Hermes reports 9.8% revenue growth in fourth quarter, beating expectations

[PARIS] Hermes, which sells handbags for US$10,000 and more, on Thursday (Feb 12) reported another quarter of steady revenue growth, lifted by strong sales in the US and Japan, as the group slightly reduces the pace of price hikes in 2026.

Sales of products – including Birkin and Kelly bags, silk scarves and perfume – grew by 9.8 per cent in the fourth quarter, higher than an analyst consensus compiled by Visible Alpha of 8.4 per cent growth when adjusted for currency swings.

Sales in the Americas region, mainly the US, rose by 12.1 per cent, beating expectations of around 9 per cent.

“The group is going into 2026 with confidence,” said CEO Axel Dumas, adding that price increases in 2026 would be around 5 to 6 per cent, down from a 6 to 7 per cent rate in 2025, attributing the slower pace to currency shifts.

Chiara Battistini, luxury equity analyst at JP Morgan, said the price increases Hermes imposes on its deep-pocketed clients in 2026 will be key for the company’s growth outlook.

Many of its rivals have tapped the brakes on price hikes due to falling sales.

Revenue in Hermes’ leather division, which accounts for most of its profits, grew by 14.6 per cent organically.

The company’s full-year operating profit came in at 6.6 billion euros (S$9.8 billion), reflecting a 41 per cent profit margin, slightly ahead of estimates of a 40 per cent margin.

Hermes said it would pay a dividend of 18 euros a share.

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Thanks to its ultra-wealthy clients, who are less affected by inflation, and its large order backlog, the company has weathered the luxury sector’s ongoing slowdown better than most of its rivals. REUTERS