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Hermès Net Sales Up 31% in Q3

Hermès reported double-digit third-quarter growth in all geographies.

In a Nutshell: The French fashion house continued to grow through store openings and extensions, while online sales rose worldwide. In contrast, limp travel retail crimped the wholesale business, it said.

Sales in the quarter saw “remarkable performance in Greater China and in other countries in Asia,” despite new restrictions in Australia, Thailand and Malaysia. However, Japan was impacted by Covid. And in America, sales “accelerated significantly at the end of September, driven by “outstanding performance” in the third quarter, Hermès said.

By geography, the best performing region for the quarter was the Americas, which was up 45.6 percent for the quarter. Sales in Europe rose 40.3 percent, led by a 46.7 percent gain in France and a 36.4 percent increase in Europe, excluding France. Total sales in Asia rose 24.5 percent in the quarter, with Asia-Pacific, excluding Japan, up 32.3 percent. Sales in Japan were down 1.4 percent.

As for product categories, Hermès said its ready-to-wear and accessories business, which includes footwear, saw sales rise 39.4 percent to 609.7 million euros ($708.7 million), while silk and textiles sales rose 50.2 percent to 158.9 million euros ($184.7 million). Leather goods and saddlery, which includes small leather goods, saw sales rise 22.4 percent to 1.08 billion euros ($1.25 billion). Other Hermès sectors, which includes jewelry and home goods, saw sales up 47.8 percent to 273.2 million euros ($317.6 million). The balance of sales came from sectors including watches, perfume and beauty.

The company said MSCI Inc., the world’s largest provider of environmental, social and governance (ESG) indices, published an index rating of “A” for the fashion house’s resilience to ESG risks. And the company was No. 2 among textiles and apparel firms out of 174 firms in the Sustainalytics ranking, with “low” exposure to ESG risks.

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“These results reflect the sustainable dimension of Hermès’ craftsmanship model, and our ongoing efforts to improve our social and environmental performance,” it said.

Net Sales: For the third quarter ended Sept. 30, net sales were up 31.5 percent to 2.37 billion euros ($2.75 billion) from 1.80 billion euros ($2.09 billion).

Net sales for the nine months rose 54.0 percent to 6.602.1 billion euros ($7.67 billion) from 4.29 billion euros ($4.98 billion).

Earnings: The company didn’t provide earnings for the quarter.

“In a context of gradual improvement in the health situation, the group is continuing its investments and accelerates job creations. Despite a high comparison base in the 4th quarter, the group is approaching the end of the year with confidence,” it said.

Hermès said its highly integrated craftsmanship model and balanced distribution network, as well as the creativity of its collections and its customers’ loyalty, gives it confidence in the future.

Chairman’s Take: “The performance of the third quarter reflects an atypical year, during which we continue our strategic investments and accelerate job creations. 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,” said Axel Dumas, executive chairman.