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Diving briefs:
Hermes reported Revenues for 2024: 15.2 billion eurosor about $15.9 billion, marking a 13% increase from the previous year, according to a press release on Friday. In the fourth quarter, the company saw revenue growth of approximately 4 billion euros.
The French-based luxury home grew in all sectors in 2024, but fell 5.6%, with the exception of the watch business. Leather products and saddlery grew by 16.4%, while ready-made and accessories increased by 13.6%.
Hermes also profited in each region, with Europe increasing by 16% and Asia increasing by 7.3% year-on-year. However, the company has seen growth of nearly 110% in the Middle East region and has recently become a majority shareholder of UAE retail.
Dive Insights:
Including some high-end companies Kering and LVMHHermes is taking on the challenge as revenues are falling sharply. Slowing down luxury fashion A story of continuous revenue growth over the past few quarters.
According to Yanmei Tang, analyst at Third Bridge, Hermes could continue to outperform due to its unique business model, including pricing power, rarity exclusivity and control over its distribution. The brand’s customer base is loyal and wealthy, and resilient despite the economic downturn, she said.
“Important products like Birkin and Kelly remain strong revenue drivers as they account for 40-50% of leather products sales, but Hermes faces the risk of overrely relying on these models. “We’re doing this,” Tan said in a statement. “Expanding the leather lineup while maintaining the brand’s exclusiveness is key to maintaining momentum.”
In a call with investors, Chair Axel Dumas described Hermes client as a “very loyal consumer base.”
Dumas was asked how Hermes reacted Tariffs proposed under the Trump administration In the US, the company produces about 75% of its products in France, but sells them all over the world. Dumas said customization obligations have risen and fallen over the company’s 90-year history. When customization operations go up, Hermes raises prices to make up for it.
“Our American customers remain loyal and those who think it’s too expensive will benefit from Paris’ hotel infrastructure,” Dumas said. “I regret this, but I’m not particularly worried.”
In its revenue release, Dumas said the company’s 2024 results demonstrated the strength of its business model in an uncertain economy.
Due to the increased revenue results, Luxury House has also announced that it will receive a bonus of 4,500 euros to all employees around the world. The company employs approximately 25,000 people.
Hermes said it did not specify an amount for its 2025 financial outlook but confirmed “ambitious targets for revenue growth at constant exchange rates.”
