Hermès sidesteps the crisis in the luxury sector and sees its sales rise by 11%

Despite a widespread crisis in the luxury sector affecting even the most prestigious brands, Hermès stands out as an exception. In the third quarter, the company recorded a 11.3% sales increase at constant exchange rates, reaching €3.7 billion. Results that few brands can boast of, with Hermès far ahead of the Kering group, which saw its sales drop by 16%, and luxury giant LVMH, whose revenue fell by 4.4% during the same period. Unlike its competitors, Hermès continues to shine thanks to the loyalty of its clientele, supported by its timeless and classic pieces. These results even exceeded analysts' expectations, who had predicted a 10.5% growth. "We see Hermès as the best current opportunity to safeguard a portfolio in a challenging fourth quarter, marked by a global cyclical slowdown and structural problems in China," said Luca Solca, an analyst at Bernstein.

However, China, where the luxury sector is facing a significant spending slowdown due to weak economic and real estate prospects, has not spared Hermès. Since the end of the Chinese New Year celebrations, the brand has observed a decline in traffic in Greater China. Nevertheless, Asia (excluding Japan) posted a 7% growth, supported by strong sales in South Korea, Singapore, Thailand, and Australia. Hermès continues to bet on the Chinese market, recently reopening its freshly renovated store in Shenzhen. By the end of 2024, all geographic areas were experiencing growth, with a notable 13% increase in the Americas and 18% in Europe (excluding France), where the summer tourist flow boosted sales. In France, sales increased by 14%, despite a slight drop in foot traffic in Parisian stores due to the Olympic Games.

Regarding product categories, only watches saw a 6% decline year-over-year. On the other hand, leather goods increased by 17%, driven by new handbag models and increased production capacity with the opening of a new factory in Riom in September. Ready-to-wear continued its momentum with a 15% rise in sales, and silk scarves saw a 2% sales increase during the quarter. Since entering the beauty sector in 2020, Hermès has continued to perform well, with a 7% growth supported by new offerings such as an eyeliner, a lip pencil, and a new perfume. The jewelry division also recorded a strong 17% increase in the third quarter. Over the first nine months of the year, revenue grew by 14% at constant exchange rates, reaching €11.2 billion. "In the medium term, despite global economic, geopolitical, and monetary uncertainties, the group maintains its ambitious goal of constant currency revenue growth," Hermès concluded.