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Hermès sales on rising mode

Oct 24, 2022 France
Hermès sales on rising mode
The French-based luxury group reported a sales jump of 30% in the first nine months of 2022, year-over-year, and shows no signs of slowing down. Price hikes are in the pipeline for 2023
As of the end of September, the group's revenue amounted to 8.61 billion euros, reflecting an increase of 30% at current exchange rates and 24% at constant exchange rates, on a comparable basis to the same period of 2021. This result was reinforced by the "very good sales momentum" recorded in the third quarter, in which sales rose by 32.5% at current exchange rates and 24% at constant exchange rates, totalling 3.14 billion euros, as compared with the third quarter of last year.

Sales in the Leather Goods and Saddlery business line grew by 12.5% in the first three quarters of the year, on a comparable basis with the similar period of 2021, led by a "strong rebound in Greater China" during this past quarter "and very sustained demand".

Sales by Geographical Area

(at comparable exchange rates, unless otherwise indicated)

In the first nine months of the current year, all the geographical areas posted strong performances. On a comparable basis with the same period of 2021, sales in Hermès' stores grew by 23%, driven by the reinforcement of its exclusive distribution network and online sales, while wholesale activities increased by 26%, reflecting the resumption of travel retail.

In these nine-months, revenue generated in the Asia excluding Japan region was up by 21.1%, year-over-year, "thanks to an excellent third quarter" (up by 33.7%), in which sales in Greater China picked up despite some temporary closures due to sanitary measures in July and August. In Japan, sales grew by 21.2% in this period, as compared with the same period of the prior year. Sales in Asia as a whole reached, thus, 5.06 billion euros in the first nine months of the year.

Sales in the Americas region grew by 28% as of the 30th of September, continuing "on an upward trend in the third quarter" (up by 18.1%), as compared with the same period of 2021, totalling 1.51 billion euros. "Supported by the loyalty of local customers", sales in Europe excluding France (up by 25%) and France (up by 28%), benefitted "from the recovery in tourist flows, especially in France, the United Kingdom and Italy" contributing with 1.88 billion euros to the total revenue.


Outlook

The luxury group considers that "the impacts of the sanitary, economic and geopolitical context are still difficult to assess", but in the medium-term "confirms an ambitious goal for revenue growth at constant exchange rates".

Concerning 2023, Hermès Executive Vice President of Finance, Eric du Halgouet, announced that the group will most likely increase prices between 5% to 10% due to increased costs and currency movements (businessoffashion.com).


Image Credits: designscene.net

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