Hermès, first quarter revenues rise to 4.1 billion (+7%)

Two categories drove revenue growth: leather goods and saddlery, the heart of Hermès production, which posted +10%, and clothing and accessories (+7%). Jewellery and silk (another key element of Hermès production and identity: scarves) also grew, while the perfume segment was stable and watchmaking posted a 10% drop in revenues.

The objectives, despite the challenging period, remain growth: in the medium term, despite global economic, geopolitical and monetary uncertainties, the group confirms an ambitious turnover growth target at constant exchange rates.

"Hermès confirms ambitious growth targets for the coming quarters, while maintaining a cautious approach in light of geopolitical risks and possible spillovers to financial markets. Against a backdrop of high volatility, the stock remains one of the "Best Ideas" for Q2 2025, thanks to its resilience in both expansionary and recessionary phases," highlights Bernstein.

"A number of key points emerge from the conference call with analysts that confirm the confident approach of Hermès' management, despite a more moderate first quarter 2025 than in previous quarters," writes Carole Madjo, European luxury goods & specialty retail at Barclays, who adds: "On the issue of new import duties in the US, management confirmed that the impact will be fully offset through targeted price increases across all product categories, without extending price increases to other markets."

On the current business front, Hermès showed unchanged trends in April compared to March, which had been the best month of the quarter thanks to a normalisation of inventories in the US, after slowdowns in January.The company confirmed its guidance for the full year 2025, emphasising that the factors that weighed in the first quarter - in particular the difficult comparison basis in China and critical logistics issues in the US - are set to recede in subsequent quarters.

Hermès forecastslow double-digit growth for the leather goods division in 2025, driven by: mid-single-digit price increases and mid-single-digit volume growth.

"The group reported growth consistent with analysts' estimates, confirming the strength of the brand even in an uncertain macro environment. According to management, there were no significant changes in consumption trends or customer habits globally. In China, despite the unfavourable comparison with the previous year, sales have remained almost stable year-on-year, and the group is optimistic in light of the recent stimulus measures launched by Beijing," points out Luca Solca of Bernstein, continuing: "In North and South America - including the United States, Mexico, Canada and Brazil - Hermès recorded double-digit growth, with the USA particularly strong in March thanks to the replenishment of stocks, after a phase of under-supply. The mature European markets also continued to grow in volume, driven by tourist demand, especially from US and Middle Eastern customers.

On the stock and price front Solca points out: 'Management has emphasised that the impact of low stocks in the US is limited to the first quarter, and that the situation is now almost normalised. To counter the effects of the new import duties, Hermès will apply a price increase in the US from 1 May, while price rises of 6-7% have already been introduced at the beginning of the year in all markets,' adding that 'A negative impact on the income statement is expected due to the weakness of the dollar, but the company remains aligned with its targets in terms of both sales and margins in all regions, highlighting in particular the loyalty of local customers. Bernestein's rating is 'outperform' with a price target of EUR 2,600.