After the close of trading on July 25th local time, French luxury goods group Herm è s released its first half and second quarter 2024 results as of June 30th: sales in the first half of the year increased by 12% year-on-year to 7.5 billion euros (an increase of 15% at fixed exchange rates), with sales in the vast majority of geographical regions achieving double-digit growth; The gross profit margin decreased by 1.6 percentage points to 70.6% due to the impact of exchange rates and reduced foot traffic in the Greater China region.
Among them, the sales revenue in the second quarter was 3.7 billion euros, an increase of 13% calculated at a fixed exchange rate, slightly slowing down from the 17% increase in the first quarter. Except for the impact of customer traffic in Greater China on Asia’s performance, all regions continue to show strong growth momentum.
In the subsequent conference call with analysts, Axel Dumas, Executive Chairman of Herm è s, and Eric du Halgouet, Executive Vice President of Finance, attended and provided a more detailed interpretation and observation of the current closely watched performance status of the Chinese market and changes in luxury consumption among Chinese customers.
In the second quarter, due to the decline in customer traffic in Greater China and the strong comparative base compared to the same period last year, sales growth in the Asia Pacific region, excluding Japan, slowed down, with a fixed exchange rate increase of 5.5%, compared to 13.9% in the first quarter.
However, Eric du Halgouet emphasized during the conference call that “the decline in the Chinese market in the first half of the year was very, very small, and had little impact on the overall performance of the Asia Pacific market. The slowdown in growth rate is also affected by inventory shortages and the need for replenishment. In the first half of the year, our online products had a higher sell through rate (offsetting the decline in store foot traffic)
In the first half of the 2024 fiscal year, the Asia Pacific market (led by China), excluding Japan, accounted for 47% of Herm è s’ global market share, slightly lower than the 49% share in the same period last year.
