French luxury goods maker Hermes International reported a 3.1 per cent decline in 2004 net profit.
The maker of some of the world's most exclusive luxury products, from hand-stitched saddles to haute couture, gave no forecasts for 2005 but proposed raising its dividend to €2 per share from €1.70 a year earlier.
Hermes said in an announcement in Les Echosnewspaper that net profit edged down to €210.1 million from €216.8 million in 2003, after currency effects turned what would have been a 15.6 per cent rise into a 3.1 per cent fall.
The figure lagged estimates from four analysts, who had forecast a rise to roughly €221 million. However operating profit inched up 1.2 per cent to €336.7 million, in line with analysts' estimates of €333 to €337 million after the company raised its forecast to flat.
In 2003, operating profit was 332.8 million. Foreign exchange effects - chiefly the euro's strength against the dollar - weighed heavily.
Excluding them, operating profit would have risen 20.2 per cent, the company said.
European luxury goods firms, which export to the dollar and dollar-linked economies of Asia and the Americas, have all suffered as euro strength against the US currency eats into corporate earnings.
Some, like giant LVMH, are seeking to compensate with currency hedging and price rises in key markets abroad.