Hermès first quarter 2019 : Soaring sales boosted by Chinese market

Hermès first quarter 2019 financial results have recently been published and they are very promising.

First and foremost, Hermès is a renowned luxury brand worldwide with flagship products such as the Birkin and the Kelly handbags.

However, it had humble beginnings as it first started as a harness workshop founded by Thierry Hermès in 1837. The brand’s first workshop was located in the Grands Boulevards quarter of Paris and sold high-quality wrought harnesses and bridles.

It goes without saying that the brand has since seen phenomenal growth both in financial aspects and in the range of products it now offers. In fact, one of Hermès’ biggest strength is adapting to the demand whilst retaining its savoir-faire in the leather and saddlery areas.

Indeed, Hermès first quarter 2019’s financial report shows that sales worldwide have been accelerating at a fast pace. The consolidated revenue amounts to 1.610 million euros – up 16% from last years first quarter !

Axel Dumas, Executive Chairman of Hermès, said:

” Driven by the success of its collections among all its customers, Hermès achieved an acceleration of its sales over the first quarter, which shows the continuation of a dynamic trend, particularly in China. “

Hermès first quarter 2019 : all geographical areas recorded sustained growth

• Asia excluding Japan (+17%) achieved an outstanding performance, with extremely good sales growth driven by mainland China and two-digits growth in all other countries of the area.
• Japan (+10%) posted remarkable growth, despite a high comparison basis.
• America (+10%) pursued its development with the opening of the 35th Hermès store in Orlando in March and the inauguration of a new store in New York’s Meatpacking district early April.
• Europe excluding France (+9.5%) achieved a sound performance, driven particularly by the United Kingdom.

Growth for each business line is remarkable albeit less pronounced for Perfumes and Silk / Textiles

• Leather Goods and Saddlery business line (+12.5%), driven by sustained deliveries at the start of the year and benefitting from a favorable comparison basis.
• The Ready-to-Wear and Accessories division (+13%) confirmed its dynamic activity, driven by the success of the ready-to-wear collections, as well as fashion accessories, particularly shoes.
• The Silk and Textiles business line recorded an increase (+2.5%) with collections that combine diversity of materials with creative design.
• Perfumes (+3%) posted an increase, driven by the success of Terre d’Hermès. See our article about a new line of cosmetics planned for 2020 here. This new line of products should help consolidate Hermès’ position in the cosmetics industry.
• The Watches business line (+22%) recorded a strong performance, reflecting the creativity of the collections and the new women’s watch Galop d’Hermès.
• Other Hermès business lines (+18%) recorded strong development over the quarter, both in Jewellery and in Hermès home products.

These remarkable results were also accompanied by a tremendous growth of the Hermès share on the stock market. Indeed, its price soared from 472,20 euros in January 7th 2018 to 640,60 euros per share at the time of writing this article (July 4th 2019), a 36,6% increase in 6 months!

All these indicators speak volumes for Hermès’ financial well being. Furthermore, its products also keep a high and increasing value over time. The Birkin handbags are a perfect example to illustrate this fact. Their value has risen annually by 14,3% on average since 1980, thanks to a high demand and low supply, making it a far better investment than gold’s 2,1% ! Check out our available Birkin bags here

If you’d like to view the full Hermès first quarter 2019 report, be sure to check it out on the Hermès website here