Investment Rating - The report maintains a positive outlook for Hermès, indicating an "Outperform" rating for the stock over the next 12-18 months [20]. Core Insights - Hermès reported Q3 FY25 revenue of €3.9 billion, reflecting a 10% year-on-year growth at constant exchange rates, with a cumulative revenue of €11.9 billion for the first nine months, up 9% at constant rates [8][12]. - The company continues to show resilience in a high base environment, with strong performance across various regions and product categories [5][12]. Regional Performance - The Asian market (excluding Japan) grew by 4% year-on-year, with significant improvements in Greater China due to brand loyalty and optimized store networks [2][9]. - Japan's market saw a remarkable 15% growth, primarily driven by local customer repurchases [2][9]. - The Americas experienced a 13% increase, supported by new store openings in the U.S. [2][9]. - Europe also performed well, with a 12% growth excluding France and 9% growth in France [2][9]. - The Middle East and other regions maintained a high growth trend of 15% [2][9]. Product Category Performance - Hermès's core leather goods and saddlery segment grew by 13% year-on-year, driven by popular product lines [3][10]. - The perfume and beauty segment declined by 5% due to a high base effect from the previous year [3][10]. - The watchmaking division maintained solid momentum, with plans for capacity expansion [3][10]. - Jewelry and homeware continued to show strong growth, increasing by 11% year-on-year [3][10]. Future Outlook - Management remains optimistic for Q4, noting positive trends in early October and strong sales during the Golden Week holiday [5][12]. - The company plans to open 3-4 new stores annually over the next two years while renovating around 15 existing stores [5][12]. - Operating margin is expected to remain around 40%, with capital expenditures increasing to support growth initiatives [5][12]. - The brand's strong customer loyalty and disciplined channel management are expected to support medium- to long-term growth [5][12].

Core Insights - Hermes reported a revenue of €3.91 billion for Q2 of FY2025, reflecting a 9% year-over-year growth at constant exchange rates [2] - For the first half of the year, total revenue increased by 8% to €8.03 billion, with operating profit rising by 5.7% to €3.33 billion, maintaining a high operating margin of 41.4% despite a 60 basis points decline [2] Regional Performance - The Asia-Pacific market, including China, showed signs of cooling, with Q2 revenue growth of only 0.1% to €1.6 billion and a cumulative increase of 1.5% for the first half [2] - Japan experienced strong growth, with revenue surging by 14.7% to €390 million [2] - The Americas market grew by 12.3% to €760 million, while Europe saw a 9.1% increase to €970 million, and the Middle East recorded a robust growth of 20.4% to €180 million [2] Product Segment Performance - The leather and equestrian goods segment remained the profit backbone, with Q2 revenue growing by 14.8% to €1.77 billion, outperforming market expectations [2] - The ready-to-wear and accessories segment grew by 3.8% to €1.11 billion, driven by positive responses to the autumn/winter women's and summer men's collections in Paris and Shanghai [3] - The silk and textiles segment increased by 2.2% to €190 million, while the perfume and beauty segment declined by 7.2% to €120 million due to a high base from the previous year [3] - The watch segment fell by 5.5% to €130 million, whereas jewelry and home goods saw a growth of 14.9% to €510 million [3] Pricing Strategy - Hermes' CEO Axel Dumas stated that there are currently no plans for further price increases this year, following a previous global price hike of 7% and an additional 5% increase in the U.S. market to offset tariff impacts [3]