Hermès Q3 growth slows to 4.3% as Asia outside Japan stagnates

Hermès International reported third-quarter revenue of 4.1 billion euros, up 4.3 percent at constant currency. The figure fell short of the 5.2 percent consensus among analysts, and it marked a sharp slowdown from the 9.6 percent growth the same quarter delivered a year earlier.

The French maison, known for its leather goods, fashion accessories, ready-to-wear and fragrances, saw strong demand in the Americas and Europe offset stagnation in China. Bernstein analyst Luca Solca said the group "continues to suffer a difficult trading environment overall."

Chief executive Axel Dumas struck a longer view in his statement. "Despite a complex environment, Hermès continues its profitable growth and maintains its course," he said, adding that the artisanal model is firmly rooted in the long term.

Where the growth came from

By region, Europe led, rising 7.2 percent at constant currency across the three months to the end of September. France itself gained 3.6 percent, while the rest of the continent climbed 9.5 percent. Japan was a powerhouse once again.

The Americas rose 8.8 percent. But outside Japan, Asia stalled: sales were flat, with zero growth or decline, leaving the wider region at 1.9 percent growth. The Middle East fell 4.5 percent, which reflected continued geopolitical and economic uncertainty.

Leather goods remained the main growth category for the maker of the Kelly and Birkin bags. Sales rose 10.8 percent at constant currency, helped by demand for new designs and established products alike.

Perfume and beauty rose 7.5 percent, while the subsidiaries that include John Lobb shoes, Saint-Louis glassware and Puiforcat silverware grew 10.5 percent. Silk scarves were up a modest 1.4 percent over the period.

Not every division moved forward. Ready-to-wear and accessories slipped 2 percent, and jewellery and home products fell 1.1 percent. Watches were the weakest category once more, continuing their fall with a 6 percent drop in the quarter.

What the maison is waiting for

Dumas pointed to two launches as the next lift. The company is looking ahead to Grace Wales Bonner's first men's ready-to-wear collection and the introduction of haute couture by Nadège Vanhée, both due in January 2027.

Those launches give Hermès a fresh narrative, but the immediate numbers tell a plainer story. A house that was the best-protected name in luxury is now growing at less than half the pace it managed a year ago.

We have covered that shift. When growth first slowed in China, we wrote that Hermès had been the exception to the country's luxury slump for two years, and that its own deceleration was a signal the whole sector was watching.

Family ownership helps explain a response of patience. The Hermès family controls about two-thirds of the share capital and over 76 percent of voting rights, pooled through the H51 holding company with a 20-year lock-up.

That structure followed the family's fight against Bernard Arnault's LVMH stake-building, with the AMF ruling against LVMH in 2013 before it relinquished its shares in 2014. It underpins a 41 percent operating margin and a strategy of scarcity over scale.

Elsewhere, Chanel's Medium Classic Flap rose 95 percent in six years to $11,300, moving the house toward Hermès-tier exclusivity. That strategy hit its limit in 2024, when revenue fell 4.3 percent and China dropped 9.3 percent.

In our ranking of the most valuable luxury brands, Hermès broke into Brand Finance's global Top 100, while Chanel overtook Louis Vuitton as France's most valuable brand at $38 billion against $33 billion.

Until then, Hermès is guiding on a long-term vision and a leather goods business still growing at double-digit rates.

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Image: Hermès