Hermes posts 7 percent rise in 2014 profit, margin slips

PARIS (Reuters) - French luxury goods maker Hermes posted a 7 percent rise in full-year operating income on Wednesday and announced a dividend hike, as well as a one-time additional payment to investors. Operating profit totaled 1.3 billion euros (942 million pounds), Hermes said in a statement. Its operating margin slipped to 31.5 percent of sales from 32.4 percent a year earlier, because of hedging effects related to the yen. Hermes said it would pay a dividend of 2.95 euros a share, up from 2.70 euros a year ago, as well as an exceptional dividend of 5 euros a share. It also reiterated its target for sales to grow around 8 percent this year at constant exchange rates. The group lowered its annual sales growth target from its traditional level of 10 percent when it announced quarterly sales last month, to reflect its bigger size and an overall industry downturn combined with potential hits from currency swings. Hermes said then that its operating margin for 2014 would be "in the region of 31 percent". Hermes is now bigger than rival Gucci in terms of sales after annual revenue went beyond the 4 billion euro mark for the first time in 2014. (Reporting by James Regan, Pascale Denis and Astrid Wendlandt; Editing by Blaise Robinson and David Holmes)