Luxury goods group Hermes International outperformed rivals as it grew sales despite headwinds in China.
Hermes shrugged off the headwinds facing other luxury goods makers with a strong third quarter driven by improvements across nearly all its divisions. The French handbag and scarves group posted an 11% rise in revenues at current exchange rates to €3.7 billion in the three months to end of September, underlying its reputation as a standout performer in the luxury sector.
Hermes reported a rise in sales for the third quarter but looking ahead, it cautioned about global economic, geopolitical and monetary uncertainties.
Birkin bag maker Hermes reported on Thursday a hefty rise in third-quarter sales, continuing to outshine rivals hit hard by a downturn in China as its luxury handbags lure wealthy shoppers.
U.S. consumers suing French luxury house Hermes have revised their lawsuit once again, hoping to persuade a skeptical judge that the company is forcing buyers to spend thousands of dollars on other products before they can purchase one of its famed Birkin bags.
We focus on high-quality investments, favouring companies with strong competitive advantages that consistently outperform, even if they come with higher valuations. Recently, we sold LVMH but repurchased it after a significant market cap drop, also adding Hermès International to our portfolio. The luxury sector offers compelling long-term growth opportunities, making it an attractive space for buy-and-hold investors.
Hermes' stock is down 20% off highs, so it's a good moment to revisit its valuation. I build an inverse DCF model to understand what needs to happen for the stock to work from here. Understanding how reasonable the underlying drivers of free cash flow are is key to understanding the company's current valuation.
Hermès stock is rated as a buy due to its strong pricing power, exclusivity strategy, and consistent revenue growth without much debt. The company's competitive advantages, including its brand and controlled distribution, ensure high margins and a rock-solid moat, outperforming peers like Louis Vuitton. Despite high valuation multiples, a DCF analysis shows significant upside potential, making Hermès a compelling long-term investment.
Despite a challenging luxury market, Hermès reported sustained revenue growth, saw expanded profits and robust margins in H1 2024. The company's market multiples have also improved over the past year, even as its prices have risen over this time. It's long-term dividend yield on cost is notable, too. There are risks arising from the continued market softening, and the possibility for short-term price drops. But these would make good times to buy it for the longer term.
Hermès International Société en commandite par actions (OTCPK:HESAY) Q2 2024 Earnings Conference Call July 25, 2024 12:00 PM ET Company Participants Axel Dumas - Executive Chairman Eric du Halgouët - Executive Vice-President, Finance Conference Call Participants Edouard Aubin - Morgan Stanley Luca Solca - Bernstein Adrien Duverger - Goldman Sachs Thomas Chauvet - Citi Melania Grippo - BNP Paribas Zuzanna Pusz - UBS Rogerio Fujimori - Stifel Ashley Wallace - Bank of America Carole Madjo - Barclays Operator Ladies and gentlemen, welcome to the 2024 First Half Financial Results. I'm now going to hand over the floor to Mr.
After a tough few weeks of market action, the French luxury stocks seemed to have found themselves in the bargain bin. Indeed, the macroenvironment has been far from perfect for high-end luxury product companies.
Luxury brands are often mistaken for premium ones. Hermes is a true luxury brand with a $237 billion valuation, leveraging iconic products like the Birkin bag for success. Hermes' high-net-worth target customers make the company more resilient to economic cyclicality.