Hermes (HRMS.PA): Margin-led beat; growth outlook stable, no China rebound yet

研报英文原文证据摘录

Hermes (HRMS.PA): Margin-led beat; growth outlook stable, no China rebound yet

patterns. Hermes has above-luxury-industry-average exposure to Asia ex-Japan (~40% of sales) and

Japan (~10%). It is also exposed to Europe (~25% of sales, of which ~40% is generated in France) and the Americas (~20%).

Therefore, any major change in the external political or economic environment that may directly or indirectly affect consumer

sentiment is a risk to the group’s sales performance. Conversely, any improvement of the economic growth outlook in these

regions could lead to upward revisions to our estimates.

Fashion risk: With a classic style and a large proportion of carryover products in Leather Goods and Silk & Textiles in particular,

Hermes’ fashion risk is relatively low, in our view. However, in a fashion world increasingly driven by newness and innovation,

particularly with Millennials and Gen-Z consumers, this could represent a threat to the business.

Travel industry risk: The company has below-industry-average revenue exposure to tourist spending thanks to a strong

footprint with local clients in key markets. Nevertheless, the exposure to tourists is a key element of growth and, as such, adds

cyclicality to the P&L in case of geopolitical events, pandemics, or natural disasters disrupting global travel.

Distribution risk / resale market: With supply constraints on its most coveted SKUs (Birkin and Kelly lines of bags in

particular), the secondary market for Hermes handbags has become relatively active on legitimate online resale platforms, for

which the price tag for a new (or even second-hand) bag fetches higher prices than a brand new bag purchased in an official

Hermes store. Such parallel markets are detrimental to Hermes’ volume growth and potentially to brand equity.