The 6 percent increase in high-margin leather goods sales was a disappointment to analysts. Maury blamed insufficient production capacity to meet high demand for Hermès' coveted handbags.
As reported, sales in the period rose 4.6 percent to 629.1 million euros, or $809.2 million. At constant exchange, the increase stood at 6.2 percent.
In the first half, Hermès allocated part of 58 million euros, or $74.6 million, in capital expenditures to increase leather goods production capacity. The money also went to acquire the building that houses its boutique on Avenue George V here and to expand the retail network.
Of eight new Hermès locations this year, six are slated to open in the second half, including a second outlet in Beijing and its first in Athens, Maury said. Thanks partly to the retail expansion, Hermès said it expects sales growth to accelerate in the run-up to the holiday selling season.
Looking ahead to 2006, key openings include an Hermès House in Seoul and an expansion of Dumas' prized Tokyo flagship.