On April 15, French luxury house Hermès reported its financial results for the first quarter of 2026 (ending March). The company posted revenue of €4.1 billion, marking a solid 6% increase at constant exchange rates compared to the same period last year. However, due to currency fluctuations, reported sales declined slightly by 1%.
Geopolitical Risks Come Into Focus
A key takeaway from the results is the growing impact of geopolitical tensions, particularly in the Middle East. Hermès noted that sales in the region declined year-on-year, with escalating tensions since March weighing on both tourist traffic and wholesale activity.
While the Middle East represents a relatively small portion of the group’s overall revenue, the slowdown highlights its role as a meaningful drag on growth. The “Other” region, which includes the Middle East, recorded negative growth at constant exchange rates, with weaker performance notably in airport locations and concession-based retail.
The impact extended beyond operations into the market, where Hermès shares declined following the announcement. The development underscores how geopolitical instability is once again becoming a critical variable for the luxury sector.
Americas and Japan Drive Growth
Outside of these pressures, performance across key regions remained strong. The Americas led with a 17% increase at constant exchange rates, while Japan recorded a 10% rise. Europe, excluding France, also delivered solid growth of 10%, supported by resilient local demand.
Asia excluding Japan posted a modest 2% increase. Within the region, Greater China continued to show slight growth, while South Korea maintained solid momentum. Hermès also continued its long-term expansion strategy with the opening of a new store in Hanoi, Vietnam.
Leather Goods Remain the Core Growth Engine
By category, Leather Goods and Saddlery once again stood out, growing 9% and reaffirming its role as the brand’s primary growth driver. The performance was supported by strong demand for new bag designs and ongoing expansion of production capacity.
Silk and Textiles also delivered a solid 8% increase, while other segments, including jewelry and homeware, maintained positive momentum. In contrast, the Watches division declined, reflecting continued challenges in the segment.
Executive Chairman Axel Dumas commented: “In a tense geopolitical environment, Hermès maintains its course, true to its long-term strategy. Supported by its abundant creativity, its uncompromising quality and the loyalty of its clients, Hermès is continuing its profitable growth in 2026 with confidence and conviction. The fundamentals of the Hermès model are more than ever a differentiating strength.”
Despite headwinds from currency fluctuations and geopolitical uncertainty, Hermès reaffirmed its medium-term objective of revenue growth at constant exchange rates.
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