Hermès reports profit dip despite sales increase in first half

Luxury group Hermès announced on Wednesday a 5 percent decrease in net profit for the first half of the year to 2.2 billion euros. This was impacted by the exceptional contribution of businesses. However, its sales increased by 7.1 percent to eight billion euros.

Excluding the exceptional contribution, "net profit attributable to the group amounted to 2.5 billion euros, up 6 percent compared to the first half of 2024", according to the statement. Praising "the solid first-half results across all regions", managing director Axel Dumas, quoted in the press release, announced that Hermès will "continue to invest and recruit to perpetuate the house's success". Sales in the Americas region increased by 9.5 percent to 1.45 billion euros "in a more volatile context, driven by double-digit growth in the US".

Regarding the new 15 percent customs duties for products exported to the US announced on Sunday, Dumas stated in an exchange with the press that he was "waiting for the precise rules of the game". "The latest announcements need to be refined," he said, pointing out that the rates were at 4.7 percent at the beginning of the year, to which new 10 percent customs duties were added in April. "If the 15 percent is the 10 percent plus the five percent that existed, there is no reason to increase prices," he said.

Following the 10 percent customs duties imposed in April, the group increased its prices in the US by five percent. "There is another equally important issue, which is the decline of the dollar," added Dumas. "We have a dollar that has fallen a lot; that has as much impact, if not more, than customs duties," he believes.

In the Asia excluding Japan region, the group's sales increased by 1.5 percent to 3.57 billion euros. "I don't see any fundamental change at the moment in the sales atmosphere in China, which remains buoyant for us," Dumas pointed out. In Japan, sales jumped by 17.6 percent to 815 million euros.

In Europe, excluding France, turnover grew by 12 percent to over one billion euros, while sales in France grew by 8.7 percent to 740 million euros. At the heart of the group's business, leather goods and saddlery sales grew by 11.3 percent to 3.58 billion euros. Ready-to-wear and accessories achieved a 4.3 percent increase in turnover to 2.25 billion euros. Sales of perfumes and beauty products fell by 4.1 percent to 248 million euros, and watchmaking turnover decreased by 8.9 percent to 281 million euros.

This article was translated to English using an AI tool.

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