Dive Brief:
- Hermès reported 2024 revenue of 15.2 billion euros, or about $15.9 billion, marking a 13% year-over-year increase, according to a press release Friday. For the fourth quarter, the company saw nearly 18% revenue growth to 4 billion euros.
- The France-based luxury house saw growth across all its divisions in 2024, with the exception of its watch business, which fell 5.6%. Leather goods and saddlery grew the most, by 16.4%, while ready-to-wear and accessories grew by 13.6%.
- Hermès also saw gains across each region, with Europe growing 16% and Asia 7.3% year over year. However, the company saw nearly 110% growth in the Middle East region, where it recently became a majority shareholder for the retail operations in the United Arab Emirates.
Dive Insight:
While some luxury firms, including Kering and LVMH, are seeing sharp revenue declines, Hermès is challenging the luxury fashion slowdown narrative with continued revenue growth over the past several quarters.
Hermès is likely to continue to outperform due to its unique business model, which includes pricing power, scarcity-driven exclusivity and control over its distribution, according to Yanmei Tang, analyst for Third Bridge. The brand’s customer base is loyal, affluent and remains resilient despite economic downturns, she said.
“While iconic products like the Birkin and Kelly remain strong revenue drivers, accounting for 40-50% of leather goods sales, Hermès faces the risk of over-reliance on these models,” Tang said in a statement. “Expanding its leather goods lineup while maintaining brand exclusivity will be key to sustaining momentum.”
On a call with investors, Chairman Axel Dumas described Hermès’ clients as a “very loyal consumer base”
Dumas was asked how Hermès would respond to proposed tariffs under the Trump administration in the U.S. Though the company produces about 75% of its products in France, it sells all over the world. In the company’s 90-year history, it has seen custom duties rise and fall, Dumas said. If the custom duties go up, Hermès will increase prices to make up for it.
“Our American customers will understand and remain loyal, and those who find it too expensive will come to benefit from our hotel infrastructure in Paris,” Dumas said. “I regret this, but I'm not particularly worried.”
In its earnings release, Dumas said the company’s 2024 results showed the strength of its business model in an uncertain economy.
Due to the increased revenue results, the luxury house also announced it would give bonuses of 4,500 euros to all of its employees worldwide. The company employs about 25,000 people.
Hermès did not specify a monetary amount for its 2025 financial outlook, but said it confirmed an “ambitious goal for revenue growth at constant exchange rates.”
