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.
Hermès shares tumble on weak Q1 sales as Iran war hits luxury demand
— Summary
The story in one line: Hermès shares fell as much as 13% on Wednesday after Q1 sales grew slower than expected, hit by collapsing tourist shopping in the Middle East and Europe.
Key numbers
- Q1 revenue: €4.07 bn, down 1% year-on-year (reported), or +5.6% at constant currency — well below analyst forecasts of +7.1%.
- Market cap: ~€170 bn. Share price: –30% over the past year.
- Sales by region: France –2.8% (more than half of French sales are to tourists); Asia +3.5% (vs. 7.7% expected); Americas +17% (the one bright spot, vs. 14% expected).
- Leather goods division (Birkin, Kelly — its biggest and most profitable): +9% (vs. 12.2% expected).
- 40 of its 60 concession stores are in travel-retail spots (airports etc.) and have been hit by disrupted air travel.
Why it matters
Hermès is normally the most recession-proof luxury name — demand for a Birkin bag vastly exceeds the number the company is willing to make each year, which usually protects it. But this quarter shows even Hermès can’t fully escape when Middle-East tourism dries up. Kering (owner of Gucci) also fell 10% the same day; LVMH has flagged similar pressure. The CFO said Hermès can absorb the Middle East hit “without too many difficulties” for two more months — a revealing time limit.
Takeaway
The war is now visibly denting even the strongest luxury franchise. The US is carrying the sector; China is not yet rebounding at Hermès the way it did at LVMH.
Source: Financial Times, 15 April 2026 — Megan Snaith.
— 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.