Hermès booms globally, reports “outstanding sales” for 2023 and Q4

Ultra-luxury specialist Hermès was upbeat on Friday as it released what it said were “outstanding sales and results” for 2023 as a whole and for the fourth quarter.

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The company reported revenue up 16% to €13.4 billion for the year and up an even better 21% constant exchange rates (CER). Recurring operating income jumped 20% to €5.7 billion (+20%) and net profit surged 28% to €4.3 billion.

Meanwhile, Q4 sales rose 13% to €3.364 billion, up 18% CER, “despite the particularly high comparison base in America and in Asia”. 

And Executive Chairman Axel Dumas highlighted that the label once again “cultivated its singularity and achieved an outstanding performance in all métiers and across all regions against a high base. These solid results reflect the strong desirability of our collections and the commitment and talent of the house’s women and men”.

Looking at individual regions as of the end of December, they all “posted a solid performance with homogeneous growth of around 20%”. 

Sales increased both in the group’s stores (+20%), which “benefitted from a strong demand and the reinforcement of the exclusive distribution network”, and in wholesale (+24%). The latter was driven by the travel retail business. 

Asia, excluding Japan, was up 19% with “significant increases” in sales in all the countries of the region. It was helped by more selling space. For instance, there was the opening in October of a second store in Chengdu, the capital city of the province of Sichuan, which was the house’s 33rd location in Mainland China, following the opening of a store in Tianjin in July. And in Korea, the store at the Shilla Hotel in Seoul reopened in December after a revamp. 

Japan sales rose 26%, although the company referred to this stellar rise merely as “a steady and sustained increase in sales”. Again, selling space growth was a factor. The Daimaru Sapporo store on Hokkaido island and the Takashimaya store in the centre of Kyoto debuted in October and November, after renovation and expansion.

In America, the 21% rise was boosted by particular strength in the second half. Here too, store investments made an impact with Chicago store launched at the end of October, and the Bellagio store reopening in Las Vegas in December, following openings in Naples on the Gulf of Mexico in February, Aspen in June and Los Angeles Topanga in July. 

And while Europe has been a tough market for some luxury businesses in recent periods, it wasn’t for Hermès. The company saw sales up 20% in France and the same amount in the rest of Europe.

It said the “robust growth” was down to “the loyalty of local clients and to the dynamic of tourists flows”. Following renovation, the Crans-Montana store in Switzerland reopened in December, after the store located in the historic centre of Bordeaux in November and the Vienna store in Austria in September. 

The group also said that “all the métiers confirmed their solid momentum, with Ready-to-wear and Accessories, Watches and Other Hermès Sectors achieving a “remarkable increase”. 

Leather Goods and Saddlery métiers, up 17%, were boosted by the Maximors bag, Della Cavalleria Élan and Arçon bags.

Ready-to-wear and Accessories sector was up an even stronger 28%, thanks to the success of the RTW and footwear collections. 

The men’s and women’s SS24 collections “were very well received when they were presented at fashion shows in June and September, respectively”, we’re told. 

The Silk and Textiles sector was solid with a 16% increase, while Perfume and Beauty on a 12% rise benefitted both from existing products and new launches. 

Finally, Watches “confirmed its splendid performance” with a 23% jump and Other Hermès sectors leapt 26%, with jewellery and homewares both doing well.

So for the outlook for this year, the company said that in the medium term, “despite the economic, geopolitical, and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates”.