While many slow down, Hermès accelerates and shows off its solidity, as the brand grew at a double-digit rate during the April-June period and closed the first half of the year with 7.5 billion euro in sales (+15% at constant exchange rates and +12% at current exchange rates). Margins proved in line with those of 2023, and the company can count on 10 billion in cash to spend. During the same period, Hermès hired 1,205 people. The Maroquinerie-Sellerie division grew 19.1% at constant exchange rates, showing that Hermès, in short, is the one lifting the luxury segment (or at least its suppliers) after the disappointing quarterly results of LVMH and (even more) Kering.
Hermès accelerates in the first half of the year
Sales for the April-June 2024 period reached 3.7 billion euro (+13.3% at constant exchange rates). Leather goods, in particular, grew 17.9%. This result allows Hermès to close the half-year, we said, at 7.5 billion euro in revenue, with profit from recurring operations amounting to 3.1 billion euros, or 42% of revenue, up 7% from the first half of 2023. The Visible Alpha consensus cited by Reuters estimated 3.2 billion. The “Maroquinerie-Sellerie” division outperformed all other divisions in the considered 6 months. A remarkable performance (+19.1% at constant exchange rates) supported by increased production capacity and particularly robust demand. Investments in production continue “with the opening of the Riom leather goods factory (Puy-de-Dôme) in September 2024″, writes the brand in the note accompanying the financial results.
More headcounts
As production capacity grows, so does the workforce: Hermès created 1,205 jobs between January and June 2024, including nearly 600 in France. At the end of June 2024, the group counted 23,242 employees, including 14,320 in the Hexagon, and in February the company distributed a bonus of 4,000 euros to all its employees worldwide for 2023. “The strength of Hermès’ model is reflected in the solidity of the first-half results, achieved in a more complex economic and geopolitical context”, commented Hermès’ CEO Axel Dumas.
He then expressed confidence for the future, as the company did not experience “major disruptions in trends”. Yet, he said the brand is experiencing slightly less traffic from aspirational customers. “The group will continue to invest and pursue its vertical integration projects and create jobs”, Dumas concluded. In the medium term, despite the world’s economic, geopolitical and monetary uncertainties, Hermès confirmed its sales’ growth target.
Read also:
