Hermes, which sells handbags for $10,000 and more, has today reported another quarter of steady revenue growth, lifted by strong sales in the US and Japan, as the group slightly reduces the pace of price hikes this year.
Sales of products including Birkin and Kelly bags, silk scarves and perfume grew by 9.8% in the fourth quarter compared to an analyst consensus compiled by Visible Alpha of 8.4% growth when adjusted for currency swings.
Sales in the Americas region, mainly the US, rose by 12.1%, beating expectations of around 9%.
"The group is going into 2026 with confidence," said CEO Axel Dumas, adding that this year's price increases would be around 5-6%, down from a 6-7% rate in 2025, attributing the slower pace to currency shifts.
Chiara Battistini, luxury equity analyst at JP Morgan, said the price increases Hermes imposes on its deep-pocketed clients this year will be key for the company's growth outlook.
Many of its rivals have tapped the brakes on price hikes due to falling sales.
Revenues in Hermes' leather division, which accounts for most of its profits, grew by 14.6% organically.
Hermes' full-year operating profit came in at €6.57 billion, reflecting a 41% profit margin, slightly ahead of estimates of a 40% margin. The company said it would pay a dividend of €18 per share.
Thanks to its ultra-wealthy clients, who are less affected by inflation, and its large order backlog, Hermes has weathered the luxury sector's ongoing slowdown better than most of its rivals.
