One look at Hermès’s 2024 results will make you wonder if it operates in a different sector.
The Birkin maker has had a market-defying growth stream at a time when many of its luxury peers are languishing. Only recently has Hermès shown signs of improvement, although it might still be too early to read the tea leaves.
Hermès reported a 15% increase in 2024 revenues to €15.2 billion ($15.9 billion) in constant currency. Sales in the last three months of the year rose 18%, pushing past analyst estimates of 10% thanks to strong demand from Japan and tourists in Europe.
“In 2024, in a more uncertain economic and geopolitical context, the solid performance of the results attests to the strength of the Hermès model and the agility of the house’s teams,” said executive chairman Axel Dumas.
The company’s leather goods business was strongest, while its ready-to-wear accessories followed closely.
When asked during Hermès’s earnings call Friday about its track record of positive results, Dumas said that he “has no explanation other than the fact that we do our work well, do it with authenticity.”
“We don’t do marketing … I also believe it’s not the success of Hermès, but the world came to us,” he said, per a live English translation.
Hermès shares were up 1.24% as of 11 a.m. London time.
The French company, which dates back to 1837 when its founder, Thierry Hermès, set up a harness workshop, has managed to buck a luxury slowdown that affected most of its rivals. When they were losing business around the world—particularly in Asia—the appetite for lavish Hermès bags and accessories remained strong.
Along the way, the elite bag maker has contended with dupes and macroeconomic volatility, and has continued increasing prices over the years. But it has ultimately emerged successful.
“Some people want to do a bit like Hermès, but it doesn’t work out at the end of the day,” Dumas said during the call.
As the company handcrafts its bags, they often take longer to make, creating a scarcity that, in turn, makes its products more alluring to high-end shoppers. Unlike conglomerates such as LVMH, the company only makes and sells its brand goods and relies on value over the volume of its products.
Other companies have also come to rely heavily on business from China, which was booming amid pandemic-time lockdowns but hasn’t recovered as hoped. That’s led other markets—like the States—to shine, thanks to robust consumer demand.
British label Burberry, which offers more affordable luxury goods, reported better-than-expected sales after a prolonged slump, with help from stronger American spending.
Cartier owner Richemont also delivered higher results than forecasted, injecting optimism into the luxury sector that was starved of good news from its most prominent players. LVMH, considered the luxury bellwether, also beat analyst expectations for annual sales but remained flat, casting doubt on whether the sector’s upturn has legs.
Some smaller players made a big splash with their results, such as ski-jacket maker Moncler and Italian apparel brand Brunello Cucinelli, both of which experienced sizable growth in 2024. Unlike some other brands, they witnessed a recovery in China.
And as of today, Hermès “joins the elite club of those smashing 4Q24 forecasts,” Bernstein SG analyst Luca Solca said in a note.
When Hermès’s Dumas was asked about his forecast for the first few months of 2025, he said it would be hard to predict how various trends unfold quarter by quarter.
“The overall trend of demand and desirability are there and seem to be very similar to previous years,” he said, hinting that he expects Hermès’s growth to continue at the same pace.
