Investing.com -- Hermes International SCA (EPA:HRMS) posted a sharp increase in third-quarter sales on Thursday, outperforming competitors that have been more affected by the slowdown in China as the luxury brand's handbags continue to attract wealthy buyers.
The company’s shares rose more than 1% in European trading.
For the three months ending in September, the French company reported revenue of €3.7 billion ($3.99 billion), representing an 11.3% rise at constant exchange rates. This result matched the analyst consensus estimate.
Commenting on the report, Jefferies analysts said the sales growth “confirms an industry-beating resilience, supported by the more premium parts of the group's offering.”
“Regionally a sequential weakening in the Chinese cluster was a feature common with the rest of the industry. But, unlike peers, RMS continues to enjoy strong momentum with an acceleration in EMEA and resilience in the Americas.”
Separately, Citi analysts cautioned that risks of normalizing growth in the company’s non-leather categories could materialize. However, “pricing should limit downside risks to FY25E revenues,” they added.
Despite uncertainties in the global economic, geopolitical, and monetary landscape, Hermès confirmed it would maintain its medium-term guidance for revenue growth at constant exchange rates and continue with recruitment efforts.
Sales growth in the Asia Pacific region, excluding Japan, was the slowest, increasing by just 1%.
"In China, there hasn't been an interruption in trends, we're still facing the lower traffic that started after the Chinese New Year but there hasn't been an additional decline," Eric du Halgouet, executive vice president of finance, said during a call.