Luxury giant Hermès is standing firm against the broader industry’s slowdown, reporting €15.2 billion ($16.4 billion) in revenue for full-year 2024, a 15% increase at constant exchange rates and an 18% jump in the fourth quarter alone. Hermès’s core business — leather goods, jewelry and ready-to-wear — remains resilient. Operating income grew 9% to €6.2 billion ($6.7 billion), with a net profit of €4.6 billion ($5 billion), keeping the company’s profitability at 30% — among the highest in luxury. The brand’s cash reserves surged to €12 billion ($13 billion), reinforcing its ability to remain independent.
“Sometimes, I feel like saying, ‘Pinch me, I must be dreaming,’” CEO Axel Dumas said during the company’s earnings call on February 13. “We projected €12 billion ($13 billion) in revenue by 2025, and here we are at €15 billion ($16.4 billion) already.”
In 2024, Hermès opened new stores in Princeton, Tokyo and China’s Wuxi, and more locations are planned for Phoenix, Nashville and Shenzhen in 2025.
Hermès’s success has been bolstered by its strict brand control, limited access to products and store-first strategy that prioritizes personal relationships over mass accessibility. In addition, its signature aesthetic is subtle and unostentatious, which aligns with the growing preference for quiet luxury, particularly in markets like China, according to Neil Saunders, managing director of retail analytics company GlobalData Retail.
“Hermès does a fantastic job of creating demand for their products by emphasizing exclusivity and scarcity,” he added. “That’s one of the reasons there is some concern about dupes. While dupes do not have anywhere near the quality of genuine items, Hermès still doesn’t want the market to be flooded with lookalike products, as that creates a sense of ubiquity that is alien to its brand ethos.”
That concern came into focus in January when Walmart’s online marketplace began selling Birkin dupes through third-party resellers, sparking backlash from luxury consumers. Real Hermès products sold by resellers and secondhand platforms are also sold on Walmart’s site, highlighting a growing challenge for luxury brands in the digital age.
“The Birkin dupes on Walmart’s site have attracted such attention because of the juxtaposition of a very price-focused brand and a very aspirational product,” Saunders said.
Despite macroeconomic turbulence and a slowing Chinese luxury market, Hermès’s 2024 sales grew across all regions, increasing 23% surge in Japan, 19% in Europe and 15% in the U.S. Dumas acknowledged uncertainty in China, where the real estate downturn is affecting consumer confidence.
“In China, economics is more about what people think will happen than what actually happens,” he said. “There are some positive signs, but not enough to expect a full recovery.” Despite this, the company isn’t pulling back on investment in China, with store renovations and expansions continuing in Beijing, Shenzhen and Guangzhou.
Hermès’s leather goods category, responsible for nearly half its revenue at €6.5 billion ($7 billion), saw 18% growth, outperforming expectations. Jewelry (+17%) and ready-to-wear (+15%) also contributed significantly, while perfume and beauty (+9%) continued steady growth.
Watches, however, were down 4%, reflecting the broader luxury watch market’s slowdown after years of pandemic-fueled demand. “We made some mistakes,” Dumas said. “We have things to improve, but I remain very confident.”
The CEO noted that Hermès’s customers are prioritizing quality and resale value for its products — a trend seen across the sector. “In some cases, our cost of goods is higher than the selling price of other brands’ bags,” he said. “We simply don’t sell the same product.”
Beyond its core categories, Hermès is exploring haute couture, though in typical Hermès fashion, it has yet to share an official roadmap. “It wasn’t a strategic decision — it just felt right,” Dumas said, adding that the first pieces could arrive in 2026 or 2027. In beauty, Hermès will expand its beauty offerings to skin care. Currently, the brand’s beauty assortment includes lipsticks and makeup, which it launched in 2020, and select men’s skin-care items, launched in 2022.
Despite rapid growth, Dumas emphasized that Hermès will stick to its human-scale, craftsmanship-first philosophy. “Our secret is resisting bureaucracy,” he said. “We keep our leather workshops at 300 people because, at that size, you know everyone’s name.” With a 7% price increase planned for 2025, Hermès remains confident that its pricing power will offset inflation and currency fluctuations.
As for the company’s €12 billion ($13 billion) cash pile, don’t expect major acquisitions. “We don’t know how to run other brands,” Dumas said. “We know how to do Hermès.”
As luxury’s biggest players adapt to a more challenging environment, Hermès stands apart with strong organic growth, a loyal customer base and a steadfast commitment to craft. “We have great clients,” Dumas said. “They know what they want, and they know why they come to us.”
