline 10 percent versus 11 percent previously. One point is very important at this end of town…

Meanwhile, on the other side of the coin we have Hermes, who announced a 7 percent drop in profits for their first half year results. This was a worse than expected figure and they have "blamed the drop on currency fluctuations and a lower rate of return on financial investments," according to a New York Times article. Despite this setback, manufacturing of their covetable silk scarves and Birkin bags will still continue with gusto.

Article by: Melinda O'Rourke