Paris—Strong demand for its fashions and luxury leathergoods gave Hermès a strong start. In its first quarter sales report, the luxury maison reported a 14.7% sales increase, surpassing forecasts.
Hermès said quarterly revenue was revenue was 943.5 million euros (about $1.31 billion). Yet currency exchange rates had a 40 million euros negative impact on the sales total. Analysts had expected sales of about 902 million euros.
Stronger Start than Rivals
In Japan, one of its biggest markets, sales rose 22%, helped by an increase in purchases ahead of scheduled price increases and a value added tax hike on April 1.
CEO Axel Dumas said he expected sales in Japan to be lower in the second quarter due to the higher comparative basis, but remain positive over the whole year.
Leathergoods, Hermès’ main revenue and profit contributor, posted a 15.5% sales increase on a like-for-like basis. Ready-to-wear and fashion accessories were up 19.1%.
In other regions, Asia (excluding Japan) saw sales rise by 17.7% to 329.3 million euros (12.8% at current exchange rates). Sales in China rose, too, the company reported without elaboration.
In North America, sales increased 17.9% to 150.1 million euros, and in Europe, sales rose by 7.9% to 329.2 million euros.
Dumas notes that sales had picked up in southern European regions, such as Italy, thanks to increased demand by locals and the brand’s new shop that opened last fall in Milan.
“There is surely a recovery in Italy,” Dumas told Reuters.
Analysts have been watching Hermès and its rivals closely to gauge trends in luxury spending this year. So far, Hermès once again outshone its rivals: Louis Vuitton had almost a 9% increase in the first quarter, while Gucci, owned by Kering, posted just under a 1% sales rise.
In a note to clients, UBS wrote today: “A very impressive start to the year,”