Hermès, the legendary luxury house, is still riding high despite a tough economic backdrop filled with geopolitical headwinds and financial uncertainty. Recently, the company reported mixed results in its latest sales figures, while planning price increases for American consumers to offset the impact of a 10% tariff imposed by the United States on European goods. As a result, on Thursday morning, the brand’s share price was down 2.5%. Over the last month, it’s dropped a whopping 7.3%.
The super-luxury house has clocked up their best sales ever, thanks in large part to that mind-blowing men’s aw/winter 2025 runway show at the Palais d’Iéna. They made headlines too when, in March, they paraded their women’s autumn-hiver 2025 collection at the Garde Républicaine. The threat of these tariffs makes a great difficulty for the company. To do that, among other things, they want to squeeze increased prices from their American customers.
Sales Performance and Market Dynamics
Even with those challenges, Hermès still managed to post sales growth in some important categories. Only one industrial sector, leather goods and saddlery, went through the roof with a boom-tastic 10% sales growth. That increase was driven by the introduction of hot new products such as the Mousqueton and Médor bags. The ready-to-wear and accessories segment drove the brand’s expansion with a 7% increase in sales.
Outside of France, sales throughout Europe were robust. As a continent, Europe boasted an astounding 13% growth. At the same time, sales in France jumped up an astonishing 14%. These staggering figures paint a pretty clear picture of just how well Hermès is still doing, even with huge external economic pressure.
“Despite a high comparison basis in the first quarter, the group achieved solid growth in sales, thanks to the trust of its customers and the commitment of the teams, whom I thank warmly.” – Axel Dumas, Executive Chairman of Hermès
Plans for Expansion and Production
In response to this unprecedented demand, Hermès is increasing its capacity to produce. New leather goods workshops are planned for Charente, Ardennes and Gironde. These facilities are set to go into operation between 2025 and 2027. This transition represents the brand’s continued dedication to upholding quality and craftsmanship while increasing the production capacity.
Aside from global growth in real estate, Hermès is committed to continued innovation within its fast-growing product lines. The brand’s recent launch of Terre d’Hermès Eau de Parfum Intense and Rouge Brilliant Silky fragrances is a strong signal that the brand is on its way to expanding beyond its current associations. Simultaneously, it’s been able to maintain robust sales increases in its fragrance and cosmetics unit.
Navigating Challenges Ahead
So while Hermès can claim incredible wins across the board, some divisions have really struggled. The watches category was hit the hardest, dropping by a staggering 10%. This decline occurred despite the introduction of a number of new models, including the Arceau Le temps voyageur, Hermès H08. This significant drop is alarming, not just for consumer preferences but for competitive positioning within this emerging category.
As Hermès prepares for potential headwinds from tariff impacts, it emphasizes its commitment to quality and creativity as foundational principles.
“In a complex geopolitical and economic context, the house is strengthening its fundamentals more than ever: uncompromising quality, creativity at the heart of all development, and vertical integration, a guarantee of preserving unique savoir-faire.” – Axel Dumas, Executive Chairman of Hermès
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