Hermès Maintains Momentum in Q3 2025 Led by Leather Goods

Image courtesy: Hermès

Hermès, the maker of the iconic Birkin and Kelly handbags, maintained growth during the third quarter of 2025, posting revenues of €3.9 billion, up 10% at constant exchange rates (5% at current). It reported steady demand across regions, offsetting currency headwinds and a challenging luxury sector. Leading the charge was its hallmark and largest division — Leather Goods and Saddlery — with a revenue increase of nearly 13% (at constant rates) over the same quarter last year. This suggests that demand for Hermès handbags remains robust notwithstanding substantial price increases in 2025, particularly in the United States, where Hermès passed on its additional US tariff costs to customers.

Looking at the first nine months of 2025, Hermès reported that revenue for that period totaled €11.9 billion, representing an increase of nearly 9% at constant exchange rates over 2024.

Executive Chairman Axel Dumas commented:

“In the third quarter, Hermès is maintaining its course, thanks to solid growth that reflects the strength of our model. We remain focused on navigating uncertainties, thanks to the loyalty of our customers and the commitment of our employees.”

Image courtesy: @thestylishfreelancer

Geographically, Hermès saw growth in all regions, reporting double-digit numbers in many areas. Asia (not including Japan) managed 4% growth, as Hermès says it saw a slight improvement in Mainland China over the last quarter.

Europe (excluding France) and France saw sales increase by 12% and 9%, respectively, which Hermès termed “solid” and backed by high client loyalty. Adding to regional momentum was the reopening of the Florence, Italy boutique following renovation and expansion and the Istanbul, Turkey stopover of Hermès’ ravelling event, Hermès in the Making.

The Americas advanced 13%, driven in particular by the United States, despite two price increases in the first six months of the year, the second driven by US tariffs. As a result, prices for many items in the US are up more than 10% this year. For example, the US price of a 25cm Birkin in Togo leather rose in 2025 from $11,400 to $12,700 — that’s an 11.4% increase. Beyond Leather Goods, Hermès reports strong results in Ready-to-Wear, Silk, Jewellery, and Watches. The new Scottsdale boutique opened during the third quarter, and another in Nashville just this past week (technically, a fourth quarter event).

Japan maintained its strong double-digit momentum at 15%, supported by a loyal domestic clientele. The Middle East and other markets also grew 15%.

Image courtesy: @lari.dodo

As for Hermès’ métiers, most continued to show strong growth in Q3 2025, though Perfume & Beauty and Watches still faced modest setbacks. The Leather Goods and Saddlery division continues to gallop ahead, climbing 13%, fueled by sustained demand across all regions and new launches such as the Tablier Sellier and Besace Trotting, alongside the return of the iconic Plume. Collections were further enriched with the Faubourg Express, P’tit Arçon, Médor, and Bolide Messenger bags. Heading into the peak season in Q4, Hermès reports that leather goods stocks are expected to remain robust, broadly in line with the same period last year.

Ready-to-Wear and Accessories advanced 6%, showing a Q3 acceleration. Highlights included the women’s Spring-Summer 2026 collection unveiled at the Garde Républicaine and the Fall-Winter 2025 presentation in Hong Kong. On the Men’s side, the Spring-Summer 2026 runway show at the Palais d’Iéna was very well received, highlighting the Maison’s continued focus on menswear.

A creative shift is underway post-Q3, however, Hermès recently announced that long-time Men’s Creative Designer Vèronique Nichanian will show her last collection in January 2026. She will be succeeded by Grace Wales Bonner, whose first collection is expected one year later. Hermès emphasized that her vision aligns with the Maison’s contemporary outlook and will drive Hermès’ menswear into a new era, while bringing her own signature style and building on Hermès’ legacy.

Silk and Textiles recorded 4% growth, supported by creative momentum across formats and materials. The Other Hermès sectors — including Jewellery and Home — increased 11%, continuing to deliver strong growth. Highlights included the eighth Haute Bijouterie collection, Les formes de la couleur, presented in July in Tokyo. Meanwhile, on the Home side, Hermès is creating a new Tableware workshop in Couzeix, signaling continued growth ahead.

Hermès’ Perfume and Beauty division recorded a 5% decline, pressured by a high comparison base from last year’s strong performance, which included the launch of Barénia. The Watches métier also struggled, recording a 3% decrease amid ongoing market challenges. Despite this, Hermès is expanding its offerings with new versions of the Hermès H08 line and reinterpretations of its iconic Le temps suspendu complication across the Arceau and Hermès Cut lines. The Maison plans to further boost watch production capacity with the Noirmont site expansion, scheduled for completion by 2028.

Two important takeaways from the Q&A portion of Hermès’ presentation: prices will rise in 2026, but less than in 2025, and production capacity growth for leather goods will continue to increase by 6-7 percent. Hermès declined to provide specific guidance on the level of price hikes next year as budgets remain under discussion. Regarding leather goods capacity, Hermès pointed to the ongoing construction of workshops in Loupes (2026) and Charleville-Mézières (2027), as well as the planned opening of a leather goods hub in Colombelles (2028). The Maison emphasized that it continues to limit workshops to between 250–300 craftspeople to preserve artisanal quality.

Our take is that Hermès anticipates the demand for its leather products to remain strong regardless of economic and geopolitical challenges. It likely takes comfort in a strong and highly affluent customer base, with an appetite and assets for its handbags that now cost well over $10,000. Keeping supply growing at 6-7% seems to ensure that there are not enough Birkins and Kellys to satisfy those with the bags on their wishlists.

Image courtesy: @kathrinbommann

Looking ahead, Hermès remains confident despite global uncertainties, relying on its artisanal model, curated distribution, and creative collections to sustain steady growth and preserve its hallmark craftsmanship. It also faces a year of creative transition, as it awaits Grace Wales Bonner’s 2027 debut and a new chapter for the Maison with a fresh, contemporary vision.

Do you think Hermès is poised to continue its momentum into 2026 and beyond? How are you feeling about the Maison’s new creative direction under Grace Wales Bonner? Share your thoughts.

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