Hermès Sales Growth Slows to 7.2 Percent in Q1
PARIS – Amid the luxury slowdown, Hermès International showed continued strength with sales in the first quarter up 7 percent at constant exchange rates to 4.13 billion euros.
The numbers fell slightly short of analysts' expectations, which had forecast the gain at 8 percent to 4.2 billion.
More from WWD
Trump's Press Secretary's Dress Stirs Up Social Media in China
Fashion Group International Presents Rising Star Awards to Bonnie Young, Natalia Fedner, Rex Shoes and More
Brunello Cucinelli Posts Growth in Q1, Cites Solid Upward Trend in April
While Hermès has outpaced its French luxury rivals such as LVMH Moët Hennessy Louis Vuitton, which reported sales down 2 percent on Monday, it marks a deceleration from the fourth quarter, when the company's sales grew 18 percent.
'In a complex geopolitical and economic context, the house is strengthening its fundamentals more than ever,' Hermès chief executive officer Axel Dumas said in a statement. 'Despite a high comparison basis in the first quarter, the group achieved solid growth in sales.'
He highlighted the group's vertically integrated model as one of its core strengths.
The result 'confirms a slower consumer demand environment,' Bernstein analyst Luca Solca wrote in a research note.
The U.S. showed robustness, up 11 percent at constant exchange, particularly 'solid momentum' in March, even as tariff uncertainty gripped the market.
Sales in Europe were up 13 percent, excluding France. Hermès' home country showed robust numbers of 14 percent growth, which the company chalked up to 'sustained local demand and dynamic tourist flows.'
The Middle East continued to gain momentum, up 14 percent at constant currency, while Japan saw sales jump 17 percent in the quarter, driven by local clients.
The rest of Asia proved to be the weakest point, with sales up just one percent on the continued weakness of China.
For the leather goods division, sales at constant currency were up 10 percent, boosted by the new bag designs Médor and Mousqueton, while sales of its ready-to-wear continued to be a dark horse in the house, up 7 percent in the quarter.
Silk and textiles, which includes the house's famous scarves, were up 5 percent, while jewelry was up 6 percent.
Sales in the fragrance and beauty division were flat.
Watches were the weakest link, with the category down 10 percent in the quarter, despite the introduction of two new models during the Watches and Wonders fair in Geneva, and updated version of its classic H08.
The company is continuing its expansion, and will open three new production facilities in France over the next three years.
Sales were up 9 percent with currency fluctuations taken into account, which boosted the company's bottom line by 49 million euros in revenue.
'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.
'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.'
Best of WWD
Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures
Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist
Zegna Shares Start Trading on New York Stock Exchange
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
12 minutes ago
- CNBC
Trump tariffs may remain in effect while appeals proceed, U.S. appeals court rules
A federal appeals court allowed President Donald Trump's most sweeping tariffs to remain in effect on Tuesday while it reviews a lower court decision blocking them on grounds that Trump had exceeded his authority by imposing them. The decision by the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. means Trump may continue to enforce, for now, his "Liberation Day" tariffs on imports from most U.S. trading partners, as well as a separate set of tariffs levied on Canada, China and Mexico. The appeals court has yet to rule on whether the tariffs are permissible under an emergency economic powers act that Trump cited to justify them, but it allowed the tariffs to remain in place while the appeals play out. The Federal Circuit said the litigation raised issues of "exceptional importance" warranting the court to take the rare step of having the 11-member court hear the appeal, rather than have it go before a three-judge panel first. It scheduled arguments for July 31. The tariffs, used by Trump as negotiating leverage with U.S. trading partners, and their on-again, off-again nature have shocked markets and whipsawed companies of all sizes as they seek to manage supply chains, production, staffing and prices. The ruling has no impact on other tariffs levied under more traditional legal authority, such as tariffs on steel and aluminum imports. A three-judge panel of the U.S. Court of International Trade ruled on May 28 that the U.S. Constitution gave Congress, not the president, the power to levy taxes and tariffs, and that the president had exceeded his authority by invoking the International Emergency Economic Powers Act, a law intended to address "unusual and extraordinary" threats during national emergencies. The Trump administration quickly appealed the ruling, and the Federal Circuit in Washington put the lower court decision on hold the next day while it considered whether to impose a longer-term pause. The ruling came in a pair of lawsuits, one filed by the nonpartisan Liberty Justice Center on behalf of five small U.S. businesses that import goods from countries targeted by the duties and the other by 12 U.S. states. Trump has claimed broad authority to set tariffs under IEEPA. The 1977 law has historically been used to impose sanctions on enemies of the U.S. or freeze their assets. Trump is the first U.S. president to use it to impose tariffs. Trump has said that the tariffs imposed in February on Canada, China and Mexico were to fight illegal fentanyl trafficking at U.S. borders, denied by the three countries, and that the across-the-board tariffs on all U.S. trading partners imposed in April were a response to the U.S. trade deficit. The states and small businesses had argued the tariffs were not a legal or appropriate way to address those matters, and the small businesses argued that the decades-long U.S. practice of buying more goods than it exports does not qualify as an emergency that would trigger IEEPA. At least five other court cases have challenged the tariffs justified under the emergency economic powers act, including other small businesses and the state of California. One of those cases, in federal court in Washington, D.C., also resulted in an initial ruling against the tariffs, and no court has yet backed the unlimited emergency tariff authority Trump has claimed.
CNN
14 minutes ago
- CNN
Trump's most sweeping tariffs can remain in place for now, appeals court rules
President Donald Trump's heftiest tariffs cleared a court hurdle for now, after a federal appeals court ruled Tuesday that they could take effect while legal challenges play out. The decision came after the Trump administration appealed the Court of International Trade's ruling finding the president exceeded his authority to impose country-wide tariffs claiming a national emergency. 'Both sides have made substantial arguments on the merits. Having considered the traditional stay factors… the court concludes a stay is warranted under the circumstances,' according to the ruling. The stay is pending the course of the appeal, the court wrote, adding that the case will be heard on a sped-up basis by the full panel of judges at the court. 'The court also concludes that these cases present issues of exceptional importance warranting expedited en banc consideration of the merits in the first instance,' the order said. The appeals court ruling, however, has no bearing on the sector-wide tariffs Trump previously enacted, including those on aluminum, steel, cars and car parts. That's because he imposed those levies under Section 232 of the Trade Expansion Act – a different law than the one Trump cited for his broader trade actions. Section 232 gives a president significant power to levy tariffs on specific sectors if they believe there is a national security threat risk. This is a developing story and will be updated.
CNN
14 minutes ago
- CNN
Trump's most sweeping tariffs can remain in place for now, appeals court rules
President Donald Trump's heftiest tariffs cleared a court hurdle for now, after a federal appeals court ruled Tuesday that they could take effect while legal challenges play out. The decision came after the Trump administration appealed the Court of International Trade's ruling finding the president exceeded his authority to impose country-wide tariffs claiming a national emergency. 'Both sides have made substantial arguments on the merits. Having considered the traditional stay factors… the court concludes a stay is warranted under the circumstances,' according to the ruling. The stay is pending the course of the appeal, the court wrote, adding that the case will be heard on a sped-up basis by the full panel of judges at the court. 'The court also concludes that these cases present issues of exceptional importance warranting expedited en banc consideration of the merits in the first instance,' the order said. The appeals court ruling, however, has no bearing on the sector-wide tariffs Trump previously enacted, including those on aluminum, steel, cars and car parts. That's because he imposed those levies under Section 232 of the Trade Expansion Act – a different law than the one Trump cited for his broader trade actions. Section 232 gives a president significant power to levy tariffs on specific sectors if they believe there is a national security threat risk. This is a developing story and will be updated.
