Hermes sales jump as China, US shoppers snap up Kelly bags

BLOOMBERG

Hermes International’s quarterly sales jumped as Chinese shoppers snapped up its pricey scarves and Kelly handbags, fueling optimism the global luxury industry’s top performers will carry on growing despite economic headwinds.
Revenue climbed 23% in the first three months of the year at constant exchange rates, Paris-based Hermes said, exceeding analysts’ estimates. The shares rose as much as 2% in early trading, and have gained more than a third in 2023.
“After a very good fourth quarter, we had robust traffic, even slightly higher in early 2023” in China, Chief Financial Officer Eric du Halgouet told reporters. Sales during the Chinese New Year were “very good,” the company said.
The results come after LVMH, the world’s largest luxury conglomerate, posted a double-digit sales increase, buoyed by the return of Chinese customers following the end of Covid restrictions.
The persistent strength of LVMH and Hermes have made them darlings of investors at a time when even big technology companies have seen growth slow.
That’s made LVMH Europe’s most valuable company and its Chairman Bernard Arnault the world’s richest person, according to the Bloomberg Billionaires Index. Hermes’ valuation crossed the symbolic threshold of €200 billion ($221 billion) for the first time recently.
Whether weaker luxury players such as Gucci-owner Kering SA will benefit as strongly as Hermes and LVMH from a resurgent Chinese shopper remains to be seen, analysts said.
Hermes’ sales for Asia Pacific excluding Japan were up 22.5% for the first three months of the year. The luxury label known for its silk carre scarves also saw 19% growth in the Americas.
Du Halgouet said trends so far this month for both China and the US look similar to the first-quarter performance, adding that Hermes is seeing a “nice dynamic” in China while the brand hasn’t seen a slowdown in the US so far.