Our luxury is not in crisis: Hermès’ word. The fashion house reported a quarter in line with analysts’ expectations, with double-digit growth that its rivals such as LVMH and Kering can only dream of. Revenue from the “Maroquinerie-Sellerie” division, especially, grew 14% at constant exchange rates during the July-September 2024 period.
“Our luxury is not in crisis”
Hermès, with its products targeting the ultra-rich, confirms itself as a reliable brand. Because it stands for luxury (and not fashion) and perfectly embodies the strategy of exclusivity. The French company generated 3.7 billion euro in sales through the third quarter 2024, up 11.3% at constant exchange rates, in line with Jefferies analysts’ estimate (source: Reuters). According to FactSet, analysts were forecasting average revenue of 3.67 billion euro, reports Les Echos. In the quarter being considered, only the watch-related business suffered a heavy setback, -18.2% at constant exchange rates. In the first nine months, the group’s sales rose 14% at constant exchange rates and 11% at current exchange rates to 11.2 billion euro. Citi has estimated that Hermès could reach a turnover of 20 billion by 2027.
Not even in China
Even in China, in the midst of a consumption slowdown, Hermès managed to generate a 1% growth at constant exchange rates. “In China there was no break in the trends, but we are still experiencing the drop in traffic that started after the Chinese New Year”, said Eric du Halgouet, the group’s chief financial officer. “But we have not seen a further decline. Du Halgouet explained how the decrease in store traffic has been offset by the increase in the average receipt amount.
In the press release Hermès “confirms an ambitious revenue growth target at constant rates” in the medium term, “despite economic, geopolitical and monetary uncertainties around the world”. Bernstein analyst Luca Solca also crowns the transalpine fashion house: “We consider Hermès the best current opportunity to protect the portfolio (of equity investments) against a difficult phase (second half of 2024), characterized by a global cyclical slowdown exacerbated by structural problems in China”.
Photo from hermes.com
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