The logo of Hermes is seen on a store in Paris, France, on Feb. 7, 2024. Reuters-Yonhap
PARIS — Hermes, whose handbags sell for $10,000 and more, on Thursday reported stronger than expected fourth-quarter revenue growth, lifted by strong sales in the United States and Japan.
Thanks to its ultra-wealthy clients and large order backlog, the group has weathered a luxury sector slowdown better than most of its rivals, consistently increasing revenue while sales at other luxury groups, like LVMH and Kering, have been under pressure.
"The group is going into 2026 with confidence," said CEO Axel Dumas, adding that this year's price increases would be around 5-6 percent, down from a 6-7 percent rate in 2025, attributing the slower pace to currency shifts.
Hermes shares rose on the results, trading around 3 percent higher at 1515 GMT.
Chiara Battistini, luxury equity analyst at J.P. Morgan, said the price increases Hermes imposes on its customers are a key question for the company's growth outlook.
Many of its rivals have put the brakes on price rises due to falling sales. Gucci owner Kering's CEO earlier this week said a price hike "bonanza" post-pandemic had contributed to the company's revenue slide.
Sales of products, including Birkin and Kelly bags, silk scarves and perfume, grew by 9.8 percent in the fourth quarter in currency-adjusted terms, compared to an analyst consensus compiled by Visible Alpha of 8.4 percent growth.
Sales in the Americas region, mainly the United States, rose by 12.1 percent, beating expectations of around 9 percent, while sales in Asia excluding Japan — a region mainly driven by China — grew 8 percent.
With around 25,000 staff globally, family-controlled Hermes has become France's second-largest company by market capitalisation surpassed only by arch-rival LVMH, whose annual sales are more than four times bigger.
Source: Korea Times News
