On Tuesday, Hermes reported a solid 15.6% sales growth in Q3, surpassing analyst expectations.
Hermès shares are up 1.30% and were trading at €1,719 at the time of writing.
Hermès consolidated revenue at the end of September totalled €10,063 million. Sales were up 22% at constant exchange rates compared to the same time last year. At the constant exchange rates, sales were up 17%.
According to the Executive Chairman of Hermès, Alex Dumas, “The solid performance in the third quarter reflects the desirability of our collections all over the world, with still a sustained momentum in Asia and in the Americas. More than ever, in an uncertain global environment, we are reinforcing our investments and our teams to support growth.”
After Hermès raised prices by 7% this year, sales in Europe were up 20% in Q3 (+22% in France).
According to analysts, this success in the face of an unstable economic and geopolitical climate is largely driven by brand loyalty and the so-far timeless value of the iconic Hermès Birkin bags, the value of which can go up to €200,000.
According to Steve Clayton, head of equity funds at Hargreaves Lansdown, “it all shows the value of brands positioned at the very top end of their segments. Buyers who want a Birkin handbag have to join waiting lists, making Hermes’ revenues highly predictable. It also helps that Hermes has been less reliant on Asian and Chinese demand. Their growth this quarter has come from customers in the US and Europe, suggesting that right now, at least, old money is more dependable than new.”