Hermès slows, but less than expected. “We are probably less exposed, given our value strategy. And maybe also thanks to our customers’ loyalty and level of quality”, said to journalists Eric du Halgouet, VP of finance for the brand. Hermès’ sales reached 3.37 billion euro in the third quarter of 2023, up 15.6% at constant rates. A lower percentage compared to the +23% of the 1st quarter and +27.5% of the 2nd quarter. That being said, higher than the forecasted +14% (Visible Alpha consensus). US sales continue to perform.
We are less exposed
“Even considering the uncertain context, our forecasts remain unvaried”, observed du Halgouet, highlighting the strong performances of USA and Asia, including China (source Reuters). Moreover, “the geopolitical evolution can generate a flux of tourists”, which Hermès is yet to see but on which it poses “a lot of attention” (source Les Echos-Investir). In the first 9 months of the year, Hermès’ revenue reached 10.06 billion euro, +16.9% at current and +21.7% at constant rates.
Further price increments in 2024
Sales in the Americas grew 20% during the June-September period, even with a global slowdown. The USA is the marketplace where priced increased the least: +3% compared to a global average of 7%, with a +10% peak in Japan due to currency fluctuations. When asked about pricing strategies for 2024, du Halgouet indicated it’s “still early” to quantify them. But he added they will “likely move at a similar rate as 2023”.
New production plants
In the note to the financial statement, the French luxury brand highlighted the efforts increase its production capacity. 4 new leather goods sites will be built in the next 4 years. In order: Riom (Puy-de-Dôme) in 2024, L’Isled Espagnac (Charente) in 2025, Loupes (Gironda) in 2026 and Charleville-Mézières (Ardenne) by 2027.
