Citing strong growth “despite a still uncertain context,” Hermès reported revenue of €2.77 billion ($3.06 billion) for the first quarter of 2022, up 27 percent compared to the same quarter last year. The Birkin bag-maker saw double-digit sales increases in all divisions during the first three months of the year, with its Leather Goods and Saddlery division – which generates almost half of its total revenues – up 16 percent thanks to an “increase in production capacity and sustained demand.” Ready-To-Wear and Accessories sales grew by 44 percent, Silk and Textiles was up by 27 percent, the brand’s growing Perfume and Beauty group saw growth of 18 percent in Q1, and Watch sales were up (+62 percent), “reflecting the technical watch-making expertise and creativity of the collections.”
Geographically speaking, Hermès’ growth for the quarter was led by sales in the United States and Europe (excluding France), with sales in both markets up by 44 percent. In Europe, the United Kingdom, Germany, Italy and Spain led the growth, while France saw a 40 percent jump in sales. Sales in Asia (excluding Japan) grew by 20 percent, per Hermès, which said that it benefitted from a very strong Chinese New Year before widespread COVID lockdowns, including “some store closures,” took effect in mid-March. And finally, sales in Japan were up by 17 percent for Q1, with Hermès pointing to “the loyalty of local customers and the success of the collections.”
Reflecting on Russia in a corresponding conference call on Thursday, Hermès’ management revealed that its three stores remain closed and that it has cease all imports, including perfumes and beauty, to the country. The status of a planned store opening in St. Petersburg in June in “uncertain.” In terms of its 65 employees in Russia, Hermès’ Executive Vice President for Finance Eric du Halgouet confirmed that the company has continued to pay them, while also “providing training and psychological support,” per Reuters.
With its growth driven largely by brick-and-mortar store sales in the U.S. and Europe, Hermès revealed that revenue from in-store was were up by 28 percent on a year-over-year basis, as it continues to develop its retail footprint by way of “store openings and extensions, and the strengthening of online sales worldwide.”
As for output, the group is aiming to increase leather goods output volume by 6 to 7 percent in 2022, with a price increase of 3.5 percent across the geographical regions in play as of early this year, which comes as a result of an increase in cost of goods sold, and increases to come in 2023. The opening of two new leather goods production workshops in 2025 and 2026, which will eventually employ 500 craftsmen, in addition to the three sites under construction in Louviers (Eure) in 2022, La Sormonne (Ardennes) in 2023 and Riom (Puy-de-Dôme) by 2024, will support such increased output targets.
“The strong growth in sales at the beginning of this year reflects the desirability of our collections and the confidence of our customers in our artisanal and responsible approach,” Hermès executive chairman Axel Dumas said on Thursday, “Despite a still uncertain context, the group is accelerating its strategic investments, recruitments and training to support the growth of all the métiers of the house.”
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