Shares in Hermes soared after the renowned Birkin bag maker announced a significant surge in fourth-quarter revenue, outperforming some of its industry rivals. The impressive results have further solidified the company’s position as a leader in luxury handbags.
At 0852 GMT, Hermes shares witnessed a remarkable increase of 5.2% to EUR2,181.50.
For the last three months, the French luxury-handbag maker recorded revenue of 3.36 billion euros ($3.62 billion), marking a substantial growth of 17.5%, based on constant exchange rates compared to the same period last year. This outstanding performance surpassed market expectations of EUR3.26 billion, according to Visible Alpha consensus.
Bernstein analysts expressed their confidence in Hermes, stating, “We consider Hermes to be at the forefront of the quality group.” They emphasized that the impressive quarterly results further validate the company’s strong brand momentum.
The operating profit for 2023 reached EUR5.65 billion, slightly exceeding analysts’ anticipated figure of EUR5.52 billion based on Visible Alpha consensus. Additionally, net profit experienced a remarkable increase of 28% to EUR4.31 billion, surpassing analysts’ predictions of EUR4.03 billion.
Hermes demonstrated strong performance in the Americas region, with revenue reaching EUR717 million—an impressive growth rate of 22% compared to the previous year’s figures, based on constant exchange rates.
Analysts at Bernstein noted that Hermes’ success in the Americas is an indication of the revitalized momentum among American consumers. This resurgence is attributed to restored confidence and lower inflation.
Furthermore, the announcement by Hermes regarding projected price increases of 8%-9% in 2024 has been well-received by analysts at Bernstein, who view it as a positive development.
Looking ahead to 2024, Hermes expressed confidence in its outlook and affirmed its medium-term guidance for revenue growth at constant exchange rates. The company seems well-positioned for the upcoming year, maintaining strong brand appeal in both handbags and non-leather categories, according to Citi analysts Thomas Chauvet and Lorenzo Bracco.