Hermès International (RMS) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue reached €7.5 billion, up 15% at constant exchange rates, with all regions and divisions posting double-digit growth despite a complex global environment.

• Net income attributable to owners was just under €2.4 billion, up 6% year-over-year, with net profitability near 32%.

• The group maintained a solid financial structure with a €10 billion restated net cash position at end of June 2024.

• Headcount increased by 1,200, with 62% of employees based in France and a strong focus on diversity and inclusion.

• Continued commitment to responsible employment, environmental goals, and local community engagement.

Financial highlights

• Gross margin was 70.6% of revenue, down from 72.2% in H1 2023, mainly due to currency effects and lower sell-through rates.

• Recurring operating income reached €3.1 billion (42% of sales), up 7% year-over-year.

• Net income margin was 31.6% of revenue, compared to 33.2% in the previous year.

• Operating cash flow grew 8% year-over-year to €2.8 billion; adjusted available/free cash flow was €1.8 billion.

• Equity was €15 billion, representing 75% of liabilities.

Outlook and guidance

• Full-year guidance for leather goods growth maintained at 15-16%, with price and capacity effects contributing equally.

• Hermès confirms its ambitious medium-term goal for revenue growth at constant exchange rates, with continued investment in production, store expansion, and sustainability.

• CapEx for 2024 expected to exceed €1 billion, with acceleration in H2.

• Tax rate guidance for 2024 is 28%.

• Price increases will continue to be driven by inflation and currency effects, with a conservative approach.