What headwinds? Hermès International galloped along at a stunning pace, with second-quarter sales rising 28 percent against the backdrop of a U.S. slowdown, underlining the French brand’s resilience despite economic softening and geopolitical worries.
Loyalty, quiet luxury and a “multi-local” strategy are the keys to it outperforming against other brands, Hermès executive chair Axel Dumas and executive vice president, finance Eric du Halgouët emphasized in a conference call following the release.
The Q2 results beat analyst expectations by four points, securing the company’s position as the luxury sector’s leader. “In particular, the middle class is younger, more numerous and richer,” he added, noting that it’s not just handbags. Shoes, jewelry and ready-to-wear have been major growth categories this year, and there are no additional price increases on the horizon in H2.
Beauty bumped up 12.4 percent in Q2. The company is looking at this as a growth category and plans to launch new eye products in the second half of the year. While sales in China are strong, Chinese tourists are staying regional with intra-Asia tourism. Europe has benefitted from increased tourist flows attracted by a weak euro, but those are mostly from the Middle East, U.S. and Southeast Asia. “The Chinese are not yet highly present in France, and only marginally in Europe,” du Halgouët noted. Duty free airport sales have strongly rebounded, he added.
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