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Hermès posts strong sales and profit growth

By Prachi Singh

29 Jul 2022

Business

Image: Hermès boutique at 24 Rue du Faubourg Saint-Honoré in Paris, Stock Photography

The Hermès Group's consolidated revenue amounted to 5,475 million euros in the first half of 2022, up 29 percent at current exchange rates and 23 percent at constant exchange rates compared to the same period in 2021.

The company said in a statement that recurring operating income amounted to 2,304 million euros, 42 percent of sales, while net profit reached 1,641 million euros, 30 percent of sales.

The company added that sales in the second quarter reached 2,710 million euros, up 26 percent at current exchanges rates and 20 percent at constant exchange rates, with a high level of activity in all the business lines.

Commenting on the trading performance, Axel Dumas, executive chairman of Hermès, said: “The very dynamic results over the first six months of the year testify to the growth across our 16 métiers and the strong desirability of our objects, designed by craftsmen with a sustainable approach, without compromising on quality.”

Hermès results by geographical regions

The company further said that over the first half of 2022, all the geographical areas posted strong growth, with strong resilience from Asia despite the sanitary context in China.

Sales in the group's stores, up 23 percent benefitted from the strengthening of the exclusive omnichannel network and online sales. Wholesale activities grew 25 percent, driven by the resumption of travel retail.

Asia excluding Japan posted a 15 percent rise, driven by a high level of activity across the region and by sustained sales in Singapore, Australia and Korea. Greater China bounced back in June after being penalised by sanitary restrictions and store closures in April and May, especially in Shanghai and Beijing. After the reopening of the renovated Pacific Place store in Hong Kong and One Central store in Macao at the beginning of the year, a new store was launched in Zhengzhou at the end of March, in the Henan province in China.

Sales in Japan rose 20 percent. In June, the first edition of the exhibition La Fabrique de la légèreté, based on the year’s theme, was held in Tokyo. America reported a 34 percent increase. In the United States, a new store opened in Austin in April, the third store of the house in Texas. The Hermès in the Making exhibition, presenting the house’s artisanal know-how, was held in Detroit in June.

Europe excluding France rose 34 percent and France posted 41 percent growth due to the loyalty of local clients and the return of tourists, particularly in France, the United Kingdom and Italy.

Hermès business lines report strong sales momentum

At the end of June 2022, Hermès said, all the business lines confirmed their high levels of sales, with a remarkable increase in silk, ready-to-wear and accessories, watches and other Hermès business lines including jewellery and homeware.

The 12 percent growth of the leather goods and saddlery division was driven by sustained demand and the increase in production capacities, in line with the annual objective. The company added that five new workshops are in project for the next five years, with the Louviers (Eure) and Sormonne (Ardennes) sites in 2023 and the Riom (Puy-de-Dôme) site in 2024. The sites in L’Isle-d’Espagnac (Charente) and Loupes (Gironde) have been announced for 2025 and 2026.

The ready-to-wear and accessories division grew 36 percent driven by the success of the ready-to-wear, fashion accessories and footwear collections. The silk and textiles business line achieved 29 percent growth, while the perfume and beauty segment posted 23 percent increase. The watches business line was up 55 percent. The other Hermès business lines posted a 33 percent increase.

HERMES