Hermes Bucks Luxury Slowdown With Higher Sales But Flags Weakness in China — Update

By Andrea Figueras

Birkin handbag maker Hermes said sales rose as wealthy customers helped it to defy a global slowdown in luxury demand, even as it flagged signs of weakness in China.

The French company's quarterly revenue was 3.7 billion euros, equivalent to $4.01 billion, a 13% on-year increase at constant currency. The result compares with analysts' forecasts of EUR3.67 billion, according to a poll of estimates compiled by Visible Alpha.

"In a more challenging context, all the regions continued to show remarkable momentum, with the exception of Asia due to an inflection in traffic in Greater China," Hermes said Thursday.

The company noted a tough comparison base in the region during the quarter, as its results in the year-earlier period were boosted by the lifting of pandemic measures in China.

Despite weaker trends, sales in the Asia-Pacific region--which excludes Japan--rose 5.5% on year at constant exchange rates.

Recurring operating profit--a closely-watched metric--jumped to EUR3.15 billion in the first half from EUR2.95 billion during the same months last year. Net profit grew to EUR2.37 billion from EUR2.23 billion.

Looking ahead, the company said it continues to anticipate revenue growth at constant exchange rates in the medium-term, but flagged global economic, geopolitical and monetary uncertainties.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

July 25, 2024 12:59 ET (16:59 GMT)

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