Download PDF

1. Company Snapshot

1.a. Company Description

Hermès International Société en commandite par actions engages in the production, wholesale, and retail of various goods.The company offers leather goods and saddlery, such as bags for men and women, clutches, briefcases, luggage, small leather goods, diaries and writing objects, saddles, bridles, and a range of equestrian products and clothing; ready-to-wear garments for men and women; and accessories, including jewelry, belts, hats, gloves, the Internet of Things products, and shoes.It also provides silk and textiles for men and women; art of living and tableware products; perfumes; and watches.


In addition, the company is also involved in weaving, engraving, printing, dyeing, finishing, and producing textiles; and purchasing, tanning, dyeing, finishing, and selling precious leathers.It sells its products through a network of 303 stores worldwide.The company also sells watches, perfumes, and tableware through a network of specialized stores.


Hermès International Société en commandite par actions was founded in 1837 and is based in Paris, France.Hermès International Société en commandite par actions operates as a subsidiary of H51 SAS.

Show Full description

1.b. Last Insights on RMS

Hermès International Société en commandite par actions faces negative drivers, including a luxury market slowdown, reflected in Kering's double-digit sales declines at Gucci and Saint Laurent. S&P Global revised its credit outlook for Kering to negative, citing weakening consumer demand. Additionally, Morgan Stanley downgraded Hermès to Equal-weight, citing a "creative supply shock" reshaping the industry. LVMH's recent sales growth, driven by China demand, may not necessarily translate to Hermès' performance. These factors contribute to a challenging environment for Hermès.

1.c. Company Highlights

2. Hermès' Solid Growth in Sales

Hermès recorded a solid growth in sales for the first half of 2025, with revenues reaching EUR 8 billion, up 8% at constant exchange rates and 7% at current exchange rates. The current operating income was up 6% to EUR 3.3 billion, and the net profit restated after the one-off tax on large French companies stood at EUR 2.5 billion, up 6%. The EPS came out at EUR 21.82, slightly below estimates of EUR 22.22. The company's sales growth was driven by all regions, with Europe (excluding France) up 13%, France up 9%, Japan up 16%, and the Americas up 12%.

Publication Date: Jul -30

📋 Highlights
  • Revenue Growth: - Sales reached EUR 8 billion, up 8% at constant exchange rates and 7% at current rates.
  • Operating Income: - Current operating income rose 6% to EUR 3.3 billion.
  • Regional Performance: - Europe (13%), France (9%), Japan (16%), and the Americas (12%) drove growth.
  • Product Division Growth: - Leather and saddles grew 12%, ready-to-wear and accessories by 6%.
  • Investments: - EUR 316 million invested in H1 2025, including EUR 159 million for distribution networks and EUR 85 million for production capacity.

Segment Performance

The leather and saddles division made remarkable progress, up 12%, while ready-to-wear and accessories stood at 6%, driven by the latest collections. Silk and textiles continued to grow, thanks to new designs and formats. According to Axel Dumas, "The leather goods division is on track to meet its objectives, with a 6% volume growth and a 12% value growth for the year, including price increases."

Investments and Outlook

Hermès has continued to invest in production capacity, with four projects for leather workshops in the next four years, and has laid the first stone for the extension of the Couzeix site in tableware and Noirmont in Switzerland for watches. The company has also continued to develop its exclusive and integrated retail network, with renovations and extensions of stores in Florence, Central Embassy in Thailand, and Taichung and Macau in Greater China. The company's outlook for 2025 remains unchanged, with confidence in an economic and geopolitical context that remains complex.

Valuation

With a P/E ratio of 51.69 and a P/S ratio of 15.69, the stock is trading at a premium. However, with a ROIC of 22.17% and an ROE of 28.43%, the company's profitability is strong. The dividend yield is 0.59%, and the free cash flow yield is 2.16%. The EV/EBITDA ratio is 32.97, which is relatively high.

Regional Performance

The US market performed well, with a 12% growth, offsetting difficulties in other regions, such as France, which saw a slowdown due to a high comparison base and fewer tourists. Japan is a strong market for Hermès, with a long-standing story and a faithful clientele. The company has a resilient model in Japan, with less tourist customers looking for cheaper prices. Korea also reported a strong performance, with growth in both price and volume.

Margins and Risks

The gross margin is expected to be affected by the sell-through of raw materials, with an average weighted cost increase in the second half of the year. The company does not participate in the second-hand market, and Axel Dumas expressed concerns about speculation and the impact on customer relationships. The A&P spend is expected to grow at the same level as turnover, around 3.6%.

3. NewsRoom

Card image cap

Here's Prada's luxury empire after its $1.38 billion Versace acquisition

Dec -04

Source:

Card image cap

LVMH Denies Misappropriating Hermès Shares From Family Heir

Dec -03

Source:

Card image cap

From Temu to Tiffany? TikTok's Surprise Luxury Pivot Is Turning Heads on Wall Street

Nov -25

Source:

Card image cap

Assessing Hermès After 2025 Price Dip and Expansion Into New International Markets

Nov -25

Source:

Card image cap

Saudi Arabia Home Textile Market Growth Analysis 2025-2034: Ralph Lauren, Hermès, and IKEA Strengthen Lead Through Luxury Branding, Premium Craftsmanship, and Mass-Market Innovation

Nov -24

Source:

Card image cap

The ‘Birken Indicator’ — 4 Things the Rich Love To Buy That Are No Longer in Their Budget in 2025

Nov -23

Source:

Card image cap

CIBC launches additional European Canadian Depositary Receipts ("CDRs")

Nov -20

Source:

Card image cap

FTSE 100 LIVE: Stocks slump as Google boss warns no company immune if AI bubble bursts

Nov -18

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.32%)

6. Segments

Asia-Pacific (Excl. Japan)

Expected Growth: 10.6%

Increasing demand for luxury goods in Asia, driven by growing middle-class populations, particularly in China and India, will fuel growth for Hermès. South Korea's strong economy and Australia's affluent consumer base will also contribute to the segment's growth.

Americas

Expected Growth: 5.4%

The Americas segment is driven by a strong brand reputation, increasing luxury demand, and e-commerce growth in the US, Canada, and Latin America, leading to a robust growth hypothesis.

Europe (Excl. France)

Expected Growth: 4.5%

Hermès International Société en commandite par actions' European segment, excluding France, will witness growth due to increasing demand for luxury goods, driven by rising disposable income and a growing middle-class population in countries like Germany, UK, and Spain.

France

Expected Growth: 10.3%

Hermès International Société en commandite par actions will continue to dominate the luxury goods and fashion accessories market, driven by the growing demand for high-end products, strong brand reputation, and strategic expansion in emerging markets.

Japan

Expected Growth: 5.5%

Japan's aging population and growing wealth drive luxury demand, coupled with the nation's appreciation for high-quality craftsmanship, positioning Hermès' luxury goods and accessories for steady growth.

Other (Middle East)

Expected Growth: 12.5%

Hermès International Société en commandite par actions' luxury goods segment is expected to grow, driven by increasing demand for high-end products, particularly in Asia, and the company's successful digital transformation efforts.

7. Detailed Products

Silk and Textiles

High-quality silk scarves, shawls, and textiles with iconic designs and vibrant colors

Leather Goods and Saddlery

Exquisite leather handbags, wallets, and accessories crafted with precision and attention to detail

Ready-to-Wear and Fashion Accessories

Timeless and sophisticated clothing, shoes, and accessories for men and women

Perfumes and Beauty

Luxurious fragrances and beauty products with unique scents and formulas

Watches and Jewelry

Exquisite timepieces and fine jewelry with intricate designs and precious materials

Home and Furniture

Luxurious home decor and furniture with elegant designs and premium materials

8. Hermès International Société en commandite par actions's Porter Forces

Forces Ranking

Threat Of Substitutes

Hermès International Société en commandite par actions has a medium threat of substitutes due to the presence of other luxury fashion brands, but its strong brand image and high-quality products help to differentiate it from competitors.

Bargaining Power Of Customers

Hermès International Société en commandite par actions has a low bargaining power of customers due to its premium pricing strategy and strong brand loyalty, making customers less likely to switch to competitors.

Bargaining Power Of Suppliers

Hermès International Société en commandite par actions has a medium bargaining power of suppliers due to its dependence on high-quality raw materials and skilled labor, but its strong relationships with suppliers help to mitigate this risk.

Threat Of New Entrants

Hermès International Société en commandite par actions has a low threat of new entrants due to the high barriers to entry in the luxury fashion industry, including the need for significant capital investment and a strong brand reputation.

Intensity Of Rivalry

Hermès International Société en commandite par actions operates in a highly competitive luxury fashion industry, with intense rivalry among established brands, making it essential to maintain a strong brand image and competitive pricing strategy.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.19%
Debt Cost 3.95%
Equity Weight 97.81%
Equity Cost 7.65%
WACC 7.57%
Leverage 2.24%

11. Quality Control: Hermès International Société en commandite par actions passed 9 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Michelin

A-Score: 5.9/10

Value: 6.4

Growth: 4.7

Quality: 4.7

Yield: 8.8

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
Hermès

A-Score: 4.9/10

Value: 0.5

Growth: 8.3

Quality: 9.2

Yield: 0.6

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Richemont

A-Score: 4.7/10

Value: 1.3

Growth: 5.6

Quality: 6.9

Yield: 2.5

Momentum: 6.5

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Dior

A-Score: 4.6/10

Value: 5.9

Growth: 6.1

Quality: 5.8

Yield: 3.1

Momentum: 2.0

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
LVMH

A-Score: 4.2/10

Value: 2.3

Growth: 6.2

Quality: 6.8

Yield: 3.1

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

View Full Report
Stock-Card
Kering

A-Score: 4.0/10

Value: 2.5

Growth: 4.3

Quality: 3.8

Yield: 3.8

Momentum: 7.5

Volatility: 2.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2165.0$

Current Price

2165$

Potential

-0.00%

Expected Cash-Flows