Hermes to Raise Prices after Q4 Sales Boom

(FILES) This picture taken on December 20, 2017 shows the logo of the French fashion main house and luxury goods Hermes outside a shop in the fashionable and luxurious street "rue du faubourg Saint-Honore" in Paris. (Photo by STEPHANE DE SAKUTIN / AFP)
(FILES) This picture taken on December 20, 2017 shows the logo of the French fashion main house and luxury goods Hermes outside a shop in the fashionable and luxurious street "rue du faubourg Saint-Honore" in Paris. (Photo by STEPHANE DE SAKUTIN / AFP)
TT

Hermes to Raise Prices after Q4 Sales Boom

(FILES) This picture taken on December 20, 2017 shows the logo of the French fashion main house and luxury goods Hermes outside a shop in the fashionable and luxurious street "rue du faubourg Saint-Honore" in Paris. (Photo by STEPHANE DE SAKUTIN / AFP)
(FILES) This picture taken on December 20, 2017 shows the logo of the French fashion main house and luxury goods Hermes outside a shop in the fashionable and luxurious street "rue du faubourg Saint-Honore" in Paris. (Photo by STEPHANE DE SAKUTIN / AFP)

Birkin bag maker Hermes said it will raise prices this year after sales jumped 17.5% in the fourth quarter of 2023, demonstrating the resilience of high end shoppers despite economic headwinds.
Sales for the three months to the end of September totaled 3.36 billion euros ($3.62 billion), up 17.5% at constant foreign exchange rates. That was ahead of expectations for 14% growth, according to Visible Alpha consensus estimates.
The company plans to lift prices by between 8% and 9% this year globally, executive chairman Axel Dumas told reporters on Friday, according to Reuters.
One of the most consistent performers in the luxury goods industry, Hermes has a track record of outpacing rivals when economic conditions deteriorate, thanks to its classic designs and careful management of production and stocks, which helps maintain the label's aura of exclusivity.
Handbags like the coveted $10,000 plus Birkin model are affordable only for the wealthiest shoppers -- who are typically the more immune to choppy economic conditions.
Hermes will pay a 4,000 euro bonus to each of its over 22,000 employees worldwide, the company said.



Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
TT

Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)

Birkin-bag maker Hermes reported a 13% rise in second-quarter sales on Thursday, demonstrating the continued appetite from wealthy shoppers for its luxury handbags, even as less affluent consumers pull back.

Sales at the French luxury group grew to 3.7 billion euros ($4.02 billion), a 13% organic sales rise that strips out currency fluctuations. The figure was in line with analyst expectations, according to a Visible Alpha consensus.

Operating profit for the first half was 3.1 billion euros, compared to a forecast from consensus provider Visible Alpha for 3.2 billion.

One of the most steady performers in the luxury goods sector -- even as economic conditions worsen -- the French group's results stand out after a string of disappointing earnings updates from peers which have raised investor concern about uncertain prospects for the sector in the coming months.

Hermes' famously classic designs and tight management of production and stock have helped reinforce the label's aura of exclusivity, and CEO Axel Dumas told reporters the company had seen "no big interruption in trends".

However, he said Hermes was seeing slightly less traffic with aspirational clients, which was impacting higher volume products like fashion accessories.