The French luxury group Hermès has reported a stellar performance in 2023, with record sales and profit, driven by strong demand for its products across all regions and categories.
Sales up 21 percent at constant exchange rates
The company’s consolidated revenue amounted to 13.4 billion euros in 2023, up 21 percent at constant exchange rates and 16 percent at current exchange rates compared to 2022. The growth was consistent throughout the year, with sales increasing 18 percent at constant exchange rates in the fourth quarter.
All the geographical areas posted a solid performance, with growth of around 20 percent. Asia excluding Japan rose 19 percent, Japan increased 26 percent, America reported a 21 percent rise, and Europe excluding France and France both grew 20 percent.
The company also expanded and renovated its store network, opening new stores in China, Japan, the United States, and Switzerland, among others.
Profit up 28 percent
The company’s recurring operating income amounted to 5.7 billion euros, representing 42.1 percent of sales. This was an increase of 20 percent compared to 2022, reflecting the company’s resilience and profitability.
The net profit group share reached 4.3 billion euros, an increase of 28 percent. This was the highest net profit ever recorded by the company, surpassing the previous record of 3.8 billion euros in 2019.
The company’s board of directors will propose a dividend of 15 euros per share at the general meeting on April 30, 2024.
All categories performed well
The company’s growth was driven by the success of all its product categories, especially the leather goods and saddlery, the ready-to-wear and accessories, and the other Hermès sectors, which include jewellery and homeware.
The leather goods and saddlery category, which accounts for more than half of the company’s sales, grew 17 percent, thanks to the popularity of the iconic bags such as the Birkin, the Kelly, and the Constance, as well as the new creations such as the Mosaïque, the Perspective Cavalière, and the Kelly Picnic.
The ready-to-wear and accessories category, which includes shoes, belts, hats, gloves, and scarves, grew 28 percent, reflecting the creativity and diversity of the collections designed by Nadège Vanhee-Cybulski for women and Véronique Nichanian for men.
The other Hermès sectors category grew 26 percent, boosted by the strong performance of the jewellery and homeware segments, which showcased the craftsmanship and innovation of the company.
The silk and textiles category grew 16 percent, thanks to the renewed demand for the emblematic silk scarves and ties, as well as the new products such as the silk masks and the silk twillys.
The perfume and beauty category grew 12 percent, driven by the success of the Terre d’Hermès, the Twilly d’Hermès, and the Un Jardin sur la Lagune fragrances, as well as the launch of the Rouge Hermès lipstick line.
The watches category grew 23 percent, benefiting from the launch of the new H08 watch, as well as the strong sales of the Arceau, the Cape Cod, and the Slim d’Hermès models.
Outlook for 2024
The company said that it remains confident in its long-term prospects, despite the uncertainties and challenges posed by the COVID-19 pandemic, the geopolitical tensions, and the currency fluctuations.
The company said that it will continue to invest in its production capacity, its distribution network, and its digital transformation, while maintaining its high standards of quality and creativity.
The company also said that it will pursue its responsible and sustainable development strategy, which aims to preserve the environment, support the local communities, and respect the human and animal welfare.
