Hermès has recorded its worst quarter in years. The slowdown in China is taking its toll
The clothing and accessories division is down, whilst leather goods are up by 10.8 per cent, though they are under pressure from the second-hand market. Sales are flat in China, ‘a difficult market’
For the first time in the last six years, Hermès has seen a slowdown in its growth. In the third quarter of 2026, the French group reported revenue of €4.10 billion, up 4.3 per cent on the same period the previous year, but below analysts’ expectations. Sales of ready-to-wear and accessories (which account for around a quarter of total revenue) were down by 2 per cent, marking the first decline in years. Sales in the leather goods division fared better, rising by 10.8 per cent, but analysts suggest this is overshadowed by the second-hand market, where Hermès’s iconic bags, such as the Birkin and the Kelly, are highly sought-after.
Whilst Europe and the United States were the markets with the strongest performance, China recorded no growth. Hermès’s CFO, Eric du Halgouet, emphasised that the Chinese market is ‘very challenging’, although he remains confident about the long-term outlook. According to the executive, the macroeconomic environment in China is characterised by a crisis in the property sector and struggling financial markets, factors compounded by a recent government initiative to tax assets held abroad, which is penalising the wealthiest clients.
In the Asia-Pacific region – which accounts for around 40 per cent of total turnover, excluding Japan, the group’s largest market – Hermès’s sales remained stable. Since the start of the year, Hermès’s share price has fallen by around 40 per cent, marking its worst performance since the company was listed on the Paris stock exchange in 1993.
The first half of the year ended with a 6 per cent increase in revenue, driven by the United States (+15 per cent) and Japan (+11 per cent); in Asia-Pacific, growth stood at 2 per cent.
