Hermès International has reported outstanding financial results for the first half of 2024, reflecting its strong market position and strategic initiatives. The company released its half-year financial report on July 25, 2024, detailing significant growth across various financial and operational metrics.

Financial Key Performance Indicators (KPIs)

For the first half of 2024, Hermès achieved a consolidated revenue of €7.504 million, representing a 15% increase at constant exchange rates and a 12% increase at current exchange rates compared to the same period in 2023. The company's recurring operating income rose to €3.148 million, accounting for 42% of sales, while net profit attributable to owners of the parent reached €2.368 million, or 31,6% of sales.

The gross margin for H1 2024 was 71%, slightly down by 1,6 percentage points from the previous year, primarily due to foreign exchange impacts and higher production costs. Operating cash flows amounted to €2.829 million, up 8% from H1 2023, demonstrating strong cash generation capabilities. The net cash position at the end of June 2024 stood at €9.477 million, reflecting a robust financial structure.

Geographical Performance

Hermès experienced growth across all geographical regions, with notable performances in:

• Asia-Pacific (excluding Japan): Revenue reached €3,521 million, up 10%, despite a high comparison base and reduced traffic in Greater China post-Chinese New Year.

• Americas: Revenue increased by 13% to €1,329 million, driven by strong momentum in the United States.

• Europe (excluding France): Revenue grew by 18% to €970 million, bolstered by local customer loyalty and dynamic tourist flows.

• France: Sales rose by 15% to €680 million, with significant contributions from local and tourist customers.

• Japan: Continued robust performance with a 22% increase in revenue to €693 million, supported by loyal local clientele.

Sales by Channel and Distribution

The company's performance across different métiers (business segments) also showcased substantial growth:

• Leather Goods & Saddlery: Achieved a 19% increase to €3,215 million, driven by new product formats and expanded production capacities.

• Ready-to-Wear and Accessories: Recorded a 15% increase to €2,162 million, with strong demand for men's and women's collections.

• Other Hermès Sectors (Jewellery, Home Products): Grew by 19% to €967 million, reflecting the brand's creativity and unique offerings.

• Perfume and Beauty: Increased by 5% to €259 million, with new product launches enhancing the segment.

• Watches: Maintained stability with a slight decline of 0% to €308 million.

ESG Achievements and Future Goals

Hermès remains committed to sustainability and the circular economy, with significant progress in its Environmental, Social, and Governance (ESG) initiatives:

• Environmental: The company has implemented measures to reduce its carbon footprint, enhance energy efficiency, and promote sustainable sourcing of raw materials. Notable achievements include the use of renewable energy sources and reducing greenhouse gas emissions across its operations.

• Social: Hermès continues to invest in its workforce, ensuring fair wages, good working conditions, and opportunities for skill development. The company also engages in various community initiatives, supporting education and cultural programs.

• Governance: Hermès maintains high standards of corporate governance, ensuring transparency, accountability, and ethical business practices. The company regularly reviews its policies to align with best practices and stakeholder expectations.

Future Outlook and Observations

Hermès is poised to continue its growth trajectory, supported by its unique business model, strategic investments, and unwavering commitment to quality and exclusivity. The company's medium-term goal remains ambitious, targeting continued revenue growth at constant exchange rates despite global economic and geopolitical uncertainties.

Hermès' financial results for the first half of 2024 reflect its resilience and strategic foresight. The company's ability to adapt to market changes, invest in growth opportunities, and uphold its brand values positions it well for sustained success. Further analysis could delve into potential risks and opportunities in emerging markets, the impact of digital transformation on luxury retail, and the long-term implications of ESG initiatives on the company's brand equity.

Read the full report here Hermès International.

Cover Image Courtesy: Hermès Website