Hermès posts 28 percent Q2 sales growth

The Hermès Group’s consolidated revenue in the first half of 2023 amounted to 6,698 million euros, up 25 percent at constant exchange rates and 22 percent at current exchange rates.

In the second quarter, the company said, sales reached 3,317 million euros, increasing by 28 percent at constant exchange rates and by 22 percent at current exchange rates, with a strong momentum across all business lines and all regions.

Commenting on the company’s trading results, Axel Dumas, executive chairman of Hermès, said in a release: “The 2023 first half results reflect the strength of the pillars of the artisanal model of the house: quality of materials, exceptional know-how and abundant creativity. To support this growth, we continue to invest in our production capacities, in the expansion of our network, while accelerating job creation and training in all of the group’s métiers.”

Hermès improves profitability in Q2 and H1

Recurring operating income reached 2,947 million euros, 44 percent of sales and net income reached 2,226 million euros, 33 percent of sales.

Recurring operating income increased by 28 percent to 2,947 million euros, while operating profitability reached 44 percent. Consolidated net profit amounted to 2,226 million euros, 33 percent of sales, an increase of 36 percent.

In the medium-term, despite the economic, geopolitical and monetary uncertainties around the world, the group confirms a goal for revenue growth at constant exchange rates.

At the end of June 2023, the company added, all the regions posted strong growth of 20 percent or above, with an exceptional growth in Asia, supported by a favourable comparison basis in the 2nd quarter. Sales increased significantly both in group stores, up 25 percent at constant exchange rates and in wholesale activities, up 26 percent, which benefited from the rebound in travel retail. Asia excluding Japan increased 28 percent driven by Greater China, Singapore, Thailand, Australia and Korea. The Peninsula store, the house’s first address in Beijing in 1997, reopened in April after renovation and extension.

Sales in Japan increased 26 percent, due to its local clients. The Fukuoka Hakata Hankyu store reopened in May after renovation. Sales in the Americas were up 20 percent in the second quarter. In the United States, a new store opened in Aspen, Colorado, in June, after the one in Naples in the Gulf of Mexico in February.

Sales in Europe excluding France were up 22 percent and France increased 24 percent. The store in Hamburg reopened in April after being renovated and extended.

Hermès posts sales growth across business lines

The company’s leather goods and saddlery reported 21 percent growth. Two new leather goods production workshops were inaugurated in Louviers (Normandy) in April and in la Sormonne (Ardennes) in May.

The leather goods and glove-making workshop in Saint-Junien has been relocated to a new, larger site by the Vienne river. Four new leather goods production sites will be rolled out the next four years, in Riom (Puy-de-Dôme) in 2024, L’Isle-d’Espagnac (Charente) in 2025, Loupes (Gironde) in 2026 and Charleville-Mézières (Ardennes) scheduled for 2027.

The ready-to-wear and accessories division increased sales by 35 percent, while the silk and textiles business line sales rose 22 percent, supported by the expansion of production capacities at the Pierre-Bénite site near Lyon, inaugurated in July. Perfume and beauty sales were up 10 percent. The watches business line sales increased 24 percent.

The other Hermès business lines increased revenue by 32 percent.