Luxury giant Hermès International SCA saw its shares fall by as much as 5% in early Paris trading after reporting slightly weaker-than-expected sales growth in its key leather goods division — the main driver of its profits.
Revenue in the unit rose 13.3% in the third quarter, narrowly missing analysts’ forecasts of 13.8%, according to data compiled by Bloomberg. The modest shortfall dampened investor sentiment, particularly after rival LVMH’s strong earnings last week reignited optimism across the luxury sector.
“Shares might be under pressure near term, given the slight miss in key leather goods division, and elevated buy-side expectations reflecting more positive sentiment in luxury recently,” said Piral Dadhania, analyst at RBC Capital Markets.
Despite the disappointment, Hermès continued to show resilience amid a broader slowdown in luxury spending. Its total third-quarter revenue rose 9.6% at constant exchange rates, slightly above the 9.3% consensus estimate.
The U.S. market was a bright spot, with sales surging 14.1%, outperforming expectations despite tariff concerns. Chief Financial Officer Eric du Halgouet said the brand has not observed any major change in consumer behavior this quarter, adding that the U.S. growth was broad-based across categories and store visits remained strong.
Hermès — famed for its exclusive Birkin and Kelly bags — continues to rely on scarcity and craftsmanship to sustain demand, shielding itself from the volatility affecting aspirational shoppers since the post-pandemic luxury boom cooled.
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