Birkin bag maker Hermes sees no U.S. slowdown as sales jump 23%
VIENNA, AUSTRIA – MARCH 11: A Hermès white leather-based Kelly bag worn with a Hermès inexperienced colourful Twilly ribbon, on March 11, 2023 in Vienna, Austria.
Jeremy Moeller | Getty Photos Leisure | Getty Photos
Gross sales at Birkin bag maker Hermes rose 23% within the first quarter, above market expectations, as rich buyers in China and Europe splurged on luxurious vogue and equipment regardless of larger costs and international market turmoil.
Gross sales for the three months ending in March got here to three.38 billion euros ($3.74 billion). The rise of 23%, at fixed change charges, beat a Seen Alpha consensus for 15% development.
Hermes finance chief Eric du Halgouet advised journalists retailer site visitors in the USA, the place rival LVMH earlier this week flagged softer demand for vogue, leather-based items and jewelry, continued to rise.
“What we’re seeing in the USA is globally a rise in (retailer) site visitors, the tendencies we have seen in April stay favorable, with, once more, very dynamic site visitors,” he stated.
“We clearly stay vigilant so far as macro tendencies are involved … however we’ve not seen a slowdown to this point.”
Bernstein analyst Luca Solca stated sturdy U.S. development for the group, which posted a 19% enhance in gross sales within the Americas area in comparison with 8% U.S. development for LVMH, was significantly noteworthy.
“It confirms Hermes’s superior potential to plough by antagonistic demand tendencies, leveraging its excessive model desirability and ready lists for iconic merchandise,” he stated.
“Greater finish publicity to richer customers might be additionally serving to.”
Hermes raised costs by round 7% at the beginning of the yr, the next charge than its regular 2-3% annual enhance.
In China, the place Hermes was much less affected than rivals by lockdowns that dented gross sales for a lot of on the finish of final yr, revenues grew by 23% within the quarter. The Asia area excluding Japan generates almost half of annual gross sales on the group.
Du Halgouet stated vacationer flows from mainland China had resumed to Hong Kong and Macau, boosting enterprise there, in addition to Singapore and Australia, and anticipated Chinese language buyers to return slowly to Europe in direction of the top of the yr.
Stringent COVID lockdowns dampened luxurious demand in China final yr, when the market declined 10%, ending a five-year development streak that noticed the market double between 2019 and 2021, in accordance with consultancy Bain.