Hermès has recorded a 6.7 per cent increase in second-quarter sales as continued demand for its handbags, stronger trading in the Americas and Japan, and a recovery in European tourism helped it outperform much of the wider market.
Sales reached £3.51bn during the three months to the end of June, broadly in line with market expectations and accelerating from growth of 5.6 per cent in the first quarter.
At reported exchange rates, second-quarter revenue increased 4.8 per cent, highlighting the pressure that unfavourable currency movements continue to place on European luxury groups.
The performance took Hermès’ first-half revenue to £7.02bn, up 6.1 per cent at constant exchange rates but only 1.6 per cent on a reported basis.
Currency fluctuations wiped more than £308m from the group’s revenue during the six-month period.
The Birkin bag maker has proved more resilient than many luxury rivals during the sector’s prolonged slowdown. Its focus on affluent and ultra-high-net-worth customers has helped shelter the business from the pullback in discretionary spending affecting more aspirational shoppers.
Hermès also tightly controls the production and distribution of its products to maintain scarcity. Its most sought-after handbags can cost more than £7,526, with availability deliberately restricted through its store network.
Americas and Japan lead growth
The Americas remained Hermès’ strongest-performing region during the first half, with sales rising 15.3 per cent at constant exchange rates.
Growth was described by the business as balanced across its markets and product categories. The group also staged the second chapter of its autumn/winter 2026 womenswear presentation in Los Angeles during June.
Japan delivered an 11 per cent increase over the half, accelerating to 12.3 per cent in the second quarter, supported by strong store traffic and demand from local customers rather than relying solely on tourist spending.
Hermès expanded and renovated its Hilton Plaza East shop in Osaka before opening a new store in Nagoya in June.
Europe excluding France posted first-half growth of 8.8 per cent, while second-quarter sales rose 8.3 per cent.
The group strengthened its UK presence in June with the opening of a new Hermès Maison at 166 New Bond Street in London. The store spans six buildings and covers more than 2,000sq m.
Trading in France also improved sharply during the second quarter. Sales increased 6.2% after falling during the opening three months of the year, as local demand strengthened and international visitors returned to Paris.
Executive chairman Axel Dumas said the group had seen better momentum across its Paris stores and an improvement in tourist traffic.
China stabilises but recovery remains muted
Asia-Pacific excluding Japan, Hermès’ largest region by sales, grew 2.5 per cent during the quarter, broadly in line with its first-quarter performance.
The group said trading continued to grow across Greater China, while Korea delivered a particularly strong performance. It opened a store in Beijing’s Sanlitun district and refurbished locations in Hong Kong and Taipei during the period.
However, Dumas said that while the Chinese market appeared to be stabilising, Hermès was not yet seeing a fundamental rebound.
China’s sluggish property market and weaker consumer confidence have weighed on luxury spending in recent years, forcing brands to rely more heavily on demand from the US, Japan and wealthy local customers in Europe.
Hermès’ Middle Eastern business remained under pressure from regional conflict. Sales in the area fell 2.4 per cent during the second quarter, although this represented an improvement from the 5.9 per cent decline recorded in the first three months of the year.
Leather goods and silk drive sales
Leather goods and saddlery, which generates almost half of Hermès’ revenue, recorded second-quarter growth of 10.2 per cent.
The category benefited from continued demand for its established handbag ranges alongside newer products including the Cliquetis, Kelly Hobo and Double Longe models.
Hermès is gradually expanding production to address demand without undermining its exclusivity. It opened its 25th leather goods workshop in Loupes, France, in April and plans three further sites in Charleville-Mézières, Colombelles and Les Andelys by 2030.
The long lead times involved in training artisans and manufacturing bags by hand prevent the company from increasing supply as rapidly as conventional fashion retailers.
Silk and textiles was the fastest-growing major division during the second quarter, with sales up 12.2 per cent. Watches returned to growth with a 4.4 per cent rise, while ready-to-wear and accessories improved 3.6 per cent.
Perfume and beauty was the only category to decline, with sales falling 9.5 per cent during the quarter despite new fragrance and cosmetics launches. The division’s weaker performance may reflect the more cautious behaviour of aspirational customers, who are more exposed to economic pressures than Hermès’ core handbag clientele.
Profitability remains above 40%
Recurring operating income increased slightly to £2.91bn during the first half, giving Hermès an operating margin of 41 per cent.
The margin was marginally below the 41.4 per cent reported a year earlier but remains significantly higher than those achieved by most listed luxury groups.
Net profit was broadly flat at £1.88bn, while adjusted free cash flow jumped 18 per cent to the same amount. Hermès ended June with a restated net cash position of £11.04bn.
Hermès maintained its medium-term ambition for revenue growth at constant exchange rates despite continuing economic, geopolitical and currency uncertainty.
Dumas said the group was entering the second half with confidence, supported by the strength of its vertically integrated manufacturing model, controlled distribution network and loyal customer base.
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