PARIS — Hermès International remained ahead of the luxury pack, with the French luxury group’s sales driven by its core categories of leather goods and silks.
Second quarter revenue rose 6.7 percent at constant exchange rates to 4.1 billion euros, slightly faster than the first quarter, with growth driven by double-digit gains in the Americas and Japan, continued resilience across Europe and a slight return to growth in Asia outside Japan.
The results were largely in line with analysts’ expectations, with “no major surprises,” said RBC analyst Piral Dadhania.
The numbers reinforce Hermès’ position as one of the industry’s strongest performers at a time when much of the luxury sector continues to grapple with softer aspirational spending and a prolonged slowdown in China.
“In tougher periods of luxury demand, Hermes’ relative defensiveness is more attractive as it is likely to suffer less than peers, given its absolute luxury brand positioning and supply constrained model for its most coveted products, although we do anticipate a third consecutive year of modest margin compression from an elevated COVID level,” added Dadhania.
The Americas remained Hermès’ strongest market, with second-quarter sales rising 13.7 percent at constant exchange rates to 846 million euros, highlighting continued demand in the U.S.
Europe also delivered solid growth. Sales in France increased 6.2 percent to 407 million euros, while the rest of Europe rose 8.3 percent to 627 million euros, bringing regional growth to 7.4 percent overall.
In Asia, Japan posted one of the strongest performances of the quarter, with growth of 12.3 percent at constant currency, although reported sales were more flat because of exchange rates. The group opened a new store in Nagoya last month, while re-opened its flagship in Osaka following expansion and renovation works.
Asia-Pacific excluding Japan grew 2.5 percent, with conditions in China stabilizing after several challenging quarters.
Overall Asian sales increased 4.4 percent at constant currency.
The group opened a new store in Beijing during the quarter, while stores in Hong Kong and Taipei reopened following renovations and expansion.
The Middle East was the only region to decline, with sales down 2.4 percent at constant currency, due to geopolitical tensions and the ongoing U.S.-Iran war.
Looking at product categories, leather goods remained the group’s primary growth engine, with sales climbing 10.2 percent at constant exchange rates to 1.91 billion euros. The division, home to the Birkin and Kelly handbags, once again outperformed the wider business, demonstrating the enduring strength of demand for Hermès’ signature bags.
Silks were another standout category, with sales rising 12.2 percent to 212 million euros, making it one of the fastest-growing divisions during the quarter.
Ready-to-wear posted more measured growth of 3.6 percent to 1.12 billion euros, while watches rose 4.4 percent and the group’s other businesses increased 4.0 percent.
Beauty and fragrance was the only category to decline, with sales falling 9.5 percent at constant exchange rates to 107 million euros.
Leather goods alone accounted for nearly half of quarterly revenue and continued to grow substantially faster than the group overall, reinforcing its role as the principal driver of sales and profitability.
“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,” the company said in a statement.
