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Investing.com -- Hermes reported a better-than-expected increase in fourth-quarter sales on Friday, driven by strong demand from affluent customers for its high-end luxury products. The company's shares jumped roughly 4% in European trading.
The French luxury brand, known for its iconic Birkin handbags, posted a 17.6% year-on-year rise in revenue at constant exchange rates to €3.96 billion ($4.15 billion) for the three months ending Dec. 31, surpassing analysts’ expectations of €3.69 billion, according to LSEG data.
Full-year sales climbed 14.7% at constant exchange rates to €15.2 billion, beating forecasts of €14.94 billion.
“In 2024, in a more uncertain economic and geopolitical context, the solid performance of the results attests to the strength of the Hermès model and the agility of the house’s teams, whom I thank warmly,” CEO Axel Dumas said in a statement accompanying the results.
The leather goods (LG) and saddlery division, which generates nearly half of Hermès' revenue, saw the strongest growth, with sales rising 21.5%—well above the 13% increase analysts had anticipated.
In Asia, excluding Japan, sales grew 9% despite slower traffic in Greater China since late in the first quarter of 2024. The Americas region and Japan both recorded 22.3% growth.
Commenting on the report, Morgan Stanley (NYSE:MS) analysts said Hermes's Q4 print marks "a stellar end to the year."
"The biggest beat came from LG – the most supply constrained category – in theory, volumes should have grown +6-7%; as such, we presume investors on the call will want to hear if there was a pull forward of demand," they added.
Looking ahead, Hermès forecast continued revenue growth in 2025 but did not provide specific targets. Dumas noted during an earnings call that it was “too early to see an inflection” in the broader luxury market, according to Reuters.