This story was updated July 30 at 3:08 p.m.
PARIS — Hermès International shrugged off U.S. price hikes and global economic headwinds to post a 9 percent jump in second-quarter sales at constant exchange, slightly exceeding analysts’ expectations and reaffirming the brand’s resilience and continued strong brand appeal.
Sales totaled 3.9 billion euros, with growth recorded across all regions.
Looking at the first half, net profit came in at 2.2 billion euros, down from 2.4 billion euros during the same period last year, primarily due to a one-off tax on the profits of large companies in France. Excluding that payment, net profit rose to 2.5 billion euros, marking a 6 percent increase year-over-year.
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“Hermès has consistently focused on scarcity, craftsmanship and brand equity, rather than chasing aggressive volume growth. Its approach appears well-suited to a market where high-end consumers are becoming more selective and emotionally connected to brands,” commented Third Bridge analyst Yanmei Tang.
Hermès continues to fly at “significantly higher altitude than other soft luxury peers,” Bernstein analyst Luca Solca said in a research note.
But caution heading into the second half closed shares down 4.54 percent in trading on Wednesday.
The operating profit margin took a small hit due to currency fluctuations and euro strength against the U.S. dollar and the Chinese renminbi, declining to 41.1 percent from 42 percent at the same time last year.
Those currency fluctuations were partially compensated by price increases implemented in the U.S. in early May to “offset” President Donald Trump’s announced tariffs, which were 10 percent at the time.
Despite that price bump, sales in the Americas rose 12.3 percent at constant exchange rates to 760 million euros, driven by “double-digit” growth in the U.S.
Now the company is waiting a beat for clarity on tariff policies following a new trade framework agreed by the U.S. and the European Union over the weekend. A baseline 15 percent tariff is set to go into effect on Friday, but both sides are still tweaking the details.
“We’re waiting for some precisions of the negotiations,” chief executive officer Axel Dumas said in a conference call with analysts. “For the moment, we don’t plan any changes after having increased the price in May.”
Price rises may be on the horizon, as the rise in raw material costs, particularly the price of gold, are expected to bite in the second half, said chief financial officer Eric du Halgouët.
Japan was the best-performing market in the quarter, with sales rising 14.7 percent at constant exchange rates to 392 million euros in the three months to June 31. That market defied the downturn affecting other luxury groups, including LVMH Moët Hennessy Louis Vuitton, which reported that organic sales in Japan plunged 28 percent in the second quarter.
Dumas chalked it up to consistent investment in the country when others pivoted toward China. That move has “really created a resilient model as a result of our strength with local customers,” Dumas said. And unlike competitors who depend heavily on tourists seeking better prices due to the continued weakness of the yen, “our customer is faithful, loyal to the store and their sales associate.”
Elsewhere in Asia, excluding Japan, sales increased 5.3 percent in the second quarter despite ongoing challenges. Hermès attributed this to its value-oriented strategy, as the brand continues to be viewed as a safe haven amid economic headwinds affecting other major players.
The Chinese market, once a major growth driver, has also cooled due to the ongoing financial and real estate crisis. “They’re still in the kind of wait-and-see attitude,” Dumas said. “The momentum of a few years ago is not back.”
“While the overall luxury market in China is cooling, Hermès has continued to avoid heavy promotional campaigns and has not overextended itself in terms of product range or store expansion,” Tang said.
“The brand’s disciplined retail strategy and selective investment in China are also paying off. Rather than flooding the market, Hermès has maintained a focused footprint and high store productivity,” she added. “This has helped the brand avoid the fatigue now visible in some of its competitors.”
Hermès reopened two stores in the region, in Taiwan and Macau, following renovations and expansions.
The brand also achieved double-digit growth in Europe, up 12.6 percent in the second quarter. In its home country of France, sales grew 4.1 percent, supported by continued strength among local clients despite a slowdown in tourists from the Middle East over the summer during “a prolonged period of tension,” du Halgouët said.
But those Middle Eastern tourists are also buying at home. While a smaller contributor by volume, sales in the Middle East surged 20.4 percent to 177 million euros in the second quarter.
Dumas noted a slowdown among “aspirational” clients purchasing entry-level items like belts, costume jewelry, scarves and fragrances, citing global economic and geopolitical uncertainty.
“There is a global trend to save money rather than to spend it,” he said, adding that the decline is visible both in store foot traffic and online sales. While entry-level “volume categories” have taken a hit, “high value sectors” such as jewelry and leather goods remain strong.
Ready-to-wear and silks posted modest gains, up 3.8 percent and 2.2 percent, respectively.
The dip in ready-to-wear and silks growth is largely tied to fewer accessories purchases, not core runway pieces. “There is a strong appetite for our women’s ready-to-wear collections,” Dumas said, though belts and accessories “have been affected a bit more by the drop in footfall.”
The beauty and fragrance category was down 7.2 percent in the three-month period, despite the launch of a new lipstick in April.
Watches, which have faced industry-wide challenges, declined 5.5 percent to 130 million euros in the second quarter. Hermès expects a recovery in this segment and will expand its watchmaking facility in Noirmont, Switzerland, by 2028.
Kelly and Birkin bags continued to fly off shelves, and the brand also benefited from the introduction of new styles including the Faubourg Express, P’tit Arçon, Médor and Bolide Messenger. Those helped sales in the leather goods category gain 14.8 percent in the quarter to 1.76 billion euros, as Hermès bags remain symbols of exclusivity.
Hermès is steadily expanding production capacity to ease its infamous waitlists, with four new workshops in France opening annually over the next four years.
Throughout the fall, the company will open its 24th leather workshop, alongside new stores in Scottsdale, Ariz., and Nashville, as well as Shenzhen and Guangzhou in China.
Hermès invested 316 million euros in the first half of 2025, including 159 million euros for store renovations in Beijing and Dubai. Ongoing renovation projects in Geneva and London remain on track for 2026. Full-year investments are expected to exceed 1 billion euros, focused on digital infrastructure, logistics and upstream production in textiles, homewares and fragrance.
With store count roughly steady with one net closure, square-footage expansions have allowed the brand to showcase and drive growth in more categories like shoes, jewelry, and ready-to-wear, Dumas said.
Hermès anticipates ending the year with 230 stores globally, 193 of them directly operated, du Halgouët added.
About That $10 Million Birkin
An 8.6-million-euro auction sale of the original Birkin bag once owned by Jane Birkin herself filled Dumas with pride in the bag’s continued status and appeal, but he reiterated that Hermès is not interested in resale platforms.
“We didn’t want to participate in this sale,” he said. “We are not interested in and we don’t participate in secondhand markets.”
He added that the brand’s pricing is based on true manufacturing costs, not desirability, so Hermès stays away from auctions that can artificially inflate prices. “This is a commitment that we have to our customers,” he said.