VIENNA, AUSTRIA – MARCH 11: A Hermès white leather-based Kelly bag worn with a Hermès inexperienced colourful Twilly ribbon, on March 11, 2023 in Vienna, Austria.
Jeremy Moeller | Getty Photographs Leisure | Getty Photographs
Gross sales at Birkin bag maker Hermes rose 23% within the first quarter, above market expectations, as rich customers in China and Europe splurged on luxurious style and equipment regardless of greater costs and world market turmoil.
Gross sales for the three months ending in March got here to three.38 billion euros ($3.74 billion). The rise of 23%, at fixed trade charges, beat a Seen Alpha consensus for 15% progress.
Hermes finance chief Eric du Halgouet informed journalists retailer site visitors in the USA, the place rival LVMH earlier this week flagged softer demand for style, leather-based items and jewelry, continued to rise.
“What we’re seeing in the USA is globally a rise in (retailer) site visitors, the tendencies we have seen in April stay favorable, with, once more, very dynamic site visitors,” he mentioned.
“We clearly stay vigilant so far as macro tendencies are involved … however we’ve not seen a slowdown up to now.”
Bernstein analyst Luca Solca mentioned sturdy U.S. progress for the group, which posted a 19% enhance in gross sales within the Americas area in comparison with 8% U.S. progress for LVMH, was significantly noteworthy.
“It confirms Hermes’s superior capacity to plough by adversarial demand tendencies, leveraging its excessive model desirability and ready lists for iconic merchandise,” he mentioned.
“Larger finish publicity to richer shoppers might be additionally serving to.”
Hermes raised costs by round 7% in the beginning of the yr, a better charge than its ordinary 2-3% annual enhance.
In China, the place Hermes was much less affected than opponents by lockdowns that dented gross sales for a lot of on the finish of final yr, revenues grew by 23% within the quarter. The Asia area excluding Japan generates practically half of annual gross sales on the group.
Du Halgouet mentioned vacationer flows from mainland China had resumed to Hong Kong and Macau, boosting enterprise there, in addition to Singapore and Australia, and anticipated Chinese language customers to return slowly to Europe in the direction of the top of the yr.
Stringent COVID lockdowns dampened luxurious demand in China final yr, when the market declined 10%, ending a five-year progress streak that noticed the market double between 2019 and 2021, based on consultancy Bain.