French luxury group Hermès has reported a remarkable 17% increase in revenues in the first three months of 2024, driven by strong demand for its exclusive handbags. The company, known for its iconic Birkin and Kelly bags, surpassed analyst expectations and outperformed its competitors in the luxury sector.
Executive chair Axel Dumas attributed the impressive sales growth to the loyalty of clients worldwide, the strength of the group’s artisanal model, and the desirability of its creations. Despite concerns about weakening demand in the key Chinese market, Hermès maintained double-digit growth across all regions, including a 14% increase in sales in Asia, excluding Japan.
Analysts praised Hermès for its consistent outperformance and reliable performance in the luxury sector. The company’s high-end clientele and demand for key products have helped it defy downturns, even during challenging times such as the strict zero-Covid lockdown measures in China at the end of 2022.
While the luxury industry as a whole has been slowing down, with growth expected to be between 1 to 4% in 2024, Hermès is expected to lead the pack with double-digit revenue and earnings growth. The company’s leather goods, ready-to-wear, jewellery, and homewares divisions all experienced double-digit growth, with watch sales being the only weak point.
Shares in Hermès have seen a significant increase in the year to date, with a market capitalization of about €248bn. Despite a slight dip in morning trading on Thursday, Hermès remains a strong contender in the luxury market, outperforming its peers such as LVMH, Richemont, and Kering.