Hermès announced a 6.7% increase in sales at constant exchange rates, amounting to €4.1 billion in the second quarter of 2026, aligning closely with analyst predictions. This growth represents a slight uptick from the first quarter, primarily fueled by accelerated expansion in France, Japan, and the Middle East. Notably, Hermès had fallen short of Q1 projections by 1.4%, with a 5.6% year-on-year increase, which marked a slowdown compared to Q4 2025, leading to a 12% drop in stock value. The EBIT margin for the first half of 2026 stood at 41%, surpassing the consensus estimate of 40.4%, yet the company’s shares were down 7.5% during Wednesday morning trading.
Despite a slower pace compared to 2025, Hermès continues to outperform the luxury sector in the first half of 2026. LVMH reported a 3% rise in group sales, with its fashion division growing by 1%, while Kering saw a 2% increase to €3.65 billion, and Gucci’s sales decline narrowed to 2%. Richemont defied expectations with a 20% sales surge to €6.3 billion in Q1.
In terms of product categories, Hermès saw a 10.2% increase in leather goods and saddlery sales in the second quarter; ready-to-wear and accessories rose by 3.6%; silk and textiles grew by 12.2%; and jewelry and home sectors increased by 4%. Watch sales improved by 4.4%, while perfume and beauty experienced a 9.5% decline. Axel Dumas, executive chair, noted the difference between the performance of perfume and beauty, highlighting that beauty is thriving, and perfume is doing well in stores, though external sales are more challenging.
Asked about the impact of wildfires in southwest France, where Hermès operates two leather goods factories in Gironde, Dumas stated that the production facilities were unaffected, though the local population suffered greatly. Employees from their Fontainebleau factory assisted in evacuating horses during a separate wildfire in July. While the production impact is limited, the emotional toll on employees is significant.
Regionally, Hermès reported a 13.7% increase in sales in the Americas; an 8.3% rise in Europe, excluding France; and a 6.2% growth in France. In the Asia-Pacific region, excluding Japan, sales were up 2.5%, with South Korea as a key driver. Japanese sales climbed 12.3%, while the “Other” region, including the Middle East, saw a 2.4% decline.
Looking into the third quarter, the Hermès executive team observed consistent trends in the US, Japan, Korea, and Europe. Éric du Halgouët, executive VP of finance, mentioned uncertainties regarding France and the Middle East, noting improvements in France in Q2 compared to Q1, but uncertainty persists in the Middle East. Hermès is projected to grow 7.1% for the full year, according to Visible Alpha consensus.
For the latter half of the year, Hermès plans to maintain its long-term vision while enhancing investments across all business sectors and regions, Dumas informed analysts. Upcoming store openings in Chicago and Brooklyn and expansions in Rio de Janeiro, Chengdu, and Geneva are part of their strategy.
Bernstein luxury goods analyst Luca Solca anticipates more developments as Hermès elevates its high-end offerings. Dumas confirmed this, announcing Hermès would unveil its first couture collection in Paris in January 2027, marking a new milestone in its growth.
