Despite a general slowdown in the luxury market, French luxury powerhouse Hermès International registered a 7 per cent increase in sales to €4.13 billion at consistent exchange rates in Q1, FY25.
While these figures slightly missed analysts' predictions of an 8 per cent rise in sales to €4.2 billion, Hermès outperformed its French luxury rivals like LVMH Moët Hennessy Louis Vuitton, which reported a 2 per cent decline in sales. However, this growth rate represents a deceleration from Q4, FY24 where Hermès had registered an 18 per cent rise in sales.
Axel Dumas, Chief Executive Officer, Hermès states, the group achieved a solid growth in sales despite a high comparison basis in the quarter. He attributed this growth to the company's vertically integrated model.
In a research report, Luca Soca, Analyst, Bernstein notes, these results confirm a slower consumer demand environment.
The brand’s sales in the United States grew by 11 per cent while sales in Europe, excluding France, increased by 13 per cent. Sales in the Middle East rose by 14 per cent sales at constant currency, while Japan experienced a substantial 17 per cent jump, driven by local clientele.
Sales in the rest of Asia, however, increased by only 1 per cent due to ongoing softness in the Chinese market.
Boosted by new designs of bags like Medor and Mousequeton, sales of the retailer’s leather goods division increased by 10 per cent at constant currency rates. Sales of ready-to-wear grew by 7 per cent for the quarter.
Silk and textiles, including the brand's iconic scarves, experienced a 5 per cent rise in sales while sales in the fragrance and beauty segments remained flat.
Continuing its expansion strategy, Hermes plans to open three new production facilities in France over the next three years.
Taking currency fluctuations into account, the company’s sales increased by 9 per cent, boosting its revenue by €49 million.
Looking ahead, the company aims to grow revenues at constant exchange rates in the medium-term, despite the economic, geopolitical and monetary uncertainties around the world.It aims to leverage its highly integrated artisanal model, the balanced distribution network, the creativity of collections and the loyalty of clients.
