Sales at Hermès surged past $1.43 billion over the three months ending in March, pushed by what the luxurious label called “an outstanding performance in Asia and Japan.” That helped offset declines in Europe, where pandemic restrictions and the loss of international tourists continue to bite.
At constant exchange rates, Asia (excluding Japan) grew 94 percent, fueled by “highly dynamic activity in Greater China,” thanks to events such as Fast Forward Men, organized in Shanghai in March. Last year, the place accounted for 46 percent of total revenue. But this quarter, that share climbed sharply to 54 percent.
Conversely, Europe’s 4.4-percent contraction during this period reduced its influence. From a sales share of 25 percent in 2020, it fell to suitable 18.3 percent, while the Americas, which returned to advise in the three months to March, held steady at 14 percent.
Total first-quarter revenue hit $1.49 billion, up by 44 percent at constant exchange rates and +38 percent at fresh rates. Sales advise in the group’s stores, where the latest unit opened last week in Galaxy Macau, was even larger at 51 percent, compared to 2020, and up 41 percent versus the first quarter of 2019. Nevertheless, the brand’s wholesale activity took a 2-percent hit as a consequence of the negative impact of travel retail.
Hermès’ Q1 advise compares very favorably with luxurious leaders Kering and LVMH, which recorded jumps at constant exchange rates of 26 percent and 30 percent, respectively, over the period.
The numbers did not disappoint investors, with shares rising by 2.5 percent in trading on Thursday morning. In a statement, Axel Dumas, executive chairman of Hermès, said, “In a calm unstable context, our solid advise confirms the robustness of our sustainable artisanal mannequin and the desirability of our collections.”
All business is back in advise mode
Each of the French house’s product segments saw double-digit advise, led by watches where sales almost doubled. The mainstay leather goods and saddlery division was up 34 percent, generating sales suitable below $706 million, while the 2d-largest division, ready-to-wear/accessories, grew by 51% percent.
Solid deliveries from the halt of last year had been one reason for the large uptick. As an expert storyteller, Hermès (ranked sixth on Jing Daily’s China Global Luxurious Index) has also increased its French production capacity by opening internet pages in Guyenne and Montereau this year, underscoring its craft credentials. More facilities are scheduled for Louviers in 2022, Ardennes in 2023, and another production space in Auvergne in 2024.
Hermès has dubbed 2021 the year of The Odyssey, exploring the house’s stagger along a road of uncertainties as the pandemic continues to rage on.
Looking ahead, the company may calm count even more on its highly integrated craftsmanship mannequin as a differentiator that will help it retain customer loyalty. Nevertheless, the house did not provide any forecasts except to say it had “an ambitious goal for revenue advise.”
