Some are able to be immune to any crisis, uncertainty, and market challenges. Hermès is that someone. The clear demonstration is provided by the financial results published by the French brand for the year 2022. The luxury brand created 2,100 new jobs during the year for a total of 19,700 (12,400 in France). All employees will receive, at the end of February, a 4,000 euro bonus for a total 79 million euro provided by the company. The bonus comes as a consequence of the “extraordinary” results obtained in 2022. Here they are: revenue at 11.6 billion euro: +29% at current rates and +23% at constant rates compared to 2021. The Leathergoods & Saddlery division went from 4 to billion euro: +16% at constant rates. Moreover: profits grew 38% to 3.4 billion euro.
While rivals in the luxury segment, starting with Gucci, have had a challenging 4th quarter in China due to the pandemic, Hermès’ sales in Asia grew 25% (excluding Japan) between October and December 2022. CEO Axel Dumas told analysts that the company “continues to experience strong desirability in China” and that Chinese clients have had a solid demand for products during New Years. The same can be said for the US market. While rivals have experienced a slowdown, with local consumers making purchases in Europe, Hermès generated 41% more in revenue compared to the same period of the previous year.
Stronger than Covid
“Hermès surpassed the problems tied to Covid during the 4th quarter of 2022 and generated a very solid results”, commented Luca Solca, analyst at Bernstein (source Reuters). Moreover, overall sales went up 23% to 2.99 billion euro for the October-December 2022 period: higher than the analysts’ expected +17% (source Visible Alpha). The Leathergoods & Saddlery meanwhile grew 25% during the period, also above forecasted amounts.
Hirings and investments
In 2022 profitability from recurring operations at Hermès reached a record 40.5%, up from the 39.3% of 2021. The luxury brand said it hired over 4,300 people in the last three years, 2,900 of which in France, and that it plans on adding more jobs this year. Since 2020, Hermès made operational investments for 1.5 billion euro, 60% of which in France.
Image from finance.hermes.com