Hermès, the renowned French luxury brand, has released its 2019 results, showcasing impressive growth and garnering praise from CEO Axel Dumas for its “exceptional performances.” The company experienced balanced growth across all business lines and geographical areas.

While some of Hermès’ stores in China were affected by the coronavirus outbreak, with only four out of 43 still closed, Dumas believes that the situation is starting to stabilize. Fortunately, the company has not had to shutter any of its Italian workshops due to the outbreak. However, it is still too early to determine the full extent of the virus’s impact on the business.

In terms of financials, Hermès reported remarkable sales and growth in 2019. Revenue surged by 15.4% at current exchange rates to €6.883 billion and by 12.4% at constant rates. Recurring operating income also saw a significant increase of 13% to €2.339 billion, while net profit reached €1.528 million. Despite the challenges faced during the period, growth continued in all regions during Q4, with revenue for the quarter rising by 13.4% to €1.871 billion. The company’s own stores played a pivotal role in revenue growth, with sales increasing by 13% in 2019.

Geographically, Asia excluding Japan experienced a robust revenue increase of 17.8% at constant exchange rates, amounting to €2.589 billion. Hermès saw strong growth in Greater China and South Asian countries, despite the events impacting Hong Kong. Japan also witnessed an increase in sales of 8.2% to €864 million, with the year-end influenced by anticipated purchases due to a VAT increase. Europe, excluding France, showcased slower growth but still rose by 8% to €1.2 billion, largely driven by the United Kingdom and Italy. France itself exhibited 8% growth, amounting to €867 million, despite the negative impact of end-of-year events.

In terms of product performance, Hermès witnessed sustained demand for its Leather Goods and Saddlery division, with a constant currency revenue rise of 11.3% to €3.414 billion. The Ready-to-Wear & Accessories and Jewelry units also displayed exceptional performance, experiencing a 17% increase to €1.574 billion. The Silk and Textiles business line posted a 7.5% increase, reaching €592 million, while Perfumes improved by 4% to €326 million. The Watches business line witnessed a significant surge of 12% to €193 million, and other business lines, including Jewelry, Art of Living, and Hermès Table Arts, saw a rise of 20% to €258 million.

Overall, 2019 proved to be a year of remarkable growth for Hermès, with revenue increases across all regions and business lines. The company retains an optimistic outlook on its future growth, despite the prevailing economic and geopolitical uncertainties worldwide.

Useful links:

1. CNBC: Hermès Full Year 2019 Earnings
2. Forbes: Hermès Results Beat, Yeti Trumping Covid-19