Hermès Comfortably Passes $5 Billion In First Quarter
Hermès has again highlighted the weakness of LVMH by generating strong growth of 7% in the first quarter against the Louis Vuitton owner's 3% contraction (both at constant currency). And despite Trump's changing tariffs threats, the French scarves to leather handbags house is looking at further robust growth this year.
Consolidated revenue figures at Hermès, released today, hit €4.1 billion ($5.3 billion) for the first three months of the year. Whereas LVMH, owned by billionaire Bernard Arnault, did not see growth in any of its divisions leading to its share price plunging earlier this week, almost all of Hermès big revenue-driving segments achieved solid Q1 growth.
The luxury goods company, famous for its timeless Birkin and Kelly bags, was steered by its two biggest divisions, leather goods/saddlery and ready-to-wear/accessories, which surged by 10% and 7.2% respectively. The two divisions accounted for almost 72% of Hermès revenue in the first quarter and a big driver was demand for the new Médor and Mousqueton bag models.
The much smaller segments of jewelry and Hermès home products (grouped financially as 'other'), and silk/textiles were also on a growth path, climbing by 6.1% and 4.5%. Only the smallest segment at Hermès; watches and beauty, were in decline, by 10% and 0.5% respectively. They accounted for 5.8% of the company's revenue in Q1.
In a statement, Axel Dumas, executive chairman of Hermès, said: 'Despite a high comparison basis in the first quarter, the group achieved solid sales growth. In a complex geopolitical and economic context, the house is strengthening its fundamentals more than ever.'
Those fundamentals include strict controls on quality and keeping creativity at the heart of the brand. Dumas added that vertical integration was also 'a guarantee of preserving unique savoir-faire' and something that would therefore be pursued further.
Hermès' strategy is based on what it calls creative freedom. This allows its artistic directors, every year, to come up with a theme and run with it; often something connected to the house's history which spans nearly 200 years. 'Drawn to craft' is the theme this year; 'from the saddle stitch to the pencil stroke, everything at Hermès begins with drawing' said the company.
At an operational level, to guarantee the craftsmanship the brand is known for, Hermès has accelerated the securing of supplies of materials, consolidating relations with its suppliers over time. The vertical integration that Dumas mentioned has been via partnerships and acquisitions. This also ensures traceability in its supply chains and supports its development strategy with regards to materials as well as techniques.
Geographically, Hermès' biggest sales region of Asia Pacific (excluding Japan) was its weakest but still grew by 1.2% in the first quarter. Japan, had the best growth, topping 17%, while the Americas was the weakest outside Asia, but again has a respectable increase of 11%. The company said that there had been 'solid momentum' in the United States in March, before Trump's 'liberation day' tariffs were announced on April 2.
As a sign of its confidence, Hermès is increasing it's production capacities. Later this year, the company will inaugurate L'Isle-d'Espagnac, a leather goods workshop in Charente, while Loupes in Gironde, and Charleville-Mézières in Ardennes, are scheduled to open in 2026 and 2027 respectively.
They will reinforce the nine centers of expertise located across France, further underscoring the brands heritage. This comes at a time when viral videos about Chinese-made luxury are doing the rounds on social media, and undermining some European brands.
Looking ahead to the rest of 2025, Hermès confirmed it would remain focused on 'an ambitious goal for revenue growth at constant exchange rates' but did not put a number on it. In a statement the company added: 'In a more uncertain economic and geopolitical context, the group has moved into 2025 with confidence, thanks to the highly integrated artisanal model, the balanced distribution network, the creativity of collections, and the loyalty of clients.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Wall Street Journal
31 minutes ago
- Wall Street Journal
Europe's Exporters Feel the Chill From Trump Tariffs
Europe's exports dropped sharply in April as demand was squeezed by President Trump's tariff increases, leading to a fall in factory output that suggests economic growth has slowed after a strong start to the year. European Union exports fell by close to 10% compared with a month earlier, a dramatic reversal from the increase in March as American importers stocked up ahead of Trump's tariff announcement.
Yahoo
34 minutes ago
- Yahoo
The Senate GOP's hard-liners are suddenly sounding softer on the megabill
The Senate's conservative hard-liners vowed to wage holy war against the 'big, beautiful bill.' Now they appear to be coming to Jesus. The recent rhetorical downshift from some of the loudest GOP critics of the pending megabill underscores the political reality for conservatives: As much as they want to rail publicly about the legislation and the need to address any number of pressing national emergencies in it, very few are willing to buck President Donald Trump on his biggest priority. None of them are ready to cave just yet. But the White House and their GOP colleagues increasingly believe that three senators in particular — Sens. Ron Johnson of Wisconsin, Mike Lee of Utah and Rick Scott of Florida — are now on track to support the bill. Johnson, in particular, has softened his once-fierce criticism of the legislation in recent days. 'We all want to see President Trump succeed,' he said in a brief interview this week. 'Everybody is trying to help. That's why, if I seem to have been striking a more hopeful tone, it's because I am more hopeful.' Just a couple of weeks ago, Johnson was demanding near-unworkable levels of spending cuts and warning that the bill would drive the nation off a fiscal cliff. Then the Trump administration and members of Republican leadership went to work. Johnson made a pitch to Trump during a recent one-on-one phone call to let him work with administration officials on his deficit reduction plan. That led to a meeting with Vice President JD Vance and Kevin Hassett, the director of the National Economic Council. A person with knowledge of the meeting, granted anonymity to speak candidly, said afterward that the White House is 'optimistic that there's a path to getting Johnson to yes.' Trump also privately urged Johnson during a meeting with other Finance Committee Republicans last week to speak more positively about the bill. The callout came after Trump officials — and Trump himself — grew annoyed watching Johnson savage the bill on television. His message: You should be out there selling this bill proudly, he told Johnson, according to two White House officials granted anonymity to describe the meeting — arguing that even if he doesn't love every detail, there was plenty in the bill for Republicans to be proud of. 'When the president says, 'Ron, you've been so negative, that's just not even helpful,' I want to be helpful,' Johnson said, acknowledging Trump's message in the meeting and admitting he has 'downplayed what is good in the bill.' One of the White House officials summarized the approach to Johnson: 'Don't be negative to create leverage for yourself,' the person said. 'If you want to negotiate, like, we can negotiate in private. We're all reasonable people.' The hands-on efforts to win over Johnson are part of a larger effort to try to help the fiscal hawks find a soft landing — and at least the semblance of some concessions that will be able to hold up as wins in the end. That's played out in face-to-face meetings with administration officials, negotiations over pet provisions and discussions about how to continue the fight to cut budget deficits down the road. Being able to win over their deficit hawks would be a huge boon to Majority Leader John Thune, who has acknowledged that he's got one hard 'no' vote in Sen. Rand Paul, who firmly opposes the bill's debt-ceiling hike. Thune can only afford to lose three GOP senators, with Vance breaking a tie. That has given the fiscal hawks leverage, since the GOP leaders can't afford to lose all of them, and that's on top of the other potential headaches they have to navigate elsewhere in the conference. To hear the fiscal hawks tell it, they are sounding a more positive note about their ability to support the bill because the administration is starting to take their demands seriously. To help appease their holdouts, GOP leaders have tried to scrounge up additional savings beyond what is included in the House bill. 'I believe we'll get a deal done. I'm doing everything I can to represent my state,' Scott said in a brief interview. GOP leaders are working to assuage Lee by tucking one of his top priorities into the bill. The deregulatory proposal, known as the REINS Act, was initially expected to run afoul of Senate rules for the party-line reconciliation process, but leaders have been working to try to find a version that could pass muster. House conservatives, meanwhile, have grown increasingly worried that the Senate, with the blessing of their fiscal-hawk allies, will send back a bill that waters down some of their hard-fought victories. The House Freedom Caucus has laid out public demands, while its members have met privately with Lee, Scott and Johnson to strategize about additional spending reductions and maintaining their policy wins. The Senate hard-liners aren't ready to concede just yet. Senate Budget Chair Lindsey Graham (R-S.C.) has promised Johnson he will advance a second reconciliation bill, giving conservatives another chance to enact cuts. But Johnson said that wouldn't be enough to get him on board. Instead he wants a 'forcing mechanism' to maintain a longer-term push to return to 2019 spending levels. He's letting the White House brainstorm other ideas and described himself as 'reasonably flexible.' Lee said in a statement he's 'been working with my colleagues and the White House to make the Big Bill Beautiful.' But added: 'It's not where it needs to be yet.' 'We need to sell federal land to help fix the housing crisis, terminate benefits that flow to illegals, end the Green New Scam, and get rid of the Medicaid provider tax. I want to see this effort cross the finish line, but we need to do more,' he added. Even as they continue to push, their colleagues see the signs of late softening — and aren't surprised whatsoever. 'They'll fold,' said a GOP colleague who was granted anonymity to speak candidly. Sen. John Hoeven (R-N.D.) said that Republicans have 'made progress' with Johnson and 'I wouldn't count him out.' And two others, Sens. Mike Rounds (R-S.D.) and John Kennedy (R-La.), said they expect Lee, Scott and Johnson to come around when the bill comes up for a final vote, even if they don't ultimately love every provision. 'They're very gettable,' Kennedy said. 'At some point people are just going to have to decide, is this good enough?' Rachael Bade and Meredith Lee Hill contributed reporting.
Yahoo
44 minutes ago
- Yahoo
Posthaste: Canadian snowbirds now have more reasons than Trump to dump that Florida condo
More Canadian snowbirds are putting their properties in Florida on the market, according to media reports, but unloading them might not be that easy — especially condos. Real estate in the Sunshine State boomed during the pandemic, but now the tables have turned and the condo market is in a serious slump, said Admir Kolaj, a Toronto Dominion economist, in a recent report. Condos play a big role in Florida real estate. There are about 1.5 million of them, accounting for 15 per cent of the state's housing stock, double the national share. Over the past three months, sales have dropped 13 per cent and are down more than 25 per cent from pre-pandemic levels. Prices have fallen about 8 per cent from their peak, said Kolaj. Inventories are climbing, with close to 80,000 condos and townhomes for sale, about 20,000 or 35 per cent more than a year ago. Headwinds buffeting the market include higher interest rates (mortgage rates in the U.S. are still close to 7 per cent), a steep drop-off in domestic migration and economic uncertainty brought on by Donald Trump's tariff war. But Florida condos face their own special set of problems. For one, the Sunshine State is the most expensive in America for homeowners insurance, with condo-specific premiums estimated at double the national average, said Kolaj. Homeowner association fees are also climbing under new stricter regulation on condo inspections and repairs. Buildings older than 30 years — more than half the condos in Florida — must undergo milestone inspections and condo associations have to foot the bill for repairs. Kolaj said in some reported cases where there was the need for major repairs special assessment fees ran into the thousands. 'Given all the headwinds that the condo sector faces, it is no wonder that many owners are choosing to list their units for sale, growing the glut in an already-flooded market,' he said. Canadians are among them. Florida has the largest share of foreign home buyers in America, accounting for 20 per cent of the national total. Twenty-seven per cent of those buyers are Canadian, the highest percentage save for Latin Americans. According to media reports, more of those Canadians are putting their properties on the market, spurred by a weaker dollar, stricter travel requirements and Trump's repeated comments about Canada as the 51st state. Realtors in Florida told CNN earlier this year they have seen a 'sharp uptick' in Canadians looking to sell their homes. 'Some of the clients I have been dealing with want to sell at any cost, even at a loss,' said Share Ross, a realtor based in southeast Florida. Gulf Coast News reported in April that Canadians were making a 'mass exodus' from Southwest Florida, after the U.S. required background checks and fingerprints if they planned to stay more than 30 days in the state. Reduced foreign interest is just one more thing on a long list of challenges facing Florida's condo market, said Kolaj. And owners may have to wait a while for a rebound. There are indications that the state will soften its law on older condos and if other conditions fall into place the condo market could find firmer footing by late 2026, he said. to get Posthaste delivered straight to your labour productivity is finally making gains. As today's chart from BMO Capital Markets shows productivity growth is on the rise and catching up to the growth rate of the United States, though that has been declining. Statistics Canada said last week that productivity grew 0.2 per cent in the first quarter of 2025. That's down from 1.2 per cent growth in fourth quarter of 2024, but it is the first time there have been consecutive quarterly increases since the start of the COVID-19 pandemic. 'The bad news is that productivity could take a hit in the coming quarters as economic growth is expected to slow meaningfully due to trade uncertainty,' said BMO senior economist Shelly Kaushik. Former prime ministers Jean Chretien, Joe Clark and other politicians and experts attend a summit in Calgary to discuss issues including peace and security, trade, energy security and critical minerals, artificial intelligence and quantum computing. Today's Data: United States Producer price index Earnings: Transat AT Inc., Adobe Inc. National Bank's $5 billion megadeal was decades in the making for Dominic Paradis Can Canada repair ties with China? How the two countries could end the tariffs war and expand trade Don't assume further rate cuts from the Bank of Canada, Poloz warns With the cost of homes on the rise, the typical first-time homebuyer in Canada looks different than in the past. The Financial Post takes a look at who is buying and what it takes for them to own their first home. Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@ with your contact info and the gist of your problem and we'll find some experts to help you out while writing a Family Finance story about it (we'll keep your name out of it, of course). Want to learn more about mortgages? Mortgage strategist Robert McLister's Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won't want to miss. Plus check his mortgage rate page for Canada's lowest national mortgage rates, updated daily. Visit the Financial Post's YouTube channel for interviews with Canada's leading experts in business, economics, housing, the energy sector and more. Today's Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg. Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@ Canada home prices are heading into correction territory Just when you thought Toronto's condo market couldn't get any worse …
