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Highlights:
- Hermes posted an 11% revenue growth to €3.7 billion in Q3, with strong gains across regions and products.
- Japanese sales surged 23%, European sales (ex-France) rose 18%, and leather goods sales jumped 17%.
- Hermes shares have risen 9% in 2023, outperforming luxury sector peers like LVMH and Kering.
Hermes has reported a robust third-quarter performance, defying the headwinds faced by other luxury goods makers. The French brand, renowned for its handbags and scarves, posted an 11% rise in revenue at current exchange rates, reaching €3.7 billion for the three months ending September. This solid result reaffirms Hermes’ standing as a top performer in the luxury sector, with broad-based growth across its key markets and product divisions.
“All regions are growing, despite a particularly high comparison basis in Europe and Asia-Pacific,” the company stated. Notably, Japanese revenues surged by 23%, while Europe (excluding France) saw an 18% increase, and the Americas posted a 13% rise in sales. The strong geographic performance was complemented by substantial growth in Hermes’ core product lines. Leather goods, a mainstay of the brand, saw a 17% increase in sales, while clothing rose by 15%.
Watches were the only product category to experience a decline, with a 6% drop in sales. However, this was more than offset by the growth in other divisions, particularly leather goods and clothing. The company reiterated its ambitious goal for medium-term revenue growth at constant exchange rates, despite the global economic, geopolitical, and monetary uncertainties.
Hermes' resilience comes in sharp contrast to the struggles faced by some of its competitors. While the company’s shares have risen 9% this year, other luxury brands have seen significant declines. Sector leader LVMH is down 15%, Moncler has fallen 3%, and Gucci-owner Kering has plummeted 40%. Kering recently warned that its operating income for 2024 would almost halve due to weak demand in China, further underscoring the divergent fortunes within the luxury market.
Hermes’ ability to maintain strong demand for its premium products, such as its iconic Birkin bags, which retail for around $10,000, has helped it navigate the challenging global environment. The company’s growth outlook remains optimistic, with its balanced product portfolio and strong market presence providing a buffer against sector-wide pressures.
Following the positive third-quarter results, Hermes’ shares rose by 2.3%, closing at €2,108.
