On July 25th local time, after the market closed, the French luxury group Hermès, headquartered in Paris, released its performance for the first half and second quarter of 2024, ending on June 30th: sales for the first half of the year increased by 12% year-on-year to 7.5 billion euros (15% at constant exchange rates), with double-digit growth in sales in almost all geographical regions; recurring operating profit was 3.1 billion euros, with a recurring operating margin of 42%, and net profit reached 2.4 billion euros, with a net profit margin of 32%.
In the second quarter, Hermès’ sales reached 3.7 billion euros, an increase of 13% at constant exchange rates. Hermès stated that despite the more challenging macroeconomic environment, all regions, except Asia affected by the foot traffic in the Greater China region, continued to show strong growth momentum. This growth is attributed to the brand loyalty of customers worldwide.
Despite a decline in foot traffic in the Greater China region after the Chinese Lunar New Year in the first quarter, Hermès’ value strategy continued to support operations. In June, Hermès reopened its expanded store in Lee Gardens, Hong Kong, and in May, it reopened its renovated store in Beijing SKP. Earlier in April, the Jio World Plaza store in Mumbai opened, marking Hermès’ third store in India.
Regarding these results, Hermès Executive Chairman Axel Dumas stated, “The solid first-half results, in a more complex economic and geopolitical context, reflect the strength of Hermès’ model. The group is confident in the future and is continuing to invest, to pursue its vertical integration projects and to create new jobs, while remaining true to its values.”
As of 10 a.m. on July 26, Hermès’ stock price had risen 4.3% to 2093 euros per share compared to the previous trading day, with a latest market value of 217 billion euros. Over the past 12 months, Hermès’ stock price has risen by 9.2%.
— By Region —
At the end of June 2024, all the geographical areas posted solid growth, despite a particularly high comparison basis in the second quarter in Asia. The exclusive distribution network continued to develop, with store openings and expansions.
- Asia excluding Japan (+10%) posted growth in all the countries of the region. As a reminder, performance in the second quarter of 2023 was exceptional, following the lifting of health measures in China. The house’s value strategy supported activity, despite a downturn in traffic in Greater China observed after the Chinese New Year in the first quarter. In June, the Lee Gardens store in Hong Kong reopened after expansion, after the reopening in May of the renovated Beijing SKP store in China. In April, the Mumbai Jio World Plaza store opened its doors, the house’s third address in India.
- Japan (+22%) continued its strong growth, thanks to its local clients. A new store was inaugurated in the Ginza district of Tokyo in June, following the Azabudai Hills store in February.
- The Americas (+13%) confirmed their sustained growth, thanks to the continued solid momentum in the United States. A new store was inaugurated in Princeton, New Jersey, in April. The second chapter of the women’s fall-winter 2024 collection was unveiled in June in New York with the Manhattan Rocabar event.
- Sales in Europe excluding France (+18%) and France (+15%) were particularly robust, thanks to the loyalty of local customers and dynamic tourist flows. In France, the Nantes store reopened in June after being renovated and expanded.
— By Business Segment —
At the end of June 2024, the métiers showed solid growth, despite a more complex context.
The Leather Goods and Saddlery métier (+19%) posted a remarkable performance, thanks to the increase in production capacities and particularly sustained demand. The collections have been enriched with new formats, including the Della Cavalleria Élan and the Kelly Mini clouté models in particular. The travel universe unfolds around an R.M.S. Cargo suitcase and weekend bags.
The increase in production capacities continues with the opening of the Riom (Puy-deDôme) leather goods production site in September 2024 and the laying of the first stone for two new leather goods production sites: Isle-d’Espagnac (Charente) in April and Loupes (Gironde) in May, which will open in 2025 and 2026 respectively. They will reinforce the nine centres of expertise located across the national territory. Hermès is developing employment and training and continues to strengthen its anchoring in France.
The Ready-to-wear and Accessories sector (+15%) pursued its strong momentum. The men’s spring-summer 2025 fashion show held at Palais d’Iéna in June was very well received. The shoes and fashion accessories displayed designs combining the house’s extensive expertise with boundless creativity.
The Silk and Textiles sector (+1%) posted growth despite a high comparison basis in the second quarter, thanks to the diversity of creations, materials and formats in both the women’s and men’s collections.
The Perfume and Beauty sector (+5%) continued its development. The new creation Oud Alezan joined the Hermessence collection in February, and the H24 men’s line was enriched with Herbes Vives in April, two refillable creations. In June, the Bain Hermès celebrated 10 years with the renewal of the whole collection, Cologne and Parfum-Jardin, around a sustainable range now made of glass.
The Watches métier was stable and successfully unveiled at the Geneva Watches & Wonders exhibition held in mid-April Hermès Cut, a new line with a sporty spirit featuring a manufacture movement.
The Other Hermès sectors (+19%) which include Jewellery and the Home universe, pursued their strong growth, illustrating the singularity and creativity of the house, in particular with the launch of the eighth Haute Bijouterie collection Les formes de la couleur in June, at the Musée des Arts Décoratifs in Paris. The Home universe collections, presented at the Milan Design Week, were very well received, highlighting the singularity of the exceptional savoir-faire of the house.
— ESG Updates —
In line with its commitments as a responsible employer, the Hermès group continued its creation of jobs and increased its workforce by 1,205 people in the first half, including close to 600 in France. At the end of June 2024, the Group employed 23,242 people, including 14,320 in France. The House paid in February a bonus of €4,000 to all its employees worldwide in respect of 2023, consistent with its policy of sharing the fruits of growth with all those who contribute to it on a daily basis.
In line with its ambitions to promote diversity, Hermès is pursuing its commitment to the inclusion of people with disabilities: the direct employment rate reached 7.12% in France since 2023, doubling in five years.
In July 2024, employees acquired the remaining 12 shares under the July 2019 free share plan. As a reminder, a new free share plan for all employees was announced in June 2023.
Hermès continued to take concrete actions and initiatives in response to climate change and is pursuing its work to preserve natural resources. After identifying its priorities on its direct operations and across the value chain, the group has launched the third step of the Science Based Targets for Nature (SBTN) process, to set scientific targets for nature, in particular for biodiversity, fresh water, forests and soils.
The sustainable and responsible dimension of the house’s artisanal model was rewarded in July with the “Grand Prix toutes categories” Transparency Award, and by a 5-point improvement in Moody’s ESG rating. These results bear witness to the commitments and values of the house.
Appendix: Key Financial Data of Hermès for the First Half of 2024
｜Source: Hermès official website and financial reports, previous Luxe.CO reports
｜Image Credit: Hermès official website
｜Editor: Wang Jiaqi
