Hermès International reported full-year 2024 revenue of €16.7 billion, up 11.3% at constant exchange rates, with fourth-quarter growth accelerating to 13% despite a weakening luxury backdrop. Greater China, which contracted in the first half, posted sequential improvement throughout the second half and turned positive in Q4, signaling the first meaningful recovery in the region since mid-2023.
The Paris-based house moved €4.2 billion in Q4 alone, exceeding consensus estimates by roughly 4%. Japan delivered the strongest regional performance at +23% for the year, driven by yen weakness and sustained tourist inflows. The Americas grew +10%, Europe excluding France grew +7%, and France itself grew +6%. Greater China's full-year decline of -5% masks the inflection point: October through December showed sequential acceleration each month, with December posting low-single-digit growth. Management noted that local Chinese consumers returned to stores in tier-one cities, while travel patterns normalized.
Leather goods, the core 48% of revenue, grew +12% for the year. Ready-to-wear and accessories grew +11%. Watches grew +9%, and perfume grew +14%. The waitlist for Birkin and Kelly bags lengthened further in Q4, with average wait times now exceeding 24 months in key markets. The company opened 13 new stores in 2024, bringing the global count to 303, and plans 16 openings in 2025, with five in Greater China. Capital expenditure for 2024 reached €730 million, in line with prior guidance, and management maintained FY25 capex guidance at €800 million.
This matters because Hermès operates as the canary in the luxury coal mine. While LVMH, Kering, and Richemont have reported margin compression and inventory correction, Hermès demonstrated pricing power without promotional activity. The China recovery is narrow but real: it is driven by high-net-worth locals, not mass affluent, and it is concentrated in leather goods and bespoke categories. The company held gross margins at 71%, unchanged year-over-year, while peers saw 200-400 basis points of erosion. Operating margin compressed only 30 basis points to 42%, compared to 150-300 basis points at competitors.
The divergence is structural. Hermès controls its distribution, owns its leather tanneries, and produces 85% of goods in France under long-term artisan contracts. There is no channel conflict, no wholesale dilution, no outlet strategy. The waiting list is the moat. When China destocks, Hermès does not discount; when aspirational buyers pull back, ultra-high-net-worth buyers do not. The company's client base skews older, wealthier, and stickier than peers. Management guided to mid-single-digit revenue growth for 2025, which implies deceleration but is above consensus for the broader luxury sector.
Allocators should watch three markers over the next six months. First, whether Greater China sustains positive growth through Chinese New Year in late January and into Q1 2025; second, whether leather goods growth holds above +10% despite tougher comps; third, whether new store productivity in China matches European and Japanese benchmarks within 18 months. The company reports Q1 2025 revenue in late April. Watch for commentary on client acquisition rates in China and any shift in leather goods mix toward entry-price-point styles.
The €265 billion market capitalization trades at 52x forward earnings, a 35% premium to the luxury sector median, unchanged from a year ago despite sector-wide multiple compression.
The takeaway
Hermès delivered 13% Q4 growth with China turning positive, proving ultra-luxury pricing power persists while mass luxury corrects.
hermesluxurychinaleather goodsearnings
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