Hermes Sales Growth Gains Pace as Hopes of Luxury Rebound Mount — Update

By Andrea Figueras

Sales at French luxury-fashion house Hermes continued to grow in the third quarter, reflecting resilient appetite for the highest end of luxury goods.

The maker of Birkin bags on Wednesday posted quarterly sales of 3.88 billion euros ($4.50 billion), up 9.6% from a year earlier at constant exchange rates and marking an acceleration from 9% growth in the second quarter. Analysts polled by Visible Alpha had forecast 3.90 billion euros in sales.

Higher sales at Hermes, albeit slightly below analysts' expectations, come a week after French rival LVMH, the owner of Louis Vuitton, reported better sales trends, raising hopes of a rebound in the luxury-goods industry after a protracted downturn in demand for high-end fashion and accessories.

Hermes is the third luxury company to deliver an improvement in sales during this reporting season, Citi analysts Thomas Chauvet and Alberto Cecchetto wrote in a note to clients, adding this could be a potential inflection point for the industry.

While Hermes's 9.6% sales uptick was ahead of analysts' views, Deutsche Bank said investor expectations seemed to be higher following LVMH's upbeat print. Hermes shares in Paris slid 4.4% in European morning trading.

It is now the third quarter in a row that Hermes has delivered single-digit growth at constant rates and during which revenue comes "only in line with market expectations," Morgan Stanley analysts wrote in a research note. The company used to beat expectations quite consistently in the past few years, they added.

Following positive trends in early October and a good performance in China during the Golden Week national holiday, Hermes remains confident for the rest of the year, despite an expected tougher comparison base in the final quarter, the company's executive vice-president of finance, Eric du Halgouet, said during an earnings call.

The executive said he doesn't expect a big change in trends in China, a key market for upscale labels where demand for luxuries has tightened recently due to the country's economic upheaval. However, he noted there are encouraging signs, including more stability in the real-estate market and a pickup of financial markets.

Amid a global slowdown that ended a postpandemic boom in spending on luxury across much of the globe, Hermes has largely kept its head above the turmoil. Its products continue to attract the wealthiest buyers, who have the means to weather a difficult macroeconomic backdrop.

The company has recently shaken up its creative direction, joining peers like Kering's Gucci, LVMH's Dior and Chanel, with the aim of drawing consumers back to boutiques with new designs.

On Tuesday, Hermes appointed Grace Wales Bonner as its new creative director of men's ready-to-wear collections, replacing veteran designer Veronique Nichanian. Wales Bonner will present her first collection in January 2027.

In the medium term, Hermes continues to target sales growth at constant exchange rates, but acknowledged that the current global environment is marked by economic, geopolitical and monetary uncertainties.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

October 22, 2025 05:43 ET (09:43 GMT)