Hermès defies the luxury market slowdown, with strong sales in Asia, Europe, and the Americas giving them this success, with leather goods leading divisions. Also advances its Sandoz acquisition, solidifying its position as a luxury powerhouse.
Hermès attributes its sales increase to the strong performance of the Asian market. The French luxury conglomerate closed the 2024 period with a revenue of €11.208 billion, reflecting an 11.4% growth compared to 2023.
The brand has managed to end the first nine months of the 2024 with rising sales. While competitors like LVMH and Kering have faced declining revenue during the same period, Hermès has reported substantial growth, driven largely by the robust demand observed in Asia.
Specifically, the company achieved sales of €11.208 billion during the period, marking an 11.4% rise year-over-year. This success is primarily linked to the strong purchasing behavior of Asian consumers. In the markets of Japan and Asia-Pacific, Hermès generated €6.158 billion in sales, reflecting a 6% increase from 2023.
In Europe, recorded a remarkable 15.9% growth in sales, reaching €2.6 billion. Meanwhile, in other regions like the Americas, the company saw a revenue of €1.995 billion, a year-over-year increase of 11.7%.
By business divisions, Hermès continues to concentrate its core operations in leather goods, generating €4.789 billion in revenue, an impressive 14.7% growth.
Apparel and accessories came in as the second-largest division, reporting €3.296 billion in sales, followed by categories such as textiles, perfumes, and cosmetics.
One of the recent milestones for the powerhouse is its potential acquisition of Sandoz, the Swiss watch manufacturer owned by the Sandoz Family.
Negotiations are reportedly nearing completion, despite previous interest in Sandoz by another French luxury giant, LVMH.
Hermès’ plans emerge months after the Sandoz Family announced their intent to sell the company in February 2024. Following several months of discussions, appears to have taken the lead over LVMH.
Since 2006, The fashion house has also held a 25% stake in Vaucher. Meanwhile, LVMH reported declining sales during the same nine-month period, primarily due to weaker performance in its wines and spirits division and a drop in revenue from the Japanese market during the third quarter.
At the close of the first half of the 2024, Hermès increased its sales by 12% and saw its net income rise by 6.4%.
Specifically, the company’s revenue for the first six months reached €7.504 billion, compared to €6.698 billion in the same period of 2023. Operating income grew by 6% to €3.148 billion, while net income for the period stood at €2.368 billion.
Regionally, all markets showed positive growth in the first half of the year. By division, leather goods sales surged 19%, while the apparel and accessories segment grew by 15%, and the perfume division saw a 5% increase.
“I think that high-end consumers have become an even greater focus for the industry as they have demonstrated a very high propensity to spend, provided you bring them something that they consider valuable and distinct. And I think that as far as distinction is concerned, Hermès has quite a lot of it.” said Luca Solca, senior analyst of global luxury goods at Bernstein (a global asset management firm providing investment management and research services worldwide).
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