Luxury brand Hermes saw a significant increase in sales in the second quarter, with sales of platinum bags rising by 13.3%, surpassing expectations. Contrary to competitors struggling to resist the slowdown in luxury demand, this top brand has surged with the help of a loyal and wealthy customer base.
Hermes International SCA announced on Thursday (July 25) that revenue for the second quarter increased by 13.3% at constant exchange rates, higher than analysts’ expectations of 11.5%. The first-half recurring operating income was 3.15 billion euros (3.42 billion US dollars), slightly below expectations.
The report stated that apart from China, Hermes achieved double-digit revenue growth in all regions worldwide.
Since the beginning of this year, Hermes’ stock price has risen by around 5%. The company’s performance is considered more predictable than other luxury brands because of the long waiting lists for its most popular products, like the Kelly and platinum bags, which start at around $10,000.
Axel Dumas, the CEO of Hermes, told Bloomberg that there have been no significant changes in the company’s sales trends up to the second quarter.
Before Hermes announced its earnings, the performances of LVMH Group (including brands such as Dior and Tiffany) and Kering SA Group (including Gucci) were disappointing.
LVMH reported on Tuesday (23rd) that internal sales in the Asian market for the second quarter (excluding Japan but including China) experienced a significant decline, while other regions including the United States, Japan, and Europe saw growth.
Overall, a Bloomberg analysis revealed that affluent consumers in most parts of the world are also restraining their expenditures this week, except for Japan. Many Chinese tourists visiting Japan are taking advantage of the depreciation of the yen to buy high-end products in Japan.
LVMH also mentioned that Chinese luxury shoppers are shifting some of their luxury spending to overseas markets, boosting sales in Japan and Europe.