Hermès has once again demonstrated its resilience and market dominance, reporting revenue of €15.2 billion (nearly $16 billion) for 2024, marking a 15 percent increase at constant exchange rates compared to sales in 2023, and defying a larger slowdown in luxury goods sales. (Global luxury sales were down by approximately 2 percent in 2024, driven in large part by a slowing Chinese market.) The Birkin bag-maker reported recurring operating income of €6.2 billion, representing 40.5 percent of sales, and net profit of €4.6 billion, maintaining a cool 30.3 percent profitability margin.
Regional Performance, Category Breakdown
Despite headwinds in global retail and shifting consumer sentiment, Hermès reported solid performance across all regions both for FY 2024 and for the three months ending on December 31. The fourth quarter, alone, saw sales reach €4 billion, reflecting an 18 percent increase at both constant and current exchange rates. For the full year, all markets posted positive growth …
Despite a slowdown in foot traffic in Greater China, Asia (excluding Japan), which represents Hermès’ biggest market, posted steady growth, up 7 percent year-over-year for FY2024. In Q4, sales in Asia were up by 9 percent. Meanwhile, in Japan (+23%), the market stood out with robust growth, fueled by the loyalty of local clientele and strategic store openings in Tokyo’s Ginza and Azabudai Hills districts.
The U.S. market, where sales were up by 15 percent year-over-year, remained strong, and in Europe (excluding France) (+19%) and France (+13%), strong local demand and a resurgence in tourist spending fueled double-digit growth.
In terms of its various product categories, Hermès’ signature Leather Goods and Saddlery division led the charge. Leather Goods and Saddlery was up by 18% for FY2024, with Hermès citing increased production capacity and “particularly strong” demand as helping to bolster growth. Hermès says that it has continued expanding its leather goods manufacturing network, with the opening of a new workshop in Riom and plans for additional sites through 2027.
Ready-to-Wear and Accessories (+15%): Continued momentum in apparel and footwear, supported by strong seasonal collections presented in Paris. Silk and Textiles (+4%): Growth was more modest, though the category remains an integral part of Hermès’ heritage and appeal. Perfume and Beauty (+9%): New launches, including the well-received Barénia fragrance and expanded Trait Hermès beauty collection, contributed to steady sales.
Watches (-4%): This category faced a decline, hindered by market conditions and a challenging comparison to 2023. Other Hermès Categories (+17%): Jewelry and Home divisions performed strongly, with the eight Haute Bijouterie collection gaining traction in key markets.
Other Takeaways
Axel Dumas, Executive Chairman of Hermès, acknowledged the challenges of an increasingly uncertain economic and geopolitical landscape but credited the company’s strong results to its unique business and products. “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,” he said. Dumas highlighted the “authenticity” of the Hermès brand, noting, “We do not do marketing, we do not try to create an illusion by paying people to wear our products.”
Dumas also took on the topic of counterfeit goods, saying that the robust market for copycat products is “detestable” and the company enforces its rights “with all our means with people who know the law.” Reflecting on the “Walmart Birkin” bag, in particular, the $80 bag that took the internet by storm early this year, Dumas said that consumers “know the difference in quality,” and so, “no one bought this fake product thinking that it was an equivalent product [to an Hermès Birkin bag].” (With such a strong statement against consumer confusion, it is safe to say that Hermès has no plans of waging trademark infringement claims.)
On the pricing front, Hermès revealed that it will boost price tags by 6 to 7 percent this year to reflect higher production costs and exchange rates.
Share
