Hermès International (RMS) Q4 2024 earnings summary

Executive summary

• Revenue reached €15.2 billion in 2024, up 15% at constant and 13% at current exchange rates year-over-year, with all regions and most business lines growing except Watches.

• Operating income rose 9% to €6.2 billion, with net profit group share up 7% to €4.6 billion (30.3% of sales).

• Workforce surpassed 25,000, with over 2,300 new jobs created, 62% in France; a €4,500 bonus distributed to all employees worldwide.

• Strategic investments in production, supply chain, and retail network continued, with over €2.5 billion invested over three years, including new workshops and store openings.

• Sustainability efforts led to a 64% reduction in Scope 1 and 2 emissions since 2018 and recognition for environmental and social responsibility.

Financial highlights

• Gross margin was €10.7 billion (73% of revenue), slightly down from 72.3% in 2023 due to currency effects.

• Recurring operating income margin at 40.5% of revenue, down from 42.1% in 2023.

• Net income margin at 30.3%, compared to 32.1% in 2023.

• Adjusted free cash flow reached €3.8 billion, up 18% from €3.2 billion in 2023.

• Net cash position increased by €900 million to €12 billion.

Outlook and guidance

• Ambitious medium-term revenue growth target at constant exchange rates, with continued investments in job creation, production capacity, omnichannel retail, and sustainability.

• Price increases of 6-7% planned for 2025 to offset cost inflation and currency impacts.

• Management expects margins to remain high but slightly impacted by negative currency effects.