Hermes reports 9.8pc revenue growth in fourth quarter, beating expectations

Hermes, which sells handbags for US$10,000 (HK$78,000) and more, on Thursday reported another quarter of steady revenue growth, lifted by strong sales in the United States and Japan, as the group slightly reduces the pace of price hikes this year.

Sales of products including Birkin and Kelly bags, silk scarves and perfume grew by 9.8 percent in the fourth quarter compared to an analyst consensus compiled by Visible Alpha of 8.4 percent growth when adjusted for currency swings.

Sales in the Americas region, mainly the United States, rose by 12.1 percent, beating expectations of around 9 percent.

"The group is going into 2026 with confidence," said chief executive Axel Dumas, adding that this year's price increases would be around 5-6 percent, down from a 6-7 percent rate in 2025, attributing the slower pace to currency shifts.

Chiara Battistini, luxury equity analyst at J.P. Morgan, said the price increases Hermes imposes on its deep-pocketed clients this year will be key for the company's growth outlook.

Many of its rivals have tapped the brakes on price hikes due to falling sales.

Revenues in Hermes' leather division, which accounts for most of its profits, grew by 14.6 percent organically.

Hermes' full-year operating profit came in at 6.57 billion euros (HK$60.96 billion), reflecting a 41percent profit margin, slightly ahead of estimates of a 40 percent margin. The company said it would pay a dividend of 18 euros per share.

Thanks to its ultra-wealthy clients, who are less affected by inflation, and its large order backlog, Hermes has weathered the luxury sector's ongoing slowdown better than most of its rivals.

REUTERS