Luxury goods seller Hermès International on Tuesday said its sales continued to grow in the third quarter, on the back of “sustained momentum in Asia and in the Americas,” despite fears around a slowdown in the wider luxury sector.
The French fashion house reported a 16% uptick in third quarter sales to €3.36 billion ($ 3.58 billion). A selection of five analysts polled by FactSet had predicted the company would generate sales worth €3.31 billion.
Shares in Hermès RMS, +2.34% increased 3% in trading on Tuesday morning, with stock in the firm having risen by 34% over the past 12 months. Shares in luxury goods sellers dropped earlier this month after LMVH Moët Hennessy Louis Vuitton MC, +1.58% posted underwhelming results.
Hermès instead posted double-digit growth across all regions and segments of its business, including a 21% uptick in sales from its division covering Asia excluding Japan, which accounts for 48% of its revenues.
The Parisian firm’s results are set to assuage investors’ fears about a downturn in the market for luxury goods, amid concerns about the health of China’s economy and signs the boom in demand for jewelry and expensive handbags may soon be coming to an end.
Analysts at Citi said Hermès benefited from having a “high share of loyal, higher-end” customers who are less impacted by inflation, as well as from their “below industry-average exposure to tourist demand” amid a slower-than-expected recovery in China’s tourism sector.
The situation saw Hermès post what Citi’s analysts described as “industry-beating growth” in the third quarter, despite a modest slowdown in sales from its China business compared to what the fashion house itself described as an “exceptional” performance from the Asian segment in the third quarter of 2022.
Hermès executive chairman Axel Dumas said: “The solid performance in the third quarter reflects the desirability of our collections all over the world, with still a sustained momentum in Asia and in the Americas.”