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PARIS – Hermès' full-year sales topped €15 billion ($16 billion) last year, rising 15 percent excluding currency shifts despite a tough market for luxury brands.
Growth accelerated at year-end — rising 18 percent compared to 11 percent in the previous quarter — in the latest sign that global demand for high-end goods could be turning a corner. This week, Moncler also reported sales that beat expectations, while Kering’s Saint Laurent and Balenciaga units saw sales falling at a slower rate.
Sales notably picked up in Asia excluding Japan, including the China market whose sluggish economy has weighed on luxury brands. Hermès sales in the region grew 9 percent, compared to 1 percent the previous quarter.
In China, “we see positive signs, but not enough to definitively call it a turnaround,” chief executive Axel Dumas said in a presentation at the brand’s Rue de Sèvres store.
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Hermès announced its figures the morning after US president Donald Trump proposed a sweeping plan to impose reciprocal tariffs on trading partners.
“One of the things that concern me the most are the evolution of global geopolitics. It’s not tariffs that concern me the most, it’s the tension between peoples,” Dumas said, adding that Trump’s plan would lead to higher prices in U.S. stores if implemented. “We’re not so cunning. We don’t have a marketing policy for pricing, so if import duties go up we will have to raise the prices accordingly.”
Hermès has remained luxury’s fastest-growing listed player amid a global slowdown for the industry. A long-running shortage for its top-priced Birkin and Kelly handbags insulates the brand from economic shocks, as well as prompting brand aficionados to spend heavily across other product categories in an effort to curry favour with salespeople.
The brand has also set itself apart with more modest price increases than rival brands, whose dramatic hikes have galled customers, and its emphasis on high-quality “Made in France” craftsmanship. Last year, Hermès added 1,300 jobs in France, where it produced 74 percent of its products according to the brand.
Full-year operating profit reached €6.2 billion, or 40.5 percent of sales. The brand announced a bonus of €4,500 for employees worldwide, up from €4,000 the prior year.
Hermès’ business growth was fastest for leather goods, fashion and its “other products” segment including its increasingly significant trade in homeware and fine jewellery.
Watches were the only category to decline, with sales falling 4 percent in a “challenging context” for the category. New launches during the year, including the H08 sports watch and relaunched Kelly timepieces, were nonetheless met with “great success,” the group said.
