Hermès has reported weaker-than-expected third-quarter sales, citing slowing demand in China and continued instability in the Middle East.
The Birkin bag maker saw revenue rise 4.3 per cent at constant exchange rates to £3.6bn in the three months to September, falling short of analysts’ expectations of 5.2 per cent growth.
The performance marked the Hermès’ slowest quarterly sales growth since early 2020, when the pandemic forced store closures worldwide.
Hermès’ ready-to-wear and accessories division saw sales fall two per cent with weaker Chinese demand for products including belts, shoes and other accessories contributing to the decline.
Its finance chief Eric du Halgouët described the Chinese market as “very difficult”, citing ongoing economic uncertainty and subdued consumer confidence.
Sales across Asia-Pacific excluding Japan were flat during the quarter, while the Middle East recorded a 4.5 per cent decline amid geopolitical tensions.
However, Hermès’ leather goods and saddlery division continued to outperform, with sales climbing 10.8 per cent, driven by strong demand for its signature Birkin and Kelly handbags.
The Americas also delivered growth of 8.8 per cent, while Japan recorded a 9.6 per cent increase and Europe excluding France grew 9.5 per cent, all at constant exchange rates.
It highlighted particularly strong trading in the UK, supported by the opening of its new flagship store at 166 New Bond Street in London in June.
Hermès executive chairman Axel Dumas said: “Despite a complex environment, Hermès continues its profitable growth and maintains its course.”
He added that the group remained confident in its long-term strategy, pointing to upcoming collections including Grace Wales Bonner’s debut menswear range and a new couture offering from Nadège Vanhée.
Hermès shares fell around five per cent following the trading update as investors questioned the resilience of the high-end luxury market.
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