Hermès shares tumble on weak Q1 sales as Iran war hits luxury demand
Summary
Hermès shares fell as much as 13% on Wednesday after Q1 sales of €4.07bn came in 1% below last year (+5.6% at constant currency, vs +7.1% expected). France sales fell 2.8%, hit by collapsing tourist flows; Asia grew only 3.5% (vs 7.7% expected); the Americas were the one bright spot at +17%. Forty of the group's sixty concession stores are travel-retail outlets affected by air travel disruptions.
Delfineo's Take
Hermès is normally the most defensive luxury name because Birkin demand is rationed, not sold. The fact that even its leather goods division missed forecasts (9% vs 12.2% expected) shows the tourist channel — not underlying desire — was the binding constraint this quarter. The CFO's statement that Hermès can absorb the Middle East hit 'for two more months' is the real number to watch: it's a ticking clock on the sector's pricing power, not just on one quarter.