Hermès Records Stellar Growth for its 2021 Q3 Results

The maker of the renowned Birkin bags, Hermès has exceeded expectations for its latest quarterly financial performance.

Oct 22, 2021 | By Joseph Low

The maker of the renowned Birkin bag, Hermès has exceeded expectations for its latest quarterly financial performance. The company posted revenues of €2.37 billion in the three months leading to September 30, 2021. This represented a 31.5 per cent increase when compared to 2020. Using 2019 as a benchmark, the company boasted a 40.3 per cent increase. Hermès stellar growth in Q3 rendered it to be one of the top-performing luxury brands this year. 

According to the press release from Hermès, its good results have “benefitted from an upturn in sales in Europe, an acceleration in America and a sustained dynamic in Asia.” Despite a resurgence of Covid-19 infections in parts of Asia, activity in the third quarter was sustained and that resulted in a 23.4 per cent increase (compared to 2020) across the region. The growth was mainly fueled by “remarkable performance in Greater China and other countries in Asia” such as Australia, Thailand and Malaysia.

Image: Hermès

In the Americas, sales were strong as well as seen in the 48.4 per cent increase in revenues. While in Europe, growth was up 36.4 per cent and in France, the figure rose to 46.7 per cent. The company said that sales “benefitted from the support of local customers, growing online sales and the partial return of tourist traffic.”

Across the different business lines, all of it posted a double-digit growth when compared to 2019 and 2020. Its leather goods and saddlery division saw an organic growth rise of 22.2 per cent during Q3 and Hermès attributed the growth to sustained demand and improved production capabilities.

For its ready-to-wear and accessories division, revenues were up by 39.4 per cent. Hermès unveiled its spring/summer 2022 collection for women earlier this month in an empty hanger and that garnered many positive reviews. And in July, the menswear collection was presented “around an artistic performance filmed in real time”.

Apart from its renowned Birkin bags, Hermès is also known for its silk products and has been a leader in its field for many years. Its silk and textile business recorded a 49.2 per cent growth. Meanwhile, the beauty and perfume division saw a 32.5 per cent increase. The successful launch of the H24 perfume for men and Rouge Hermès Éclat de la nuit for women, both contributed to its growth.

At the watches division, a growth of 53.7 per cent was mentioned and this represented a strong performance and a nod to Hermès watch-making prowess and innovation. This is driven by its successful men’s watch release, the Hermès H08, and other classics of the Maison.

As the health situation continues to improve across the world, Hermès is “continuing its investments and [is accelerating] job creations,” and it is confident of exceeding its targets as the year comes to an end.

“The performance of the third quarter reflects an atypical year, during which we continue our strategic investments and accelerate job creations,” said Axel Dumas, Executive Chairman of Hermès. 

“In a world that remains unstable, the balance between our sixteen métiers and between our locations around the world, allows us to move forward with optimism and caution, while continuing to create beautiful, high quality, sustainable objects.”

Elsewhere, LVMH and Kering have both released their third-quarter results with the former achieving growth of over 20 per cent year-on-year while the latter rose 12.2 per cent. Luxury goods companies have bounced back from the fallout of the pandemic and are lifted by strong demand for premium products and consumers return to socialising.

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