Hermès International Société en commandite par actions engages in the production, wholesale, and retail of various goods. The company offers leather goods and saddlery, such as bags for men and women, travel articles, small leather goods and accessories, saddles, bridles, and various equestrian products and clothing; ready-to-wear garments for men and women; and accessories, including jewelry, belts, hats, gloves, internet of things products, and shoes. It also provides silk and textiles for men and women; art of living and tableware products; beauty and perfume products; and watches. In addition, the company is involved in weaving, engraving, printing, dyeing, finishing, and producing textiles; purchasing, tanning, dyeing, finishing, and selling tanneries and precious leathers; and creating and producing of metal parts. It sells its products through a network of stores in France, rest of Europe, Japan, the Asia Pacific, the Americas, and the Middle East, as well as sells watches, perfumes, and tableware through a network of specialized stores. The company was founded in 1837 and is headquartered in Paris, France. Hermès International Société en commandite par actions is a subsidiary of H51 SAS.
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Luxury Sales Plunge in China as Tax Push Hits Wealthy Shoppers
Global luxury brands are facing a deepening sales slump in China as the country's campaign to tax offshore wealth dampens spending by its richest consumers. Sales at the 25 biggest luxury labels in China dropped more than 10% in July, according to three research firms surveyed by Bloomberg, worse than June's slowdown and a sharp reversal from earlier this year. LVMH's Louis Vuitton and Dior, Kering's Gucci, Bottega Veneta and Balenciaga all recorded double-digit sales drops, while Hermes swung from gains to declines and growth for Chanel and Prada decelerated significantly. The slump coincides with China's sweeping efforts to stem capital outflows and reclaim tax revenues, including tighter controls on cross-border stock trading and demands for citizens to pay billions of dollars in levies on offshore assets and investment gains. The clampdown has contributed to erasing last year's 28.3% rally in the MSCI China Index, which is down 8.9% this year, and Hong Kong's Hang Seng Index has also lost steam after strong gains in 2025.
Chinese consumers shift spending to premium cosmetics over luxury fashion
Chinese consumers are changing their spending habits in the luxury goods market, turning more to premium beauty products instead of buying handbags and luxury fashion brand items. Amid a slowing economy and consumer confidence that has yet to fully recover, major beauty companies like Estée Lauder and L'Oréal reported strong growth in high-end product sales in China this year, while luxury fashion makers such as Hermès and LVMH indicated that demand remains flat. Nicolas Hieronimus, CEO of L'Oréal, said that premium skincare and dermocosmetic products in China grew around 7 percent, with L'Oréal's luxury beauty division in China expanding 10 percent in the latest quarter. Data from Oliver Wyman and the World Duty Free Association found that 37 percent of high-spending Chinese consumers plan to increase their beauty product budgets next year, compared to just 4 percent who intend to buy more leather goods.
Hermès International Half-Year Earnings Put Valuation in Focus
Hermès International reported half-year 2026 earnings with sales of €8,163 million and net income of €2,238 million, prompting a fresh look at its valuation. The stock closed at €1,550.50, slightly above a widely followed narrative fair value of €1,505, suggesting it may be about 3% overvalued. The fair value estimate incorporates a discounted cash flow and PEG average, a 10% discount for potential disruption from a vanished 5.8% stake, a further 5% reduction for other risks, and an €11 billion cash add-back from over €12 billion in net cash. The shares have fallen 26.31% year to date, with a one-year total shareholder return decline of 27.19%, though the five-year return remains positive at 21.44%. Key risks include the unresolved €14 billion missing share saga and potential pressure from French surtax charges.
Dow Plunges 1,153 Points After Fed Holds Rates Steady
US stocks closed sharply lower, with the Dow Jones Industrial Average tumbling 1,153 points, or 2.19%, after the Federal Reserve voted to keep its policy rate at 3.50% to 3.75%. Three of the 12 voting members on the FOMC dissented in favor of a quarter-point rate hike. Fed Chair Kevin Warsh said the committee stands ready to act if necessary. AI-related chip stocks extended their decline, and investors awaited earnings from Microsoft and Meta Platforms. Brent crude oil surged nearly 8%, breaking above 90 dollars a barrel, after President Trump signaled a forceful response to Iran. The yield on the 10-year US Treasury note jumped 7 basis points to above 4.67%, while the 30-year yield surged 10 basis points to above 5.2%, its highest level since 2007. Vertiv shares tumbled 17% after revenue missed estimates, while Ford Motor gained 2.1% after raising its full-year profit forecast for the second time. European markets closed slightly lower, with the STOXX 600 index down 0.29%. Luxury goods stocks fell 2.4%, led by Hermes, which dropped 11% on a lack of recovery signs in the China market, while Kering surged nearly 17% after Gucci sales fell less than expected.
European stocks close lower, luxury goods sector drags market sharply
European stock markets closed lower on Wednesday, with the STOXX 600 index falling 0.29% to 645.01 points, snapping a three-day winning streak. The luxury goods sector tumbled 2.4%, the steepest decline among industry groups, after mixed earnings from French luxury companies. Kering shares surged nearly 17% after Gucci sales fell less than expected, while Hermes shares slumped 11% amid no signs of recovery in the Chinese market. The technology sector fell 0.4%, extending losses for a third straight day, pressured by ASM International which dropped 4.8% despite a positive earnings outlook. The energy sector gained 2.2%, tracking Brent crude oil prices which jumped nearly 8% to breach 90 US dollars per barrel, as tensions in the Middle East flared up again. Investors are also watching the Federal Reserve meeting outcome and earnings from US tech giants such as Microsoft and Meta, which will report after the US stock market closes.
European Markets Dip Overall Despite Oil Stock Gains on Middle East Tensions
European markets fell back on the 29th, as surging crude prices driven by renewed large-scale airstrikes in the Middle East boosted oil stocks, while caution ahead of US monetary policy decisions and earnings from major tech firms weighed on the broader market. London's FTSE 100 extended gains, supported by oil stocks, hitting a new intraday high, but the mid-cap FTSE 250 slipped 0.03%. The STOXX Europe 600 fell 0.29%, snapping a three-day winning streak, with luxury brand stocks sold off. Hermès tumbled 11.0%, while Kering surged 16.9%, highlighting a sharp divergence. In eurozone bonds, Germany's 10-year yield rose 4 basis points to 3.148%, its biggest jump in about two weeks, as higher oil prices stoked inflation concerns. In currencies, the euro traded at 1.1382 dollars, and the dollar at 163.84 yen.
Kering Shares Surge 15% as Gucci Turnaround Gains Traction
Kering shares soared 15 percent to an intra-day high of 289 euros after the French luxury group's second-quarter results indicated its turnaround plan is gaining traction. The better-than-expected performance of star brand Gucci, which posted a 2 percent organic sales drop, prompted analyst upgrades from HSBC, Bernstein, RBC, and others. HSBC upgraded Kering to buy and raised its target price to 340 euros, while Bernstein lifted its target to 270 euros, citing Gucci's revised pricing strategy and new creative direction under Demna. CEO Luca de Meo noted that Gucci has repositioned some products after prices went too far in certain categories, and leather goods returned to growth in the quarter. By contrast, Hermès International fell more than 12 percent as markets anticipated a normalization in its growth rates.
Hermès reports 6.7% revenue growth in Q2, sales recover in France
Hermès second-quarter revenue rose 6.7% on a constant-currency basis to 4.1 billion euros, broadly in line with consensus estimates. Sales in France grew 6%, swinging back to positive territory after a decline in the first quarter, and CEO Axel Dumas noted improving momentum at Paris stores. Revenue in the Asia-Pacific region excluding Japan increased 2.5%, flat from the first quarter, with the China market stabilizing but not yet seeing a full recovery. The operating margin came in at 41%, beating expectations, and sales in the leather goods division, which includes Birkin bags, rose 10%.
Jewelry business becomes luxury brand star as fashion sales remain sluggish
The jewelry business is emerging as a key growth driver for the luxury goods industry, as fashion sales continue to slow and Middle East conflicts weigh on consumer purchasing power. Analysts at Vontobel note that jewelry consistently delivers growth and boasts standout margins relative to its business size. Carole Madjo, head of European luxury goods research at Barclays, says consumers are growing tired of high-end fashion that lacks novelty, while the sustained rise in gold prices is drawing more attention to jewelry as an investment asset. This trend is reflected in the results of Richemont, owner of Cartier and Van Cleef & Arpels, whose jewelry sales surged 24 percent in the quarter ending June, far exceeding analyst expectations. Meanwhile, LVMH, owner of Bulgari and Tiffany, is also expected to post stronger performance in its watches and jewelry division. Barclays has raised its growth forecast for LVMH's watches and jewelry business in 2026 to 8 percent from 7 percent, well above the 3 percent growth rate in 2025. This division is LVMH's third-largest business unit, accounting for 13 percent of its total revenue of 81 billion euros in 2025. Kering, owner of Pomellato and Boucheron, disclosed in April that its jewelry sales rose 22 percent in the first quarter year-on-year, the highest growth rate among all its businesses. Madjo adds that even brands with strong fashion and leather goods heritage, such as Hermès, Prada, and Gucci, are placing greater emphasis on jewelry, as it is a category delivering standout growth at this time. The market is watching earnings announcements from major luxury goods makers this week, with LVMH reporting on Monday, July 27, followed by Kering on Tuesday, July 28, and Hermès on Wednesday, July 29.
North America Luxury Apparel Market to Reach USD 51.63 Billion by 2031
The North American luxury apparel market is projected to grow from USD 38.52 billion in 2025 to USD 51.63 billion by 2031, at a compound annual growth rate of 5.3 percent. Ultra-high-net-worth consumers are anchoring market resilience, with Hermes' Americas division growing 17.2 percent in constant currencies in the first quarter of 2026 and Brunello Cucinelli reporting a 20.3 percent revenue increase. The athleisure segment is the fastest-growing end purpose, with a projected CAGR of 7.01 percent from 2026 to 2031, driven by the blend of luxury fashion and active lifestyles. T-shirts and shirts held a dominant 45.71 percent market share in 2025, signaling a shift toward casual luxury. Counterfeit proliferation remains a key challenge, with U.S. Customs seizing 79 million counterfeit items in fiscal year 2025.
Victoria’s Secret Gains 54.1% in First Half While Hermès Drops 23.9%
Victoria’s Secret & Co. was one of the best-performing fashion stocks in the first half, surging 54.1 percent, while Hermès International fell 23.9 percent. Victoria’s Secret’s rally was driven by a strategic shift away from promotions toward brand-led storytelling under CEO Hillary Super, who brought back a sexier positioning and changed the ticker to VSXY, with first-quarter sales up 15 percent. Hermès’ decline came as first-quarter constant-currency sales growth slowed to 6 percent, slightly below expectations and down from 9.8 percent in the prior quarter, amid price increases and disruptions in the Middle East. The broader S&P 500 rose 9.6 percent in the same period.
French stocks declined on Friday with the CAC 40 down 35.45 points or 0.45% at 7,788.07, as investors turned cautious ahead of Fitch Ratings' review of France's sovereign credit rating. Stellantis led the losses, falling 2.6%, while Hermes International and Renault dropped 1.7% and 1.6% respectively. Thales bucked the trend with a 1.8% gain. The moves came as data confirmed France's consumer price inflation eased to 0.9% in August from 1% in July, matching initial estimates.
European Markets Close Weak Amid US-Iran Peace Talks Uncertainty
European stocks closed weak on Friday as investors turned cautious over uncertainty about U.S. and Iran securing a lasting peace truce following the abrupt cancellation of talks in Switzerland. The pan European Stoxx 600 fell 0.24%, the UK's FTSE 100 ended down 0.35%, Germany's DAX drifted down 0.16%, and France's CAC 40 lost 0.55%. Mining stocks tumbled in London, with Antofagasta falling 6.1% and BHP Group down 4.3% after announcing a roughly $2.3 billion impairment charge on its Jansen potash project. In Frankfurt, Volkswagen ended 4.3% lower, while in Paris, Hermes International and LVMH lost between 1% and 2.3%. On the economic front, Germany's producer prices rose at the fastest pace in three years in May, and UK retail sales grew by a stronger-than-expected 1.2% month-on-month.