Hermes Sales Rise 23% in Q1, Boosted by China

A couple walk with Hermes shopping bags as they leave an Hermes store in Paris March 21, 2013. REUTERS/Philippe Wojazer/Files
A couple walk with Hermes shopping bags as they leave an Hermes store in Paris March 21, 2013. REUTERS/Philippe Wojazer/Files
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Hermes Sales Rise 23% in Q1, Boosted by China

A couple walk with Hermes shopping bags as they leave an Hermes store in Paris March 21, 2013. REUTERS/Philippe Wojazer/Files
A couple walk with Hermes shopping bags as they leave an Hermes store in Paris March 21, 2013. REUTERS/Philippe Wojazer/Files

Sales at Birkin bag maker Hermes rose 23% in the first quarter, above market expectations, as wealthy shoppers in China and Europe splurged on luxury fashion and accessories despite higher prices and global market turmoil.

Sales for the three months ending in March came to 3.38 billion euros. The increase of 23%, at constant exchange rates, beat a Visible Alpha consensus of 15% growth.

Hermes finance chief Eric du Halgouet told journalists store traffic in the United States, where rival LVMH earlier this week flagged softer demand for fashion and leather goods, continued to rise and trends in April remained positive.

"What we're seeing in the United States is globally an increase in (store) traffic, the trends we've seen in April remain favorable, with, again, very dynamic traffic," he said.

"We obviously remain vigilant as far as macro trends are concerned... but we have not seen a slowdown so far."

Hermes raised prices by around 7% at the start of the year, a higher rate than its usual 2-3% annual increase.



Adidas Holds Back on Profit Upgrade Due to Tariff Uncertainty 

The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
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Adidas Holds Back on Profit Upgrade Due to Tariff Uncertainty 

The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)

German sportswear maker Adidas on Tuesday said higher US import tariffs and broader uncertainty around trade were clouding its forecasts and making it difficult to plan.

CEO Bjorn Gulden said the company would have hiked its revenue and profit guidance for 2025 after strong first-quarter results, but tariff uncertainty meant it decided to hold back.

Adidas expects the blanket increase in US tariffs to eventually cause price increases across all its products, but said it was currently impossible to quantify those or to establish the likely impact on US consumer demand, highlighting the paralysis caused by trade uncertainty.

Adidas has already reduced exports of China-made goods to the US to a minimum but is still "somewhat exposed" to much higher US tariffs on Chinese goods, Gulden said, though it is unclear how long those might remain at the current level.

"Given the uncertainty around the negotiations between the US and the different exporting countries, we do not know what the final tariffs will be. Therefore, we cannot make any 'final' decisions on what to do," Gulden said.

Unexpectedly high US tariffs on Southeast Asian countries such as Vietnam and Indonesia, announced at the start of this month, but paused until July, blindsided sportswear brands, which make most of their sneakers and clothing there.

As tariffs raise the cost of doing business, Adidas said it would strive to ensure US retail partners and consumers get product "at the best possible price", adding it would try to compensate for uncertainty in the US by boosting its performance in the rest of the world.

First-quarter sales rose 14% in Europe and 13% in Greater China and were up 26% in Latin America. Sales in North America increased just 3%, which Adidas said was due to the phase-out of its Yeezy sneaker line.

While sticking to its full-year guidance, Adidas said uncertainties "could put negative pressure on this later in the year".