Hermes sales come under pressure

Second quarter sales fell overall, despite strong growth in China, as Adrian Holloway reports

French super-deluxe player Hermès has seen second quarter sales growth hit by more foreign exchange gusts and slowing Japanese sales. Though Hermès’ first quarter revenues were 10.1% up on the previous year, second quarter sales growth slid 5.8%. The slowdown was dramatic in the US: growth tumbled from 17.9% to 7.9%.

Dig into the figures more deeply though and second quarter sales in China hit 16% growth – at constant currency exchange rates. So a conflicted results picture all-round. “Europe was somewhat better than hoped for,” said UBS analyst Eva Quiroga on Europe’s 6% sales climb.

Although first-half margins are likely to come under pressure, last year’s 32.4% result was an all-time high. Hermès claims perfume sales, up 8% overall at constant exchange rates (u114.6m), benefited from the launch of Jour d’Hermès, supported by “promising” launches of Jour d’Hermès absolu and Terre d’Hermès eau très fraîche.

Adrian Holliday, London