- Revenue Growth - Sales reached EUR 8 billion, up 8% at constant exchange rates and 7% at current rates.
- Operating Income - Current operating income rose 6% to EUR 3.3 billion.
- Regional Performance - Europe (13%), France (9%), Japan (16%), and the Americas (12%) drove growth.
- Product Division Growth - Leather and saddles grew 12%, ready-to-wear and accessories by 6%.
- Investments - EUR 316 million invested in H1 2025, including EUR 159 million for distribution networks and EUR 85 million for production capacity.
Segment Performance
The leather and saddles division made remarkable progress, up 12%, while ready-to-wear and accessories stood at 6%, driven by the latest collections. Silk and textiles continued to grow, thanks to new designs and formats. According to Axel Dumas, "The leather goods division is on track to meet its objectives, with a 6% volume growth and a 12% value growth for the year, including price increases."
Investments and Outlook
Hermès has continued to invest in production capacity, with four projects for leather workshops in the next four years, and has laid the first stone for the extension of the Couzeix site in tableware and Noirmont in Switzerland for watches. The company has also continued to develop its exclusive and integrated retail network, with renovations and extensions of stores in Florence, Central Embassy in Thailand, and Taichung and Macau in Greater China. The company's outlook for 2025 remains unchanged, with confidence in an economic and geopolitical context that remains complex.
Valuation
With a P/E ratio of 51.69 and a P/S ratio of 15.69, the stock is trading at a premium. However, with a ROIC of 22.17% and an ROE of 28.43%, the company's profitability is strong. The dividend yield is 0.59%, and the free cash flow yield is 2.16%. The EV/EBITDA ratio is 32.97, which is relatively high.
Regional Performance
The US market performed well, with a 12% growth, offsetting difficulties in other regions, such as France, which saw a slowdown due to a high comparison base and fewer tourists. Japan is a strong market for Hermès, with a long-standing story and a faithful clientele. The company has a resilient model in Japan, with less tourist customers looking for cheaper prices. Korea also reported a strong performance, with growth in both price and volume.
Margins and Risks
The gross margin is expected to be affected by the sell-through of raw materials, with an average weighted cost increase in the second half of the year. The company does not participate in the second-hand market, and Axel Dumas expressed concerns about speculation and the impact on customer relationships. The A&P spend is expected to grow at the same level as turnover, around 3.6%.