Hermes International SCA Reports Q3 Sales Growth

Hermes International SCA (EPA:HRMS) posted a sharp increase in third-quarter sales on Thursday, outperforming competitors impacted by the slowdown in China, as the luxury brand's handbags continue to attract wealthy buyers.

The company’s shares rose over 1% in European trading.

Financial Performance

For the three months ending September, the French company reported revenue of €3.7 billion ($3.99 billion), reflecting an 11.3% rise at constant exchange rates, aligning with analyst consensus estimates.

Jefferies analysts remarked that the sales growth “confirms an industry-beating resilience, supported by the more premium parts of the group's offering.”

Regional Insights

A sequential weakening in the Chinese market was noted, aligning with industry trends. However, RMS has maintained strong momentum in EMEA and resilience in the Americas.

Analysts' Perspectives

Citi analysts expressed concerns about the potential normalizing of growth in non-leather categories, although they believe pricing will limit downside risks to FY25E revenues.

Outlook

Despite global economic uncertainties, Hermès reiterated its commitment to medium-term revenue growth targets at constant exchange rates and ongoing recruitment efforts.

Sales growth in the Asia Pacific region (excluding Japan) was modest, with a mere 1% increase. Eric du Halgouet, executive vice president of finance, commented on China’s steady trends post-Chinese New Year, despite lower traffic.