Birkin bag maker Hermes expands its lead over rivals in year-end sales
Mimosa Spencer and Tashiro Hammel
PARIS (Reuters) – French luxury group Hermes reported four quarter results on Friday, far exceeding analyst expectations.
With quarterly sales up by around 18%, Hermes continues to outperform rivals like LVMH and Kering-owned Gucci as the industry struggles with the slowest sales in years. Last year, global luxury sales fell by around 2%, hurting by shoppers who endured the crimping spending of the property crisis in China and inflation elsewhere.
“We are celebrating a great year in a more challenging environment,” executive chairman Axel Dumas called the journalist.
The company’s shares rose 4.5% in early Paris trade, lifting its European peers. 0952 GMT increased by 2%.
Hermes stock has grown by a quarter over the past 12 months, and now with a market capitalization of less than 297 billion euros ($3111.1 billion), its luxury rival LVMH, Europe’s most valuable listed company It’s close to that of. LVMH data shows more staff across 75 brands.
Hermes has long focused on creating timeless, ultra-high-ranking products and maintaining intentional shortages.
“Hermes also confirmed that in the fourth quarter, there were gorgeous consumers, including China, that were there in the fourth quarter, for brands with solid momentum and execution,” a JP Morgan analyst said. Ta.
On Thursday, Italian outerwear maker Monkler also reported sales growth that fueled the fourth quarter consensus.
Hermes said its fourth quarter sales reached 3.96 billion euros, up 18% at a constant exchange rate, accelerated at the end of the year, and grew the fastest in the US and Japan.
According to the visible alpha consensus cited by UBS, growth has beaten analysts’ expectations for a 10% rise.
Hermes’ leather products and saddlery division, which accounts for almost half of the group’s revenue, rose 21.5%. Analysts were hoping for a 13% increase.
Hermes’ double-digit growth is in contrast to a 1% increase in LVMH over the past three months.
Asia, excluding Japan, is Hermes’ largest market, and despite the Chinese massive transportation recession seen since the end of the first quarter of 2024, sales there rose 9% in the fourth quarter I did.
However, Dumas’ executive chair added that despite some positive signs, it is “too early to see an inflection” in the industry.
Hermes is known for its strict understanding of production, and is sticking to an annual increase of around 6-7% per year, with order backlogs in place to ensure demand while maintaining the label’s exclusive aura. It alleviates from the decline.