Hermès distributes goods, yet the stock value decreases
Hermès Maintains Growth Amid Luxury Market Slowdown
In a time of economic uncertainty and a slowdown in the luxury market, French luxury goods company Hermès has managed to report a significant increase in sales for the first half of 2025. The company's sales rose by seven percent to €8.03 billion, with revenue increasing by nine percent in currency-neutral terms.
The fashion and leather goods business saw a 15 percent increase in sales, while the watch segment experienced a nearly six percent decline. However, the perfume category had a seven percent drop in sales. Despite these variations, Hermès confirmed its annual forecast, expecting to further increase sales at constant exchange rates.
The net profit for the first half of the year fell by five percent year-on-year to €2.25 billion. Despite this decline, the company's operating profit rose by nearly six percent to €3.3 billion.
Hermès has implemented several key strategies to navigate the crisis better than its competitors. The company has focused on strategic price increases in the U.S. to offset tariffs while preserving brand exclusivity and margins. Hermès passed on Trump-era tariff costs directly to consumers in 2025, avoiding regional price disparities and reinforcing its premium positioning.
The company has also pursued selective global expansion and store management, focusing on high store productivity and avoiding market flooding, particularly in China and Asia. This disciplined retail footprint and limited promotional activity helped Hermès avoid fatigue seen in competitors.
Hermès has invested in production capacity and supply chain security to sustain long-term growth momentum, along with maintaining an exclusive distribution network. The company has also leveraged brand creativity and events to deepen customer engagement and reinforce brand narrative.
Geographic diversification has been another key strategy for Hermès. The company has seen strong growth in the Americas, Europe, and Japan, offsetting slower growth in other Asian regions. The Americas led with a 12% increase thanks to strong U.S. performance, while Europe grew 11%, supported by local clients and tourists.
Internal stability has also played a crucial role in Hermès' success. The company's consistent leadership has enabled the execution of targeted product launches and the deepening of client relationships, positioning Hermès to gain market share even in a slow-growth environment.
These combined approaches have allowed Hermès to report a 7%-9% revenue increase in the first half of 2025 amid broader luxury market softness. The company's model shows resilience owing to pricing power, brand exclusivity, production investment, and geographic diversification in challenging economic times.
Despite the economic crisis, an original Birkin bag was auctioned in Paris for €8.58 million, demonstrating the strength of Hermès' business model. DER AKTIONÄR remains bullish on Hermès, seeing it as a top pick in the weakening luxury sector. The stock symbol for Hermès is WKN: 886670.
However, it's worth noting that a potential conflict of interest was disclosed, as the board and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has entered into positions in the financial instruments of Hermès or related derivatives.
In conclusion, Hermès' strategic moves and resilient business model have enabled the company to maintain growth amid the luxury market slowdown and economic uncertainty.
- Hermès, despite the luxury market slowdown and economic uncertainty, has invested in its manufacturing capabilities and supply chain security to sustain long-term growth momentum and strengthen its business model.
- In the first half of 2025, Hermès reported a 7%-9% increase in revenue, demonstrating the effectiveness of its strategic price increases, selective global expansion, and brand investments in a challenging economic environment.
