The Tamesis
Hermès continues to deliver. On Thursday, the French luxury brand announced that sales in the fourth quarter of 2025 ended December 31 increased by 9.8% year-on-year at constant exchange rates to 4.1 billion euros.
This was above the consensus estimate of 8.4% growth and was a slight acceleration from the previous quarter, which grew 9.6%. “The situation is stable,” Bernstein luxury goods analyst Luca Solca wrote in a note. “Growth in the quarter was driven by sequential acceleration in Asia Pacific (excluding Japan) and continued strong momentum in the Americas.”
For the whole year of 2025, Hermès sales will increase by 8.9% year-on-year, reaching 16 billion euros. The positive results pushed shares up 2% in early trading.
Hermès continues to outperform most luxury goods rivals. LVMH’s fourth-quarter sales rose 1% to about 22.7 billion euros, although its fashion and leather goods divisions fell 5%. Kering Group’s sales during the same period fell 3% year-on-year to 3.9 billion euros. Richemont Group’s third-quarter sales increased by 11% to 6.4 billion euros.
Hermès’ main growth categories were leather goods and saddlery (up 14.6%); ready-to-wear and accessories (up 7.1%); and its “other” product line, including jewelry and homewares (up 12.9%). Watch sales rose 3.2% in the fourth quarter, while perfume and beauty sales fell 14.6%.
Hermès said growth was driven by the Americas (up 12.1%), Europe (up 9.5%), Japan (up 11.2%) and “other regions” including the Middle East (up 13.5%). At the same time, sales in the Asia-Pacific region increased by 8% year-on-year.
In China, unlike many of its peers, Hermès has continued to expand during a downturn in the luxury goods industry. “In China, we see growth: leather goods are doing very well and are playing a pillar role; and the other two best-performing business lines are women’s ready-to-wear and jewelry,” Executive Chairman Axel Dumas told analysts during an earnings call at the Hermès flagship store on Rue de Sèvres in Paris. Hermès currently has 32 boutiques in China. “[The store network] “Our aim is to grow a little bit at our own pace,” he added. New stores elsewhere this year will open in June, including London’s New Bond Street.
When asked what he thought about competition from local brands in the Chinese market, Dumas said: “I think the more success we have with different brands in our industry, the better. So I think it’s interesting that China is developing brands in a completely different area than we are – in jewelry, the old shops are very different. It’s a different know-how, very ancestral craftsmanship, which is very interesting. Or take LaBuBu as an example, I read a story in LaBuBu. new york times Ask Labubus if he can exist without Birkin. That’s interesting – I don’t know the answer. So I think this dynamic in China is positive rather than worrying. “
The executive said plans to launch Hermès haute couture were “making progress.” “We’ve hired the studio. We’ll be ready when it’s ready. What I’ve seen is amazing – I’m excited,” Dumas said.
When asked about the poor performance of the beauty business, Dumas noted that the challenge “is in the fragrance itself, not cosmetics and beauty.” “Quite frankly, I think there are things we can do better and we’re working on it,” he said. “Unlike others in the group, [this business] Much depends on [wholesale] Distribution, not everyone performs as well as Hermès. At times, our partners prefer to buy less to manage inventory, so we will continue to aggressively pursue our fragrance development strategy, which is to expand to the scale required to create an autonomous subsidiary and launch in three categories: fragrance, cosmetics and soon skincare. ” Dumas did not provide a timetable for the launch of skin care products or couture.
The company also announced plans to increase prices by an average of 5% to 6% in 2026, taking into account rising production costs and offsetting adverse currency effects. The company had previously raised prices for 2025 by 6% to 7%. “Hermès is well positioned for 2026,” Citi managing director Thomas Chauvet wrote in a note.
