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Hermès International: First Quarter 2024 Revenue
Quarterly information report as at the end of March 2024
Solid sales growth in the first quarter
(+17% at constant exchange rates and +13% at current exchange rates)
Paris, 25 April 2024
The group’s consolidated revenue amounted to €3,805 million in the first quarter of 2024, up 17% at constant exchange rates and 13% at current exchange rates, with a solid activity in all geographical areas.
Axel Dumas, Executive Chairman of Hermès, said: “The solid sales growth in the first quarter 2024 reflects the loyalty of our clients worldwide, the strength of the group’s artisanal model and the desirability of our creations in a more complex environment. Hermès pursues its strategy based on exceptional know-how, the finest materials and uncompromising quality.”
Sales by geographical area at the end of March
(at constant exchange rates unless otherwise indicated)
At the end of March 2024, all the geographical areas posted double-digit growth. The network
continued its development, with store openings and extensions.
Asia excluding Japan (+14%) pursued its growth in all the countries of the region.
The desirability of the objects and the house’ value strategy enabled to offset softer traffic in Greater China following the Chinese New Year. In January, the Wuxi store, the thirty-fourth Hermès address in China, opened in the eastern province of Jiangsu.
Japan (+25%) recorded an exceptional growth, thanks to the loyalty of its local customers.
A new store was inaugurated in February in the Azabudai Hills district of Tokyo, amidst welcoming and luminous interiors.
Americas (+12%) posted a sustained growth, thanks to the momentum in the United States. In March, the travelling exhibition Hermès in the Making, which showcased the know-how of the artisans, was presented in Mexico City, and the Parade event, around the Home universe, was hosted in Los Angeles.
Europe excluding France (+15%) and France (+14%) achieved solid growth, despite high comparison bases. In France, the 14th edition of the Saut Hermès was successfully held at the Grand Palais Éphémère in Paris. Furthermore, our leather artisans, goldsmiths and the École Hermès des savoir-faire apprentice training centre shared their passion for gesture and the finest materials at the Entrez en matières exhibition in Paris during the European Artistic Crafts Days (EACD).
Sales by sector at the end of March
(at constant exchange rates unless otherwise indicated)
At the end of March 2024, all the métiers confirmed their solid momentum and achieved good performances.
The Leather Goods and Saddlery métier (+20%), for which the demand is very sustained, saw a strong increase. The collections have been enriched with new models, including Arçon, the Haut à courroies Multipockets or Constance Élan. Production capacities continue to grow with four leather goods workshop projects scheduled over the next four years: Riom (Puy-de-Dôme) in 2024, l’Isle-d’Espagnac (Charente) in 2025, Loupes (Gironde) in 2026 and Charleville-Mézières (Ardennes) in 2027, which will reinforce the nine centres of expertise located throughout France. Hermès reinforces its local anchoring in France and develop employment and training.
The Ready-to-Wear and Accessories sector (+16%) pursued its momentum. The Spring-Summer 2024 ready-to-wear collections were given a great welcome. The 24, faubourg Saint-Honoré store in Paris presented the women’s Hors-Série collection, composed of exceptional pieces. Demand was robust for fashion accessories and shoes, with models displaying the abundance of the house’s savoir-faire.
The Silk and Textiles sector (+8%) recorded sustained growth, supported by the constantly renewed creation of men’s and women’s collections based on a variety of formats and outstanding materials.
The Perfume and Beauty sector (+4%) compared itself with a first quarter 2023 which benefitted from the launch of the eau de toilette Un Jardin à Cythère. The H24 Men’s line was enriched with Herbes Vives, and the Hermessence collection, which celebrates 20 years this year, unveiled a new eau de parfum Oud Alezan. In February, Hermès Beauty launched a new limited edition of Rouge Hermès and nail enamels.
The Watches métier (+4%) continued its development. At the Geneva Watches & Wonders exhibition held in mid-April, Hermès presented Hermès Cut,a new creationfeaturing manufacture movement.
The Other Hermès sectors (+25%), which include Jewellery and Home universe, pursued their strong growth, highlighting the full creative strength and singularity of the house, with, for example, new jewellery creations based on the Chaîne d’ancre, the equestrian universe or the Kelly lock. In January, the Tressages équestres tableware service was presented in Paris.
A responsible, sustainable model
True to the house’s employment model and the desire to share the fruits of its growth with all those who contribute to it on a daily basis, at the beginning of 2024, the group distributed over €200 million in respect of 2023 incentive schemes and profit-sharing, and almost €100 million in group bonuses to all employees worldwide, in addition to the 6th free share plan announced last June. Hermès also continued the acceleration of recruitment.
Global warming, and the protection of the biodiversity are matters of concern, addressed by the group through its climate strategy, its concrete initiatives for responsible supply chains and its policies on preserving natural resources.
In line with its commitment to a carbon trajectory of 1.5°C, validated by the SBTi (Sciences Based Targets initiative), the house continued to roll out its decarbonisation plans across all the business lines, through sobriety programmes on the value chain and the use of low-carbon energies. Hermès, engaged since 2012 in carbon offset projects with high social and environmental value, hosted the 2024 edition of the Livelihoods day at its site in Pantin, in March. The event was attended by over 30 NGOs and more than 1,000 participants representing some twenty different nationalities with the aim to support innovative solutions for the climate, communities and biodiversity.
Other highlights
At the end of March 2024, currency fluctuations represented a negative impact of €148 million on revenue.
Hermès International did not redeem any shares, excluding transactions completed within the framework of the liquidity contract.
As announced during the annual results, Hermès became a majority shareholder in January alongside its partner in the Middle East in the retail activities located in the United Arab Emirates. As a reminder, the impact resulting from this acquisition of a majority stake will not be significant on the 2024 consolidated financial statements.
Outlook
In the medium-term, despite the economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates.
The group has moved into 2024 with confidence, thanks to the highly integrated artisanal model, the balanced distribution network, the creativity of collections and the loyalty of clients.
Thanks to its unique business model, Hermès is pursuing its long-term development strategy based on creativity, maintaining control over know-how and singular communication.
For 2024, the theme will be In the Spirit of the Faubourg. This place, the fruit of Émile Hermès’ dream, is the beating heart of the house. It accompanies Hermès everywhere and inspires the effervescence and joyful spirit so dear to the house.
The press release on revenue at the end of March 2024 is available
on the group’s website: https://finance.hermes.com.
Upcoming events:
• 30 April 2024: General meeting of shareholders
• 25 July 2024: publication of H1 2024 results (after market)
• 24 October 2024: Q3 2024 revenue publication
INFORMATION BY GEOGRAPHICAL ZONE (a)
|
| 1st quarter | Evolution /2023 | ||
In millions of Euros |
| 2024 | 2023 | Published | At constant exchange rates |
France |
| 312 | 273 | 14.3% | 14.3% |
Europe (excl. France) |
| 444 | 391 | 13.5% | 14.6% |
Total Europe |
| 757 | 664 | 13.9% | 14.5% |
Japan |
| 357 | 322 | 10.8% | 25.2% |
Asia-Pacific (excl. Japan) |
| 1,920 | 1,763 | 8.9% | 13.9% |
Total Asia |
| 2,277 | 2,084 | 9.2% | 15.7% |
Americas |
| 614 | 556 | 10.3% | 11.8% |
Other |
| 158 | 75 | 111.0% | 112.6% |
TOTAL |
| 3,805 | 3,380 | 12.6% | 17.0% |
(a) Sales by destination.
INFORMATION BY SECTOR
|
| 1st quarter | Evolution /2023 | ||
In millions of Euros |
| 2024 | 2023 | Published | At constant exchange rates |
Leather Goods and Saddlery (1) |
| 1,628 | 1,409 | 15.5% | 20.3% |
Ready-to-wear and Accessories (2) |
| 1,061 | 950 | 11.7% | 15.9% |
Silk and Textiles |
| 242 | 234 | 3.4% | 7.9% |
Other Hermès sectors (3) |
| 505 | 421 | 20.0% | 24.5% |
Perfume and Beauty |
| 130 | 126 | 3.0% | 4.3% |
Watches |
| 166 | 166 | 0.1% | 4.3% |
Other products (4) |
| 74 | 74 | (0.8)% | 1.4% |
TOTAL |
| 3,805 | 3,380 | 12.6% | 17.0% |
(1) The “Leather Goods and Saddlery” business line includes bags, riding, memory holders and small leather goods.
(2) The “Ready-to-wear and Accessories” business line includes Hermès Ready-to-wear for men and women, belts, costume jewellery, gloves, hats and shoes.
(3) The “Other Hermès business lines” include Jewellery and Hermès home products (Art of Living and Hermès Tableware).
(4) The “Other products” include the production activities carried out on behalf of non-group brands (textile printing, tanning…), as well as John Lobb, Saint-Louis and Puiforcat.
REMINDER
2023 KEY FIGURES
In millions of euros | 2023 | 2022 |
|
|
|
Revenue | 13,427 | 11,602 |
Growth at current exchange rates vs. n-1 | 15.7 % | 29.2% |
Growth at constant exchange rates vs. n-1 (1) | 20.6 % | 23.4% |
|
|
|
Recurring operating income (2) | 5,650 | 4,697 |
As a % of revenue | 42.1% | 40.5% |
|
|
|
Operating income | 5,650 | 4,697 |
As a % of revenue | 42.1% | 40.5% |
|
|
|
Net profit – Group share | 4,311 | 3,367 |
As a % of revenue | 32.1% | 29.0% |
|
|
|
Operating cash flows | 5,123 | 4,111 |
|
|
|
Operating investments | 859 | 518 |
|
|
|
Adjusted free cash flow (3) | 3,192 | 3,405 |
|
|
|
Equity – Group share | 15,201 | 12,440 |
|
|
|
Net cash position (4) | 10,625 | 9,223 |
|
|
|
Restated net cash position (5) | 11,164 | 9,742 |
|
|
|
Workforce (number of employees) (6) | 22,037 | 19,686 |
(1) Growth at constant exchange rates is calculated by applying the average exchange rates of the previous period to the current period’s revenue, for each currency.
(2) Recurring operating income is one of the main performance indicators monitored by the group’s General Management. It corresponds to the operating income excluding non-recurring items having a significant impact likely to affect the understanding of the group’s economic performance.
(3) Adjusted free cash flow corresponds to the sum of operating cash flows and change in working capital requirement, less operating investments and repayment of lease liabilities, as per IFRS cash flow statement.
(4) The net cash position includes cash and cash equivalents on the asset side of the balance sheet, less bank overdrafts presented within the short-term borrowings and financial liabilities on the liability side of the balance sheet. It does not include lease liabilities recognised in accordance with IFRS 16.
(5) The restated net cash position corresponds to the net cash position, plus cash investments that do not meet IFRS criteria for cash equivalents as a result of their original maturity of more than three months, minus borrowings and financial liabilities.
(6) The headcount relates to employees on permanent contracts and those on fixed-term contracts lasting more than 9 months.
The press releases and the presentations of the results are available on the group’s website: https://finance.hermes.com
The consolidated financial statements are available at the following address
https://finance.hermes.com and on the AMF website: www.amf-france.org
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