Hermès sales rise as luxury group weathers slowdown in Middle East
Demand in Europe, US and Japan helps offset impact of US-Iran war
Demand for high-end handbags and silk scarves helped sales at luxury group Hermès rise in the second quarter, as demand in Europe, the US and Japan helped offset a slowdown in the Middle East.
The Paris-listed leather goods specialist reported sales of €4.1bn in the second quarter at constant exchange rates, up 7 per cent compared with the previous year and in line with analysts’ forecasts.
Hermès’ second-quarter performance marked a modest acceleration for the maker of Birkin bags, after the sharp impact from the fall in tourist shopping in the Gulf in March.
Hermès is usually viewed as one of the most resilient names in luxury thanks to demand that outstrips supply for its hit bags and a wealthy client base.
It caps a mixed quarter for luxury: Richemont posted a blockbuster beat on the strength of its jewellery brands, including Cartier, while LVMH and Kering showed improved trends from a lower base.
“In the first half of 2026, Hermès delivered a solid performance . . . we look to the second semester with confidence,” said executive chair Axel Dumas.
Shares at Hermès were down 3.5 per cent on Wednesday morning, while Kering jumped as much as 11 per cent after it returned to growth for the first time in three years. LVMH shares rose 2.4 per cent and Richemont was flat.
Recurring operating income at Hermès for the first half of 2026 was €3.4bn compared with €3.3bn in the first half of 2025, at a margin of 41 per cent.
Dumas said the group did not see a “tremendous improvement” in China, a key market for luxury that is weathering a multiyear slowdown. However, he did announce that Hermès would present its first haute couture collection in 2027, joining houses such as Chanel and Dior in this rarefied field.
“Hermès delivered a solid second-quarter sales performance with group revenue growth accelerating [though] the quality of growth was mixed,” wrote analysts at Deutsche Bank, noting the company had generated “stronger than expected profitability”.
All markets except the Middle East rose in the three months to the end of June, where trading has been affected by the conflict between the US and Iran. Sales in the Middle East region fell 2.4 per cent in the period, an improvement on the first quarter when sales fell 5.9 per cent.
Eric du Halgouët, executive vice-president for finance, said the conflict had knocked 1.5 percentage points off group sales growth in the first half.
Sales in Japan and the Americas both increased by double digits, as did sales at Hermès’ biggest division, which sells leather goods, rising 10.2 per cent in the quarter.
However, revenues from Hermès-branded perfume and beauty products fell 9.5 per cent in the second quarter, raising questions about its appeal among aspirational middle-class shoppers.