Hermès Revenue Surges as Luxury Demand Holds in US & Japan | Economic Times

Hermès Revenue Surges as Luxury Demand Holds in US & Japan | Economic Times

February 12, 2026 discoverhiddenusacom Business

Hermes, known for luxury goods including handbags selling for $10,000 and more, reported fourth-quarter revenue growth exceeding analyst expectations. The company’s performance was particularly strong in the United States and Japan, defying a broader slowdown in the luxury sector.

Strong Performance Amidst Industry Headwinds

While other luxury groups like LVMH and Kering have faced pressure, Hermes has consistently increased revenue, supported by its clientele and existing order backlog. CEO Axel Dumas stated, “The group is going into 2026 with confidence.” The company anticipates price increases of around 5-6% this year, a slight decrease from the 6-7% rate seen in 2025, attributed to currency fluctuations.

Did You Know? Hermes’ leather division, encompassing products like the Birkin and Kelly bags, accounts for the majority of the company’s profits.

Price Increases as a Growth Driver

Luxury equity analyst Chiara Battistini at J.P. Morgan highlighted the importance of Hermes’ pricing strategy to its future growth. This contrasts with competitors, such as Gucci owner Kering, whose CEO acknowledged that post-pandemic price increases contributed to a recent revenue decline.

Fourth-quarter sales, including Birkin and Kelly bags, silk scarves, and perfume, increased by 9.8% when adjusted for currency fluctuations, surpassing the 8.4% growth predicted by analysts compiled by Visible Alpha. Sales in the Americas, primarily the United States, rose by 12.1%, exceeding expectations of around 9%. Asia excluding Japan, largely driven by China, experienced 8% growth.

Positive Signals from China

Hermes executives observed “positive signs” in China, a key luxury market that has experienced slower growth due to the country’s property market challenges. Dumas stated, “I do not see the situation deteriorating,” and noted “positive moves, in particular the way they are managing the property crisis.”

Expert Insight: Hermes’ ability to maintain revenue growth while competitors struggle suggests a strong brand identity and loyal customer base, potentially insulating it from broader economic pressures affecting consumer spending in the luxury market.

Organically, revenues in Hermes’ leather division grew by 14.6%.

Frequently Asked Questions

What drove Hermes’ revenue growth in the fourth quarter?

Strong sales in the United States and Japan, along with overall growth in its leather goods division, drove Hermes’ revenue growth in the fourth quarter.

How does Hermes’ pricing strategy compare to its competitors?

Hermes continues to implement price increases, while some competitors, like Kering, have paused or reduced price hikes due to falling sales.

What is the outlook for Hermes in China?

Hermes executives are seeing positive signs in China, and do not anticipate further deterioration of the market, citing positive developments in the management of the property crisis.

How might evolving economic conditions in key markets like the US and China impact the future performance of luxury brands like Hermes?