By
Bloomberg
Published
Apr 25, 2024
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.
Sales at constant exchange rates jumped 17% to €3.8 billion ($4.1 billion) in the first quarter, Hermes International SCA said Thursday. This was more than analysts expected.
Hermes typically caters to the most affluent customers which makes it more resilient in a challenging luxury goods market. Its fortunes contrast with the challenges at Kering SA, which is seeking to turn around its biggest brand Gucci — efforts that are taking time to bear fruit.
Hermes’ revenue in its key Asia Pacific market, excluding Japan, jumped 14% to €1.92 billion in the period, while its crucial leather goods and saddlery division grew by 20%, both better than estimates.
Hermes saw softer traffic in Greater China in March after the Chinese New Year with a “slight erosion” of customers buying more affordable products such as its silk scarves. But that was compensated by shoppers splurging on its more expensive leather, ready-to-wear and jewelry goods, Chief Financial Officer Eric du Halgouet told reporters on a call.
Hermes’ perfume and beauty and silk divisions grew by 4.3% and 7.9% respectively during the quarter.
Shares in Hermes have gained 23% so far this year in Paris, beating LVMH Moet Hennessy Louis Vuitton SE’s 9% rise and a slide of 18% at Kering.