Hermès: Third quarter results

The strong sales growth in the group’s stores (+14% at constant exchange rates) confirms the trends seen over the first six months of the year.

The robust growth in the third quarter (+18% at current exchanges rates and +15% at constant exchange rates) benefited from the sustained momentum in all the geographical areas.

At the end of September 2019, all the geographical areas posted an increase in revenue:

• Asia excluding Japan (+19%) gained from an outstanding performance in mainland China, and from strong growth in the area, despite the impact of events in Hong Kong. Sales increased in all countries in the area. In China, Hermès opened its 26^th store in Xiamen in July, and continued to successfully develop the new commercial platform hermes.cn. The Siam Paragon store reopened in Bangkok.
• Japan (+12%) confirmed its sound momentum and benefited from early purchases linked to higher VAT. The Iwataya store in Fukuoka and the Nihombashi store in Tokyo were extended and renovated.
• America (+10%) posted strong growth, especially in the United States. A new store opened in Vancouver in Canada in September, and the Masaryk store in the centre of Mexico reopened in July.
• Europe excluding France (+9%) and France (+6%) achieved sound performances, with in particular robust growth in the UK, in Italy and in the Parisian stores.
  
  

All the business lines reported growth at the end of September:

• Growth in Leather Goods and Saddlery (+12%) was sustained with the strength of the Hermès’ classics and their variations in new materials such as wicker for the Kelly Picnic, other recent models such as the Mosaïque and 24/24 bags and newcomers like the Twins bag. Production capacities continued to increase, with the announcement of a new leather workshop in the Ardennes region by 2022. With the opening of the Guyenne and Montereau workshops, scheduled for completion by 2020, and the Louviers workshop by 2021, the new site in Ardennes will be the 21^st leather workshop of the group.
• The Ready-to-Wear and Accessories division (+17%) pursued its strong momentum both for the women and men ready-to-wear and for accessories and shoes. The Women’s 2020 Spring-Summer fashion show, held at the Paris Tennis Club in September, received a warm welcome.
• The Silk and Textiles business line (+8%) posted an increase, with collections that combine a diversity of materials with creative design. The 2019 Spring-Summer collection met a great success.
• Perfumes (+3%) are increasing, despite comparison bases that incorporated the launches of Terre d’Hermès Eau intense vétiver in 2018 and Twilly d’Hermès in 2017. The Twilly Eau poivrée perfume variation was launched in August.
• The Watches business line (+14%) achieved a good performance.
• Other Hermès business lines (+22%), which encompass Jewellery, Art of Living and Hermès Table Arts, recorded strong growth, driven particularly by Jewellery.

In the medium term, despite growing economic, geopolitical and monetary uncertainties around the world, the Group confirms an ambitious goal for revenue growth at constant exchange rates.

November 21, 2019