Hermès International (RMS) Q3 2024 earnings summary

Executive summary

• Consolidated revenue reached €11.2 billion at the end of September 2024, up 14% at constant exchange rates and 11% at current rates, with all regions and most business lines contributing to growth despite currency headwinds.

• Q3 2024 sales were €3.7 billion, up 11% at constant exchange rates, slightly above Q2 and close to Q1, which benefited from Chinese New Year.

• Long-term investments are set to exceed €1 billion in 2024, focused on production capacity, distribution, and talent, with 2,000 new hires planned.

Financial highlights

• H1 2024 net profit (Group share) was €2,368 million, 31.6% of revenue.

• H1 2024 recurring operating income was €3,148 million, 42% of revenue.

• Adjusted free cash flows for H1 2024 were €1,776 million.

• Net cash position at H1 2024 stood at €9,477 million.

• Currency fluctuations negatively impacted revenue by €242 million at the end of September 2024.

• Communication expenditure for the year is projected at €650 million, with €250 million front-loaded in H1.

• CapEx is expected to surpass €1 billion for the year.

Outlook and guidance

• The annual growth target remains unchanged, with confidence in the brand's resilience despite a complex environment.

• Maintains ambitious medium-term revenue growth target at constant exchange rates despite global uncertainties.

• No significant changes in trends for mature markets; U.S. and other regions started Q4 strongly.

• Price increases for 2025 will be lower than 2024's 9%, reflecting cost and FX impacts but not fully offsetting FX headwinds.

• Continues long-term strategy focused on creativity, artisanal know-how, and selective distribution.