According to an analysis by the investment bank Stifel, the Maison of 24 Faubourg-Saint-Honoré will continue to grow in 2025. What initial conclusions from the past year for the luxury goods market can be drawn?
Faced with a very tense geopolitical context, a drop in consumption in key markets, and several strategic changes within luxury brands, there was no respite for the luxury sector in 2024. This Monday, research firm Stifel looked at the results of Hermès, which is expected to post remarkable sales in 2014 (it was €11.2 billion for the first nine months) and solid growth of 21% on the stock market.
These results set it apart from the mixed or even negative performances of other luxury giants affected by the economic crisis and the rethinking of the sector. The Hermès share is currently trading at €2,371, and sales are expected to approach €15 billion in 2024, up from €6.8 billion in 2019. By way of comparison, LVMH's share price is €644, and its sales are expected to reach €84 billion (in 2019 they were €53.6 billion), while the Kering group, weighed down by Gucci's difficulties, is causing concern among investors, with sales expected to approach €17.2 billion in 2024, compared with €15.8 billion in 2019.
Stifel is convinced that the company based at 24 Faubourg-Saint-Honoré will continue to grow in 2025. All the signs seem green: a loyal clientele that sees the house's iconic products as a safe haven, the winning strategy of focusing on timeless fashion, and a solid base of excellent artisanal production that enables it to avoid the problems associated with subcontracting.
For the current year, Stifel forecasts sales growth of 11.5% for Hermès, while the overall luxury goods sector is expected to see more modest growth (around +7%). First-half results are likely to continue to be impacted by the unresolved issues that have plagued the sector for several months: difficulties in the Chinese market and the widespread caution of buyers.
There is, however, some good news coming out of the United States: while Donald Trump made increased tariffs one of the key arguments of his presidential campaign, it is quite possible that, once in office, the US President will opt for a less rigorous policy towards imports. This could breathe new life into the luxury goods sector, which has been holding its breath for months as it awaits the new government's decisions in one of its key markets.
Hermès is due to report its annual financial results on 14 February, while Stifel is already forecasting 11% growth in revenues for the final quarter.
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