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Hermes Q3 Revenue Misses Estimates Amid Mixed Performance
23 Oct
Summary
- Hermes Q3 revenue rose 4.3% year-on-year, falling short of analyst expectations.
- Strong demand for leather goods in Americas and Europe offset declines elsewhere.
- The company confirmed its medium-term growth goals despite economic uncertainties.
Hermes announced on Thursday that its third-quarter revenue saw a 4.3% year-on-year increase on a currency-adjusted basis. This growth, however, did not meet the 5.2% expected by analysts, leading to a dip in the company's shares. The positive performance was largely attributed to robust demand for leather goods, its primary division, which experienced a 12.4% revenue increase. This strength helped counteract subdued sales in the Middle East, watches, and ready-to-wear categories.
Geographically, the Americas and Europe demonstrated significant growth, with sales rising by 10.7% and 8.6% respectively. These regions benefited from new store openings and strong demand across various product lines. Japan also saw growth, driven by local customers. Conversely, the Middle East region experienced a 2.8% decline in sales, which the company linked to a challenging geopolitical climate. Asia-Pacific excluding Japan showed stable performance.
Despite the mixed results and global economic uncertainties, Hermes reaffirmed its medium-term revenue growth targets. The company did not provide specific figures but expressed confidence in its strategy. Full-year results are scheduled for release on February 12, 2027. The company's executive chairman, Axel Dumas, noted that Hermes continues to achieve profitable growth even in complex environments.
