VIENNA, AUSTRIA – MARCH 11: A white Hermès leather Kelly bag worn with a colorful Hermès green Twilly ribbon, on March 11, 2023 in Vienna, Austria.
Jeremy Moeller | Getty Images Entertainment | beautiful pictures
Sales at bag maker Birkin Hermes jumped 23% in the first quarter, beating market expectations, as affluent shoppers in China and Europe splurged on far-reaching fashion and accessories slag despite higher prices and global market turmoil.
Revenue for the three months ended March reached 3.38 billion euros ($3.74 billion). The 23% gain, with the exchange rate unchanged, beat the Visible Alpha consensus for 15% growth.
Hermes CFO Eric du Halgouet told journalists store traffic in the United States, where rival LVMH earlier this week showed weaker, continued demand for fashion, leather goods and jewelry. .
“What we’re seeing in the US is an increase in (store) traffic globally, trends that we’ve seen in April remain favorable, with very high traffic,” he said. dynamic”.
“We’re clearly still cautious as far as macro trends are concerned… but so far we haven’t seen a slowdown.”
Bernstein analyst Luca Solca said the group’s strong US growth, with a 19% increase in sales in the Americas region compared to LVMH’s 8% growth in the US, was what particularly notable.
“It affirms Hermes’ unsurpassed ability to weather adverse demand trends, capitalizing on high levels of brand desirability and waiting lists for iconic products,” he said.
“More upscale access to affluent consumers is probably also helping.”
Hermes had increased prices by about 7% at the start of the year, a rate higher than the usual 2-3% annual increase.
In China, where Hermes was less affected than its competitors by lockdowns that slashed sales for many people late last year, revenue jumped 23% in the quarter. The Asia region excluding Japan generates nearly half of the group’s annual revenue.
Du Halgouet said the influx of tourists from mainland China has returned to Hong Kong and Macau, boosting business there, as well as Singapore and Australia, and expects Chinese shoppers to gradually return to Europe later this year.
According to consulting firm Bain, strict COVID-19 lockdowns dented luxury demand in China last year, when the market fell 10%, ending a five-year growth streak when the market doubled from 2019 to 2021.
