Hermès delivered another strong quarter, reporting on Tuesday that sales during the third quarter reached €3.9 billion ($4.5 billion), up 10 percent on a constant basis from Q3 2024 and a slight acceleration compared to the previous 3-month period. Meanwhile, revenue for the first 9 months of the year rose to €11.9 billion ($13.8 billion), up 9 percent year-over-year on a constant basis, led by sales in Japan (+15%), Other/Middle East (+15%), and the Americas (+13%); Europe ex-France (+12%), France (+9%), and Asia ex-Japan (+4%) also advanced, according to Hermès.
Across Hermès’ métiers, Leather Goods & Saddlery (+13%) sales set the pace first the first nine months of the year, followed by Other Hermès (Jewelry & Home, +11%), Ready-to-wear & Accessories (+6%), and Silk & Textiles (+4%). By contrast, Perfume & Beauty (−5%) reflected a tough comparison base and Watches (−3%) softened.
In an earnings call on Tuesday, Hermès CFO Eric du Halgouët noted that as of the end of September 2025, the leather goods & saddlery and the other Hermès sectors achieved “solid growth.” The ready-to-wear, accessories, and silk and textile sectors accelerated in Q3, with Hermès “maintaining its course thanks to solid growth, thanks to our investments, and thanks to our creation of jobs to support our growth.”
Questions from the Q3 earnings call are as follows …
>> Charles-Louis Scotti (Kepler Cheuvreux): Could you give us an update on trading and an outlook on Q4 because the organic revenue has increased by EUR 350 million in line with Q2? Do you think that you can keep that pace in spite of a comparison basis which will be more complicated for Q4? Could you tell us a bit more about your confidence going forward, especially for Greater China?
On the leather goods growth, it has slowed down, although it’s still in keeping with annual targets. Have you built up any stocks in Q3 to support growth in Q4 where the comparison basis will be particularly tough for leather goods?
du Halgouët: As you say, Q4 will be a higher comparison basis. We’re at something like $200 million more than in Q3. The trends at early October mean that we are confident in spite of this comparison basis. We’re confident across all the regions. Leather goods at +13% is in keeping with our annual target. I’ll also recall that our deliveries are not linear for our different stores, so it’s really delivery effects. Our stocks have been rebuilt and will be at a similar level to that same time last year to prepare for the end of the year and for the Chinese New Year.
>> Anne-Laure Bismuth (HSBC Holdings): On the specifics in Asia (bar Japan), we’ve seen a slight increase in the percentage. Is the increase down to China mainly? How do you explain this slight improvement when some of your peers have seen a better improvement in Q3? Is there still less footfall in the stores in China? Second question, have you completed your price increases for next year and can you tell us more on that?
du Halgouët: For Asia-Pacific, for South Asia, we have seen a speed-up in growth. We’re looking at double-digit growth in Malaysia, Korea, Australia, and similar growth between Q3, Q4 for Singapore and Thailand. For Greater China now, I’d just like to remind you that we grew over the whole year in 2024, and there again, this year we are posting growth since the beginning of the year up until the end of September. There’ll be no huge changes in that trend. We continue with our value strategy. There is a slight improvement in Q3 this year compared to Q2.
There are two encouraging signs which make us optimistic from a macroeconomic point of view. First of all, there is more stability in real estate in tier-one cities in China, so that’s a positive signal. Secondly, we have another reason to be optimistic. It’s the pickup of the financial markets in continental China and Hong Kong, which is also a good sign. For the first week of October, which was the Golden Week in continental China, we saw quite strong and dynamic business. We can’t extrapolate this for the whole quarter, but nonetheless, it is encouraging.
Regarding your question on price increases, we have our budget process which is underway, so it’s too early to give you any indication on that. I can only tell you that [next year’s price increase] will be below the price increase of this year. That’s the only indication I can tell you right now, but the budget is still under discussion.
>> Luca Solca (Bernstein): My question is on the demand trends for the different segments of your client base. We can see that the most affluent part of your client base is very dynamic at the moment. I was wondering if this is a trend that will continue in the future. Is it going to also drive demand in China? It seems that wealthy and affluent people are also going to be a key driver there. Could you give us a little bit more detail on the demand dynamics that you currently see in the U.S.? Is it a demand that is very broad, that encompasses the whole customer base, or is it driven by the wealthier individuals given the cryptocurrency market trends at the moment?
du Halgouët: First of all, for our Chinese client base, outside of Greater China, we haven’t seen a speed-up, particularly for wealthy individuals. The two client bases that we believe are the most important in Europe and France are people from the U.S. and the Middle East who travel over. We saw it in Q3, a slight uptick when the events between Israel and Qatar, when the tensions were at their highest. We’ve gone back to normal levels since then. As you’ve seen, silk, which is a volume-driven division, and clothing and fashion accessories have sped up a little bit. We’ve seen these divisions benefit from a slightly higher footfall, including in the U.S.
We had a very good Q3 in the U.S., growth that was driven by jewelry, silk, shoes, watches, by pretty much all of the divisions, an increase in footfall, and also a growth that is well distributed between the East and the West Coast. Over and beyond the U.S., Mexico and Brazil also have sped up their growth. Also, a reminder, the U.S. is a country where we’ll be focusing our development. In October, we opened a store in Nashville, Tennessee. We’re going to continue to focus the development of our network in the U.S.
>> Thomas Chauvet (Citi): Grace Wales Bonner was appointed yesterday [as Hermès menswear director]. A lot has been said, but is it going to mean a more modern, more casual look to the men’s ready-to-wear collection? How much does the menswear weigh in the total revenue?
Second question on perfume and beauty, which was at about 3% of the revenue. It’s about EUR 500 million over the whole year. This is a business which is more and more strategic for other players in the luxury industry. What is the weight of makeup five years after its launch? Are you thinking about launching a new line of care products? Are you happy with the profitability of this venture into makeup? Tell us a bit more about the vertical integration for perfumes.
du Halgouët: Regarding the appointment of Grace Wales Bonner, it really is in keeping with our desire to continue on the momentum. I think that Grace has got a lot of things in common with Véronique Nichanian, her love of craftsmanship, for example, and her very contemporary outlook on fashion. She’ll be bringing her own signature to a new chapter for men’s ready-to-wear, and her first collection will be presented in January 2027.
Regarding perfumes now, as you’ve seen, a slight decrease in Q3. In the press release, we said that it was down to the high comparison point with the launch of Barénia in Q3 and Q4 last year. There’s a deceleration between our delivery and the end sales to customers. The end sales continue to increase in France, Germany, Italy, etc. The takeaway here is that our pillars, Barénia and Terre d’Hermès, continue to grow. As for your point on care products, this is a project that we’re still working on, but for 2028 onwards.
>> Antoine Belge (BNP Paribas Exane): For clothing and accessories, it’s a category that is, well, two-pronged categories with different dynamics. You mentioned at Q2 that some accessories, like belts, for example, were bought by tourists, and that because there was less tourism, it explained the job. Could you tell us a bit more detail on Q3 for clothes on one side and accessories on the other? Second question: Do you think that your [operational margin rate] will be around 40% or above? Is that still achievable? You talked about the negative exchange rate on the revenue for Q3. I imagine it’ll be the same for Q4. Generally, when you’re impacted on the revenue in 2025, you’ll be maybe also impacted going forward.
Then the third question, there was some controversy over Brunello Cucinelli and on some sales in Russia. Could you maybe tell us what you do or don’t do in Russia and with the Russian client base?
du Halgouët: Now, clothes and accessories indeed cover men’s ready-to-wear, women’s ready-to-wear, and fashion accessories. Growth is driven by ready-to-wear for both men and women. For the rest, it’s a bit more complicated for fashion accessories. It’s a division that is very much about volume. Now, regarding our operational margin, I’d just like to remind you, and you’ve seen it over the years, the profitability in Q2 is always lower to Q1 simply because we speed up our investments during the year. This year, we’ve got an exchange rate impact which is quite homogeneous, but we have also made some gains on our hedging, but there’s been the depreciation of euro.
We’re going to speed up also our communication investments in Q2. For recruitment, we’re also very conservative at the beginning of the year. We always wait for the general trend to crystallize before we can start recruiting. Recruiting will also be a bit faster from now on. That’s the different elements to bear in mind, the different elements that are there to support the growth of the group.
Regarding sales in Russia, we are one of the first groups to have pulled out of Russia and closed our stores after the beginning of the war. All of our stores are closed since the war started. We’d kept the stores, but we’re now exiting the leases so that we only keep one store in Stoleshnikov just to host the couple of people who are in charge of legal obligations and maintenance. We have no business in Russia anymore.
>> Édouard Aubin (Morgan Stanley): For the store openings, we’ve seen trends over the last two years: the total number of stores is pretty much the same or even a tiny bit lower, but with a bigger average size for the stores. In 2025 and 2026, are we going to be seeing the same trend? Could you maybe tell us an even vague idea of the percentage increase in square meters? Secondly, I imagine that for leather goods, you’re looking at capacity over the next few years. In light of that, the 6%-7% growth that you’ve enjoyed over the last few years in leather goods, is it going to be the same for 2026, 2027? Do you think that you keep that rhythm of +6%, +7% over the next two years?
du Halgouët: You’ve summed up very nicely the strategy of the group. We are moving to larger stores, stores that are generally more than 500 square meters. For 2026, we have two large projects which are going to be completed. First of all, we’ve got the renovation and the extension of the Geneva store, which is a temporary store at the moment. There’s another big project where we’ll be opening Bond Street in London. It’s a very big project, and it’ll be a very original store, and it’ll open around the summer, a bit before. We also have a store that will be opening in China, a market that we invest quite a lot on, and in the U.S. This year and next year, we always have three to four openings of stores and about 15 projects of renovation and expansion.
Regarding leather goods capacity at +6%, +7%, we are going to be in line with that for next year with the opening of a new leather goods workshop, but also with the extension of some older sites that have reached maximum capacity. We keep to our rule of having sites with 300 people maximum, 250 of which are craftspeople. In 2026, we’re going to continue with our capacity increase around +6%, +7%.
>> David Demaya (CIC): You mentioned a slight improvement in Q3, and I’d like to know whether that is attributable to an increase in footfall, as you highlighted for the U.S., for instance, or is it your value strategy that is paying dividends in China?
du Halgouët: Actually, it’s a little bit of both. There is a slight increase in footfall, and our value strategy is also paying dividends. Our value strategy aims at selling products of higher value. For jewelry, for example, we sell larger items. Likewise, for watches, we sell more items with complications. It is the combination of both which explains this improvement, which speaks to this good improvement in early October. You need to, of course, remain humble and conservative. There are some positive signals in China with the financial markets that are recovering, and also the real estate in tier-one cities in China, which is stabilizing.
Share
