Hermes Defies Luxury Slowdown with 9% Sales Growth on Strong Handbag Demand

Hermes reported a 9% rise in second-quarter sales, driven by strong demand for its iconic $10,000 handbags, including the Birkin, Kelly, and Constance. The French luxury house generated €3.9 billion ($4.5 billion) in revenue for the quarter ending June, in line with analysts’ expectations of a 10% increase.

Executive Chairman Axel Dumas said no additional price hikes are planned this year after earlier increases of 7% globally and 5% in the U.S. He noted these adjustments should offset the 15% tariff agreed between the Trump administration and the EU.

Despite a challenging global luxury market, Hermes has maintained steady growth by tightly controlling production, increasing output only 6–7% annually. This strategy has helped preserve exclusivity and shield the brand from broader sector headwinds affecting rivals like Chanel, Kering’s Gucci, and LVMH’s Louis Vuitton and Dior.

While Hermes’s leather goods remain resilient, its fashion, silk, and beauty divisions showed slower growth. Sales in China continue to face pressure amid prolonged economic weakness, though Dumas emphasized that long-term potential in the market remains unchanged. The company has shifted more focus to the U.S., where demand remains uneven due to volatile markets and consumer confidence.

Consultancy Bain forecasts global luxury goods sales will decline 2–5% in 2025 following a 1% drop last year. Hermes shares, which fell 2.5% in early Paris trading after the earnings report, are still up 2% year-to-date, outperforming most competitors and trailing only Cartier-owner Richemont.

The brand’s disciplined approach and enduring appeal among affluent shoppers continue to position Hermes as a standout in the slowing luxury sector.