French luxury fashion house Hermès has defied market trends with better-than-expected 2024 financial results, posting double-digit growth across key markets despite a challenging global economy.
The Paris-based brand reported €15.2 billion in consolidated revenue, marking a 15% increase at constant exchange rates compared to 2023. The strongest gains came from Europe and the Americas, although all regions contributed to growth.
Following the announcement on Friday, Hermès’ stock price climbed 0.85%, further boosting its market capitalization to approximately $300.1 billion, edging closer to rival LVMH at $357.6 billion.
Solid Financial Performance Across All Metrics
Hermès’ fourth-quarter sales reached €4 billion, an 18% jump at both current and constant exchange rates. Other key financial highlights included:
- Recurring operating income: €6.2 billion
- Net profit (group share): €4.6 billion
- Adjusted free cash flow: €3.8 billion (18% rise from 2023)
Additionally, the company expanded its workforce, hiring 2,300 new employees worldwide, including 1,300 in France.
Luxury Sector Surges on Hermès’ Strong Earnings
The better-than-expected results sent positive ripples through the luxury sector, lifting shares of competitors like LVMH, Burberry, and Richemont.
Investment director Russ Mould of AJ Bell noted that Japan was a key growth driver, where Hermès’ strong brand loyalty helped offset broader economic uncertainties.
Regional Growth Breakdown
- Europe (excluding France): Sales climbed 19%, with France itself up 13%, fueled by loyal local consumers and a rebound in tourism.
- Americas: Up 15%, boosted by renovated store openings in Atlanta and a new location in Princeton, New Jersey.
- Asia (excluding Japan): Grew 7% for the year, with fourth-quarter sales up 9%, despite a dip in Chinese consumer traffic after Q1 2024.
- Japan: A standout performer, with a 23% increase in annual sales.
Category-Wise Performance
- Leather Goods & Saddlery: Up 18%, thanks to rising production capacity and robust demand.
- Ready-to-Wear & Accessories: Gained 15%, driven by popular clothing and shoe collections.
- Silk & Textiles: Increased 4%, reflecting steady performance in both men’s and women’s lines.
- Perfume & Beauty: Jumped 9%, helped by the launch of Barénia, the brand’s latest women’s fragrance.
CEO’s Statement & Future Outlook
In the 2024 earnings report, executive chairman Axel Dumas credited Hermès’ resilience and craftsmanship for the strong performance, stating:
“Despite an uncertain economic and geopolitical landscape, Hermès continues to thrive thanks to our unique model, talented teams, and unwavering commitment to quality, creativity, and savoir-faire.”
As Hermès expands its global footprint, recent store openings in Lille, Naples, and Singapore signal the company’s ongoing confidence in the luxury market, even amid economic headwinds.
