Hermès reported full-year 2024 revenue of €14.8 billion, exceeding consensus estimates by 4.2% and marking 11.3% constant-currency growth despite sector-wide demand erosion. Fourth-quarter sales rose 13.1% on a constant-currency basis, with the United States and Japan each posting north of 15% growth while mainland China registered its first sequential improvement since August 2023.
The Paris-based house maintained average selling price increases of 6-7% across leather goods and ready-to-wear without observable demand elasticity. Birkin and Kelly bag waitlists held at 18-24 months in key markets. Japan contributed €2.1 billion in annual sales, up 22% year-over-year, driven by yen weakness and Chinese tourist spending in Tokyo and Osaka. U.S. revenue reached €3.9 billion, a 14% increase, with new store openings in Miami and Dallas adding €120 million in annualized run-rate.
China presents the cleaner signal. Mainland same-store sales declined just 1.8% in Q4 after falling 11% in Q3 and 14% in Q2. Hermès leadership noted stabilization in Tier-1 cities and cited government stimulus measures beginning to filter through high-net-worth consumption patterns. Hainan duty-free sales, which had collapsed 31% year-over-year in early 2024, returned to flat in December. The company did not provide forward guidance on China but confirmed no planned price increases there through mid-2025, a departure from its historical twice-annual adjustments.
This matters because Hermès operates as the luxury sector's demand canary. LVMH reports earnings February 4; Kering on February 18. Both have pre-announced weakness. If Hermès sees Chinese stabilization with no discounting, the 2025 luxury thesis shifts from survival to selectivity. Allocators watching sector rotation should note Hermès traded at 48x forward earnings as of Thursday's close in Paris, a 12% premium to its five-year average, while Kering sits at 11x and Richemont at 18x. The valuation spread has not been this wide since 2019.
Watch LVMH's January China same-store sales data, expected February 2-3. If Louis Vuitton and Dior also show sequential improvement, the luxury ETFs reprice by mid-February. Hermès opens its new Shanghai maison in March, a 3,800-square-meter flagship that will clarify whether Tier-1 demand is recovering or Hainan was a dead-cat bounce. Japanese comps matter through Golden Week in early May; if yen holds near 155 and Chinese tourist spending continues, Japan could deliver €2.5 billion in 2025 revenue for Hermès alone. The sector's next eight weeks will separate the houses that held pricing architecture from those who didn't.