Hermes Sales Surge as Wealthy Shoppers Splurge on Luxury Handbags
Paris, France - Hermès International SCA (EPA: RMS) reported a surge in sales during the holiday season, with a 17.9% increase in the fourth quarter at constant exchange rates, exceeding analyst expectations of 11%.
Strong Regional Performance
The region encompassing China and the Americas significantly outperformed estimates, driving the overall sales growth.
Exceptional Leather Goods Demand
Sales in the leather goods and saddlery division jumped 21.9%, led by the iconic Birkin and Kelly handbags, which continue to command high prices and long waiting lists.
Resilience Amid Luxury Market Volatility
Hermes has consistently outperformed its peers due to its focus on ultra-high-end customers, who are less susceptible to economic downturns.
Price Increases and Employee Bonuses
The company implemented price increases of 6% to 7% globally, reflecting its strong pricing power. Additionally, Hermes announced a €4,500 bonus for its 25,000+ employees.
Expansion and Innovation
Despite the ongoing watch industry challenges, all divisions experienced growth in the fourth quarter. The company also plans to pay an exceptional dividend of €10 per share.
Outlook for 2023
Executive Chairman Axel Dumas expressed optimism for 2023 but acknowledged the high comparables. He emphasized that Hermes will continue to focus on organic growth and innovation.
Commitment to Global Production
Hermes maintains its global production footprint, including France, Switzerland, and Italy, and is not adjusting its plans based on potential tariffs.