Another financial quarter amid a global pandemic and Hermès continues to soar. Reporting revenue for the first quarter 2021 -$2,511, 674,312 (€2,084,000,000) – Hermès far exceeded analyst expectations of 19% growth. The actual numbers show a 44% rise (at constant exchange rates) and 33% (at current exchange rates) over the first quarter of 2019. As compared to Q1 2020 (when the pandemic was already in play), the results are even higher.
Geographically, the big winner is Asia (excluding Japan) with a 94% increase. The Americas showed growth of 23% and Japan followed with 20%. Not surprisingly, Europe (excluding France) and France both were in single digit negatives, 1% and 9%, respectively. Many parts of Europe experienced and/or remain in lockdown.
Interestingly, given the huge decline in international travel, Hermès succeeds with local and digital purchasing. In other words, while consumers may be close to home, loyal to Hermès persists.
Despite demand for all things Birkin and Kelly remaining high, those were not the big winners in terms of product category. That honor goes to the (relatively small) Watches division with a 96% improvement. The ‘Other Hermès’ business lines – which includes homeware and fine jewellery – saw an uptick in sales of 93%! Apparently, folks are decorating homes a la Hermès.
‘Ready-to-wear and Accessories’ improved 51%, while both ‘Leather Goods and Saddlery’ and ‘Silk and Textiles’ rose 34%. Interestingly, regarding handbags, Hermès highlighted the success of its mushroom-fabricated bag the Victoria. It also reiterates the continuing expansion of production facilities in France.
However, one point not noted in the report is the impact of the pandemic on supply. For most shoppers, inventory – particularly in handbags – seemed limited and presumably caused by the French shutdowns. In this regard, Hermès notes the difficulty in assessing COVID-19’s impact.
We’re guessing few are surprised by Hermès’s continuing success. Have you been buying? Or planning to? Let us know.