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Hermès had another année exceptionnelle in 2023 with total revenue reaching EUR13.4 billion, up 21% compared to 2022. This can be attributed to its affluent customer base, whose spending habits are largely unaffected by economic uncertainties.
In the fourth quarter, sales were EUR3.3 billion, rising by 18%. This was achieved despite a high comparison base in America and Asia, reflecting sustained sales momentum seen in Leather Goods and Saddlery, Ready-to-wear, and Watches.
Operating income increased by 20% to EUR5.6 billion, with annual recurring operating profitability reaching its highest level ever at 42.1% of sales. This is a high-margin profitable business.
Geographically, all areas posted solid performance, with sales increasing by approximately 20% across the board. The company also expanded its production capacities, particularly in leather goods, and continued to reinforce its local anchoring in France.
Among its most iconic offerings is the Birkin bag, famously coveted and scarce, often prompting customers to indulge in what's known as "Birkin bait" spending - buying multiple Hermès products in hopes of securing a chance to be invited to purchase a Birkin bag. A perfect formula for infinite demand.
Recognising the importance of these loyal patrons, Hermès prioritises their satisfaction through tailored experiences and exceptional service.
The brand has that je ne sais quoi when it comes to nurturing existing clientele. This is also reflected in its share price which was up 4.8% on Friday, bringing the year-to-date returns to 14.6%, ahead of rivals LVMH (+11.7%) and Gucci owner Kering (+5.1%).
