Hermès Q1 sales rise 23%, China recovers, RTW and accessories are strong

By

Sandra Halliday

Published
Apr 14, 2023

Sales at luxe leather goods and fashion brand Hermès rose 23% at constant exchange rates in Q1, beating market expectations, as its fans in China and Europe ignored higher prices and continued to spend.

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Prices had risen around 7% early this year, against a usual annual rise of up to 3%.

Sales for the three months to March rose 22% in total to hit €3.38 billion, even though analysts had expected just a 15% rise.

Its CFO Eric du Halgouet said US store traffic was continuing to rise and post-period-end in April, trends remain positive.

The company said sales were “particularly dynamic in all the geographical areas and across all the business lines”. 

And Axel Dumas, Executive Chairman of Hermès, said the Q1 performance was “aligned with the good results of 2022 and reflects the success met by our collections all over the world, driven by the loyalty of our customers”.

Looking at the figures in more detail, sales increased “strongly” in group stores (+23% at constant exchange rates) and wholesale activities (+26%) benefited from the recovery in travel retail.

Asia excluding Japan was up 23%, “driven by a very good Chinese New Year”, while Singapore, Thailand, and Australia were also good. In January, the Nanjing store, in China's Jiangsu province, reopened at a new address after renovation and extension. 

Japan (+26%) recorded sustained growth, “based on the loyalty of local customers” and helped by events such as the men’s SS23 collection that was shown in March with an event held in Tokyo Bay. 

The Americas (+19%) was boosted by a new store in Naples, Florida, in the Gulf of Mexico, the 40th store in the US. 

Europe excluding France was up 21% while France rose 28%. The European growth was helped by stronger performances in the UK and Italy, “driven by the increase in tourist flows”.

The company reported that growth in Leather Goods and Saddlery (+19%) was driven by sustained demand across all geographical areas and an increase in production capacity.

The Ready-to-Wear and Accessories business line rose 34% as RTW proved popular and the SS23 collections “were given a great welcome [with] demand high for fashion accessories and shoes”.

The Silk and Textiles business line rose 20% while Perfume and Beauty was up a more modest 7%. Watches rose 25% on the back of strong sales of both new products and classics.