Hermes Earnings: Strong Growth Across Regions as It Continues to Outpace Rivals

We maintain our fair value estimate of EUR 1,270 for wide-moat Hermes as the company reported strong fourth-quarter and full-year results. In the fourth quarter Hermes delivered 17.5% constant-currency revenue growth. This was an improvement from the third quarter (15.6% constant currency sales increase) but a deceleration from a strong first half of the year (25.2% constant currency sales increase). All in all, 2023 constant-currency revenue grew by 20.6%. More notably, Hermes easily outpaced peers, such as LVMH’s fashion and leather division (14% growth in 2023) and Kering (negative 4% in 2023). Strong sales were accompanied by margin expansion to a record 42.1%, up from 40.5% in 2022.