A man stands with shopping bags outside an Hermes store at the TaiKoo Hui shopping mall in Guangzhou, China.

Hermès International SA RMS.FR -0.21% is bucking the slowdown in the luxury-goods sector with its top-of-the-heap prices.
The maker of Kelly bags costing thousands of euros said on Thursday that fourth-quarter sales grew 4.6% to €1.09 billion ($1.48 billion) on robust demand in China and among local consumers in Europe, defying trends that have dragged down competitors such as LVMH Moët Hennessy Louis Vuitton SA MC.FR -0.26% . Excluding currency swings, such as the weakened Japanese yen, sales increased 11% in the fourth quarter.
"We had a better fourth quarter than we thought," Hermès's new chief executive, Axel Dumas, said in an interview. "The industry talks of a slowdown in China, but we didn't feel it in the fourth quarter."
A stark deceleration in luxury-goods sales in China has weighed on companies including LVMH and Gucci parent Kering SA KER.FR -0.85% , making investors skeptical that they can maintain the fast growth that has powered the industry in recent years. Those companies say that many sales to Chinese consumers occur when they are traveling—to Hong Kong, Europe or the U.S. Hermès has said that isn't the case with its sales.
Hermès's products are among the most expensive in luxury goods, drawing different consumers than the first-time luxury buyers who flock to Vuitton and Gucci.
In China, Hermès sales increased 19% in the fourth quarter in the local currency, the same rate it registered for the whole year. It opened one store in the country, in Ningbo, and will open a new flagship store in Shanghai this year selling its full-range of goods.
"There is no change in the trend in China," Mr. Dumas said.
Chinese tourists have sustained luxury-goods sales in Europe, making up for local consumers who have stopped spending in the slow-growth economies. But again, Hermès's experience is different. In its home market of France, where sales increased 7.6% in the fourth quarter, "our clientele remains mostly French, especially in December with Christmas shopping," Mr. Dumas said. He added, however, that the average spend was slighter lower than the year before.
In Italy, another country where tourists have picked up the slack from local spenders, Hermès had a solid end to the year. The house moved its Milan flagship store onto the main shopping drag, Via Montenapoleone, from a side street. Sales in the new store "were particularly strong to Italians," Mr. Dumas said. "We weren't totally sure whether the move would affect our sales to Italians."
Because of its better-than-anticipated sales growth at the end of the year, Hermès expects its operating margin to "slightly" top the 32.1% it logged last year—already a record. And Mr. Dumas doesn't forecast any slowdown for this year: He is targeting sales growth of at least 10%, excluding currency effects.

Christina Passariello, WSJ
Photo, Bloomberg News
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