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Sales at constant exchange rates jumped 17% to €3.8 billion ($4.1 billion) in the first quarter, Hermès International SCA said Thursday. This was more than analysts expected.
The shares rose as much as 1.3% in Paris before reversing those gains. They’re up nearly a quarter this year, beating rivals LVMH Moet Hennessy Louis Vuitton SE and Gucci owner Kering SA.
Hermès typically caters to the most affluent customers which makes it more resilient in a challenging luxury goods market. Its fortunes contrast with the challenges at Kering, which is seeking to turn around its biggest brand Gucci — efforts that are taking time to bear fruit.
Hermès’ revenue in its key Asia Pacific market, excluding Japan, jumped 14% to €1.92 billion in the period, while its crucial leather goods and saddlery division grew by 20%, both better than estimates.
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Hermès saw softer traffic in Greater China in March after the Chinese New Year with a “slight erosion” of customers buying more affordable products such as its silk scarves. But that was compensated by shoppers splurging on its more expensive leather, ready-to-wear and jewelry goods, Chief Financial Officer Eric du Halgouet told reporters on a call.
Hermès’ perfume and beauty and silk divisions grew by 4.3% and 7.9% respectively during the quarter.
By Angelina Rascouet
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Case Study | Inside Hermès’ Best-in-Class Leather Goods Strategy
How a unique approach to supply chain, design, communications and retail has powered blockbuster demand for iconic bags like the Birkin and Kelly, enabling the French leather goods house to face down rivals and become a global megabrand with a market capitalisation greater than Nike’s.
