Hermès Sales Up 16 Percent in Q3 Despite Global Luxury Slowdown – WWD

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PARIS – Hermès trotted along with sales up 16 percent at constant exchange in the third quarter, reflecting the overall global slowdown of luxury growth and the end of the post-pandemic boom.

“The solid performance in the third quarter reflects the desirability of our collections all over the world, with a sustained momentum in Asia and in the Americas. More than ever, in an uncertain global environment, we are reinforcing our investments and our teams to support growth,” said Hermès executive chairman Axel Dumas.

While this quarter was a marked drop from the company’s second quarter sales growth of 28 percent, it was still ahead of analysts’ predictions. Barclay’s had expected growth to come in at 13 percent for the three months.

“Hermès remains one of our preferred names in the luxury space given its over-indexation to high-end customers, who tend to be more resilient in times of macro slowdowns,” said analyst Carole Madjo.

“It confirms our idea that higher exposure to quality names is the most appropriate course of action for investors in a moderating market where the sector has corrected in broad-brushed fashion,” added Bernstein analyst Luca Solca.

Japan remained the most resilient territory, with sales up 24.1 percent in the third quarter, and the Americas held its own with growth at 20.4 percent.

Asia, where China has provided an exceptional boost for the brand since its reopening, lagged, with sales up 10.2 percent across the region. The company noted that sales had been “exceptional” in the country last year, and it was playing against a strong comparison basis.

It’s still investing in China, with a new store opening in Tianjin in July.

Sales in the Americas continued their growth pattern in the third quarter, riding high on the opening of a new store in Los Angeles in July, after Aspen in June.

Watches remained the strongest performing category in the third quarter, up 22 percent, while ready-to-wear and leather goods performed well, up 18.3 percent and 15.8 percent respectively.

Looking at the first 9 months of the year to Sept. 30, growth was up 22 percent at constant exchange.

Asia, excluding Japan, looked stronger in that framing, with sales up 21 percent. The company noted that the region continued its strong momentum. Sales were robust in Greater China, Singapore, Thailand, Australia and Korea.

“The group continues the year 2023 with confidence, thanks to the highly integrated artisanal model, the balanced distribution network, the creativity of collections and the loyalty of clients,” the company said.

“In the medium-term, despite the economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates. Thanks to its unique business model, Hermès is pursuing its long-term development strategy based on creativity, maintaining control over know-how and singular communication.”

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