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Hermes, The Maker Of Birkin Bags, Maintains Its Lead Over Competitors with an End-Of-Year Sales Increase

by Adam
February 26, 2025
in Don't Miss
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Hermes, The Maker Of Birkin Bags, Maintains Its Lead Over Competitors with an End-Of-Year Sales Increase
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The French luxury brand Hermes (HRMS.PA) revealed fourth quarter earnings on Friday that were significantly better than analysts had predicted. The results demonstrated a strong demand from affluent customers for the brand’s priciest products, such as Birkin purses, which can cost up to $10,000.

As the industry experiences its slowest sales in years, Hermes continues to outperform competitors like LVMH (LVMH.PA), opens new tab, and Keringowned Gucci (PRTP.PA), opens new tab, with quarterly sales increasing by almost 18%. Due to a property crisis that restrained spending in China and inflation-weary consumers abroad, luxury sales worldwide dropped by about 2% last year.

“We are celebrating an excellent year, in a tougher environment,” executive chairman Axel Dumas said during a phone conference with reporters. Early Paris trading saw a 4.5% increase in the company’s shares, propelling its European peers.

“Hermes joins the elite club of those smashing Q4 forecasts,” Luca Solca, an analyst at Bernstein, stated. Due to double-digit growth in mainland China, Italian apparel manufacturer Moncler posted fourth-quarter sales growth that outpaced the market on Thursday. Hermes reported that its fourth-quarter sales reached 3.96 billion euros ($4.14 billion), an 18% increase at constant exchange rates. The company’s growth was fastest in the Americas and Japan during the crucial end-of-year period. According to a Visible Alpha consensus quoted by UBS, the growth exceeded analyst forecasts for a 10% increase.

According to Citi analysts, the profits would probably raise market expectations for growth in 2025, which is presently projected to be just over 10%.

The division that generates over half of the group’s income, Hermes Leather Goods and Saddlery, experienced the strongest growth, rising 21.5%. A 13% increase was anticipated by analysts.

In contrast to Hermes’ double-digit gain, LVMH saw a 1% increase in the final three months of the year. Despite the decline in traffic in Greater China since the end of the first quarter of 2024, Hermes’ largest market is Asia, excluding Japan, where sales increased by 9% in the fourth quarter.

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