Hermes beats expectations and shines in Paris, drags luxury in Europe

(Il Sole 24 Ore Radiocor) - Hermes's better-than-expected accounts boosted luxury goods across Europe. On the Paris Stock Exchange, the Birkin maison gained ground after climbing more than 2% in the early part of the session. Also up were Lvmh and Kering, which had its target price raised to €255 (from €245) with an "Underweight" rating from Barclays. In Milan, among the best stocks of the FTSE MIB is Brunello Cucinelli , which brought forward to 18 February the board meeting to approve the financial statements (initially scheduled for 12 March). Purchases were also made on Moncler and, off the main list, Salvatore Ferragamo, in the aftermath of the denial about the Florentine fashion house changing its creative direction. Finally in London, Burberry is making progress.

Encouraging purchases on luxury goods are, as mentioned, the signs that emerged from Hermes' 2025 accounts, judged 'solid' by analysts, despite the drop in net profit to EUR 4.5 billion (-1.72%). Weighing on the result, the company explained, was mainly the exceptional tax for large companies introduced last year to consolidate French public finances. Without this exceptional contribution, 'representing 330 million euro in 2025', net profit would have been 5.5% higher than in 2024, Hermes director Axel Dumas pointed out during a meeting with journalists. The group's sales increased by 5.5% to 16 billion euro, with good results in all geographic areas and particularly in America (+7.3%). For 2026, the maison's director predicts 'continued strong growth in the United States and a stable situation in Europe'. In addition, a dividend of EUR 18 per share will be proposed at the shareholders' meeting on 17 April, compared to EUR 16 in 2024.

Hermes' results 'exceeded expectations', according to Barclays, which particularly appreciates 'organic revenue growth in the fourth quarter (+9.8% to 4.09 billion)'. In addition, write the merchant bank's experts, 'FY2025 EBIT exceeded estimates, with a margin of 41% versus consensus of 39.9%'. Rbc analysts are also on the same page, highlighting the solidity of Hermes' performance in light of 'the current luxury environment'. Most of its competitors in fact "continue to face a slowdown in demand for luxury goods". In contrast, the French maison "posted a broad strength across all divisions and regions". Overall, Citi adds, "the improvement in sales performance in the crucial fourth quarter should help improve sentiment after a period of limited momentum for both Hermes and luxury". In light of this, say the experts, "a potential return to double-digit growth in 2026 improves investment prospects".