How Chinese Consumers Drove Hermès’ Q1 Sales

Hermès International clocked a brisk 15.5 percent rise in first-quarter sales, gaining momentum thanks to a lift from the label’s growing popularity in China, as well as an extra boost from currency swings.

Sales for the quarter were 1.61 billion euros, an 11.6 percent rise at constant rates, adding to evidence that high-end consumption remains firm with the all-important Chinese consumer.

Analysts were concerned at the start of the year that a flare-up in trade tensions between China and the U.S. could dampen the Chinese appetite for luxury goods, but recent results posted by the sector’s dominant groups LVMH Moët Hennessy Louis Vuitton and Kering have showed strength in that market, helped by government measures to promote consumption in the Mainland.

The accelerated sales growth shows “the continuation of a dynamic trend, particularly in China,” noted Axel Dumas, executive chairman of the luxury label.

RBC analyst Rogerio Fujimori called the quarterly performance a “rock solid” start to the year, citing the group’s organic sales rate as well as a 12.5 percent growth rate, at constant rates, for the leather goods and saddlery division.

Sales growth in Asia excluding Japan was 16.9 percent, while the figure stood at 6 percent in Europe and 9.8 percent in the U.S.

The company attributed fast growth to the watches division, up 22.3 percent at constant rates, to the launch of the new women’s watch, Galop d’Hermès, designed by Ini Archibong.

This story was reported by WWD and originally appeared on WWD.com.

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