Hermès Navigates 2026 Growth

Even the most coveted names in luxury are feeling the ripple effects of global unrest. Hermès, often seen as a bastion of stability, reported its first-quarter 2026 financial results, revealing a landscape of tempered growth amidst geopolitical turbulence. While the house outperformed many of its peers, the numbers tell a story of resilience and cautious optimism.

A Measured Start to 2026

In the first quarter of 2026, Hermès recorded revenues of €4.1 billion, marking a 6% increase at constant exchange rates compared to the same period in 2025. However, when factoring in currency fluctuations, sales actually dipped by 1%. The house described this as “robust sales growth in a complex geopolitical context,” acknowledging the headwinds posed by the ongoing Middle East conflict, which has disrupted travel and shopping patterns globally.

Axel Dumas, Executive Chairman of Hermès, commented: “In a tense geopolitical environment, Hermès maintains its course, true to its long-term strategy. Supported by its abundant creativity, its uncompromising quality and the loyalty of its clients, Hermès is continuing its profitable growth in 2026 with confidence and conviction. The fundamentals of the Hermès model are more than ever a differentiating strength.”

Regional Performance: A Mixed Bag

Geographically, the Americas emerged as the standout performer, with an exceptional 17% growth, driven by balanced expansion across the United States, Canada, and South America. Europe (excluding France) followed with a solid 10% increase, buoyed by strong domestic demand. France, however, slipped 3% as tourist traffic dwindled, particularly in March, due to the geopolitical tensions. Japan posted record growth of 10%, fueled by robust local engagement and store activity.

Asia excluding Japan saw a modest 2% uptick, with Greater China continuing its slow but steady recovery. In contrast, the “Other” region—largely tied to the Middle East—experienced a 6% decline, reflecting a sharp drop in tourist traffic. Despite these challenges, in-store sales rose 7%, while wholesale suffered more, impacted by weaker performance in airport retail and concession spaces, particularly in Middle Eastern hubs.

Métiers: Leather Goods Lead, Watches Lag

Across its product lines, Hermès saw a familiar pattern: leather goods and core categories drove growth, while watches continued to struggle. Leather Goods and Saddlery, the house’s largest division, posted a 9% increase, with demand remaining anchored in iconic bags. New designs like the Faubourg Express and Collier d’Attelage have gained traction, while the Herbag 20 taps into the appetite for smaller formats.

To meet demand, Hermès continues to expand production, opening its 25th leather workshop in Loupes (Gironde), with further sites planned in Charleville-Mézières (2027), Colombelles (2028), and Les Andelys (2030). Ready-to-wear and Accessories remained stable, with recent runway presentations, including the women’s Fall-Winter 2026 show and Véronique Nichanian’s final menswear collection, well received. Silk and Textiles recorded solid growth of 8%, while the “Other” sectors—including Jewellery and the Home Universe—grew 7%. Perfume and Beauty remained stable, but Watches declined 4%, reflecting ongoing challenges.

Strategy Under Scrutiny

During the Q&A session, CFO Eric du Halgouët and Head of Investor Relations Alexandra Boucheron addressed questions about rising competition, particularly amid the “frenzy” around Matthieu Blazy at Chanel and Jonathan Anderson’s arrival at Dior. Hermès was unequivocal: its fundamentals remain unchanged, and there will be no strategic adjustment. The house emphasized that creation and “freedom to buy” are central to its philosophy, pointing to strong sell-through rates.

Halgouët noted that recent growth dynamics have been driven more by external factors than underlying demand, citing Middle East disruption and shifts in tourism flows. Reduced visitors from the Middle East and Greater China were partly offset by stronger US and European tourism, while local client demand in Europe remained solid with double-digit growth.

Looking Ahead

Hermès reiterated confidence in its full-year trajectory, noting that leather goods growth remains on track despite an artisanal production model that may not yield consistent supply. The house also expects its ongoing store expansion to contribute to growth.

As tourism patterns shift and global uncertainty persists, luxury consumers are reevaluating their spending habits. Hermès’ ability to navigate these turbulent times while maintaining its brand allure is a testament to its enduring appeal.

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