Hermès maintains its growth in Q3 2024, despite a struggling luxury sector

Hermès has emerged as an outsider to the downward trend affecting the vast majority of luxury goods manufacturers. The designer of the iconic Birkin and Kelly bags has just announced a positive performance for the third quarter of 2024, with sales up 11.3%.

The difficulties in the Chinese market have only partially affected the French giant. Its ultra-luxury positioning enables Hermès to focus its sales targets on an elite group of buyers whose purchasing power is stable despite the turbulence in the global economy.

“Thanks to the singularity of its model, Hermès is continuing its recruitments and long-term investments.” indeed emphasised its executive chairman, Axel Dumas, in a press release this Thursday morning. The luxury group posted sales of 3.7 billion euros for the third quarter, boosted by a number of high-performing markets, in particular Japan (+23%) and Europe excluding France (+18%).

To everyone's surprise, given that this is a time of many financial surprises, analysts' estimates of 11% growth are in line with the results announced. Faced with the fall in LVMH's third-quarter results and Kering's falling profits, weighed down by Gucci, Hermès is holding firm. Axel Dumas was delighted with the results and thanked ‘all employees for the robust third-quarter performance, and our customers for their loyalty.”

The French luxury house has always relied on its classic models for timeless elegance, and so far the bet has been successful. A new Birkin, for example, can cost up to €330,000 in crocodile or limited editions. The Kelly bag, meanwhile, can cost around €7,000, with limited editions, personalised models and those in rare exotic materials fetching five-figure prices. This exclusivity is one of the elements that forge the Hermès brand identity and protect it from the uncertainties of fashion and ephemeral trends.

Hermès nonetheless noted a fall in sales of its ‘more affordable’ products, such as its famous silk scarves and small leather goods accessories, demonstrating consumers' new caution with regard to luxury goods. The company may not be completely immune to the consequences of this global trend in the quarters ahead.