Hermès Shares Plunge 36% as Asia-Pacific Sales Stagnate
Hermès International SCA reported flat revenue growth in Asia-Pacific excluding Japan, missing analyst expectations amid an economic slowdown in China.
The luxury goods company Hermès International SCA reported flat revenue growth in the Asia-Pacific region excluding Japan for the third quarter, failing to meet analyst expectations of 1.55% growth. The region, which includes China, represents approximately 40% of the company's total revenue. Overall sales for the period rose by 4.3%, a figure that also fell short of projections.
This stagnation mirrors recent disappointing results from LVMH and is attributed to an economic slowdown in China and stricter taxation on overseas wealth. Despite these headwinds, the company noted that Greater China remained stable over the period in a more difficult context.
Market reaction has been severe, with shares declining by 36% this year, the worst annual performance since the company's 1993 Paris listing. Analysts have further raised concerns that the increased availability of Birkin and Kelly handbags in retail stores and on second-hand platforms could erode the brand's ultra-exclusive status.
