PARIS – Hèrmes International continues its streak as the leader of the luxury pack, with sales up 18 percent at constant exchange in the fourth quarter to 4 billion euros.
That bucked the trend among its rivals, including LVMH Moët Hennessy Louis Vuitton, which reported organic revenues up just one percent in the fourth quarter, and Kering, which saw sales erode 12 percent in the fourth quarter.
Hèrmes handily beat analysts’ projections, which had seen Hermès hit around 11 percent growth at constant currency in the fourth quarter, and exceed its third-quarter sales of 3.7 billion euros.
Shares jumped 2.1 percent on the Paris bourse as investors applauded the numbers. Analysts reacted positively to the news.
Bernstein analyst Luca Solca called the brand part of an “elite club smashing Q4 forecasts” in a trading note. The numbers are “proving the resilience and popularity of the brand among the affluent customer segment,” he said.
“With continued brand heat in both handbags and non-leather categories (in particular RTW and jewelry), supply/demand imbalances in leather goods…Hermes is well-positioned in 2025,” said Citi analyst Thomas Chauvet.
Hermès chief executive officer Axel Dumas highlighted the continued solid performance of the company, despite the headwinds roiling its rivals.
“In a more uncertain economic and geopolitical context, the solid performance of the results attests to the strength of the Hermès model and the agility of the house’s teams,” Dumas said in a statement. “The house is staying the course, attached more than ever to its fundamental values of quality, creativity and savoir-faire.”
To thank its teams, Hermès will be issuing a 4,500 euro bonus to all its employees, the company said. It will continue to add to those ranks, with plans to open three new workshops in France over the next two years.
Sales in the Americas were up 22.3 percent in the fourth quarter, spurred on by openings of new stores in Atlanta and Princeton, N.J., earlier in the year.
Europe also remained strong in the fourth quarter, with sales in the territory excluding France up 20.7 percent. Sales in its home country were up 11.8 percent.
Sales in the Middle East region were up 123.2 percent in the three months to Dec. 31, after Hermès became a majority shareholder of its retail network in UAE alongside distribution partner Al Mana earlier in the year.
Growth in Asia excluding Japan was up 7 percent in the fourth quarter, despite a downturn in China hitting other luxury brands. Hermès reopened its expanded store in Shenyang’s MixC mall in December, following openings in Shenzhen and Beijing earlier in the year. A new store in Singapore also boosted those sales.
Japan was once again strong on local clients with two new stores there, and hit 22.4 percent growth in the quarter.
Sales in the leather goods category, including its Birkin and Kelly bags, were up 21.5 percent, while its ready-to-wear and accessories, including shoes, were up 17 percent.
Famous for its scarves, the brand saw slowing sales in the category, though they were still up by 7 percent in the quarter.
Its growing beauty category were boosted by the release of a new fragrance in the quarter, jumping 17 percent.
Jewelry and home are grouped together, and those categories were up a combined 17 percent in the quarter.
Watch sales were sluggish, up just 2 percent, amid a worldwide slowdown in the category.
For the full year, sales were up 15 percent at constant exchange rates to 15.2 billion, with net profit hitting 4.6 billion euros.
The company retains its buoyant outlook in the near term, despite increased political and economic uncertainty leaving consumers more cautious, and will continue to with its strategy of store openings in smaller cities throughout the year.
“The group has moved into 2025 with confidence, thanks to the highly integrated artisanal model, the balanced distribution network, the creativity of collections and the loyalty of clients,” it said in a statement. “Hermès is pursuing its long-term development strategy based on creativity, maintaining control over know-how and singular communication.”
