Luxury fashion brand Hermès has experienced strong sales and profit growth in the first half of 2022. The company, like many other luxury brands, saw a surge in sales in Europe and the US, with signs of recovery also appearing in China towards the end of the quarter. In the second quarter, Hermès reported a 27% increase in sales on a reported basis and a 20% increase in currency-neutral terms, reaching €2.7 billion. For the first half of the year, revenue rose by 29% at current exchange rates and 23% in currency-neutral terms, amounting to €5.475 billion. Net profit also saw a substantial increase of 40% to reach €1.641 billion.
Hermès’ recurring operating income accounted for €2.304 billion, which represents 42% of sales. The company’s executive chairman, Axel Dumas, described these results as “very dynamic” and expressed confidence in the brand’s ability to navigate through an unstable environment. Geographically, all regions witnessed robust sales growth in the first half of the year, with Asia displaying resilience despite the ongoing challenges brought about by the pandemic.
Sales in Hermès’ own stores experienced a 23% rise, benefiting from the expansion of its omnichannel network and online sales. Wholesale also saw a significant increase of 25%, driven by the recovery of travel retail. The company highlighted a 15% rise in sales in Asia, excluding Japan, with Singapore, Australia, and Korea performing particularly well. Greater China experienced a strong rebound in June after being impacted by sanitary restrictions and store closures earlier in the year.
Hermès achieved remarkable performance in Japan, where sales rose by 20% thanks to the loyalty of local customers. The brand also witnessed strong growth in the American market, with sales increasing by 34%. Europe, excluding France, and France itself saw sales growth of 34% and 41%, respectively, driven by the loyalty of local customers and the return of tourists.
In terms of business lines, Hermès reported outstanding growth in various divisions. Ready-to-Wear and Accessories saw a surge of 36%, propelled by the success of fashion collections. The Silk and Textiles business line experienced a 29% increase in sales, while Perfume and Beauty witnessed a growth of 23% due to new product launches. The Watches business line saw remarkable growth of 55%, and other Hermès business lines also showed a rise of 33%.
Looking ahead, Hermès acknowledges that the impact of the ongoing health crisis remains uncertain. However, the company maintains confidence in its future prospects and reaffirmed its ambitious goal for revenue growth at constant exchange rates in the medium term. Despite economic, geopolitical, and monetary uncertainties, Hermès remains optimistic.
Useful Links:
1. Hermès Official Website
2. Reuters Article: Hermès Revenue Jumps 29% in H1, Upgrades Profit Growth Goal
