--- title: "Hermès Q2 Revenue Beats Expectations; Strong Growth in Americas and Japan, Leather Goods Surge 10% | Earnings Insight" type: "News" locale: "en" url: "https://longbridge.com/en/news/294168640.md" description: "Hermès' Q2 revenue grew 6.7% year-over-year at constant exchange rates, beating expectations. Leather goods and silk scarves led the growth, with strong performance in the Americas and Japan, while Asia-Pacific growth slowed. Despite a negative impact of over €360 million from currency fluctuations and weakness in the perfume segment, the recurring operating margin reached 41.0%, and free cash flow amounted to €2.182 billion" datetime: "2026-07-29T09:47:45.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294168640.md) - [en](https://longbridge.com/en/news/294168640.md) - [zh-HK](https://longbridge.com/zh-HK/news/294168640.md) --- # Hermès Q2 Revenue Beats Expectations; Strong Growth in Americas and Japan, Leather Goods Surge 10% | Earnings Insight Hermès delivered a better-than-expected half-year performance amid global economic uncertainty, driven by robust demand for its flagship leather products and outstanding results in the Americas and Japan, although currency fluctuations significantly weighed on profitability. On Wednesday, Hermès announced that **sales for the second quarter of 2026 increased by 6.7% year-over-year at constant exchange rates, surpassing the consensus estimate of 6.51% by Bloomberg analysts. Total revenue reached €4.094 billion, a 4.8% year-over-year increase, also slightly exceeding the market expectation of €4.07 billion.** Axel Dumas, Executive Chairman of the group, stated that the first-half results "fully reflect the strong appeal of its 16 business sectors and customer trust," expressing "full confidence" in the second half of the year. Exchange rates were the most significant drag on performance this period. Hermès reported that currency fluctuations had a negative impact of over €360 million on revenue by the end of June, resulting in a first-half revenue growth of only 1.6% at current exchange rates, far below the 6.1% growth at constant exchange rates. Nevertheless, the recurring operating margin for the first half remained at 41.0%, higher than the analyst expectation of 40.3%, while adjusted free cash flow increased by 18% year-over-year to €2.182 billion. ## Americas and Japan Lead Growth, Asia-Pacific Performance Relatively Moderate In terms of regional performance, **the Americas market continued its strong momentum, with sales growing 15.3% in the first half at constant exchange rates. The second-quarter growth rate was 13.7%, slightly below the analyst expectation of 13.9%.** Hermès noted that growth in the Americas was balanced across all countries and business sectors, and the Group successfully launched Chapter 2 of its Fall-Winter 2026 women's ready-to-wear collection in Los Angeles in June. The Japanese market also performed brilliantly, growing 11.0% in the first half at constant exchange rates, with the second-quarter growth rate accelerating to 12.3%, exceeding the analyst expectation of 10.7%, benefiting from increased foot traffic and sustained loyalty among local customers. The Group completed store expansions or new openings in Osaka and Nagoya. Growth in the Asia-Pacific region (excluding Japan) was relatively moderate. It grew 2.4% in the first half at constant exchange rates, and 2.5% in the second quarter, slightly below the analyst expectation of 3.2%. Hermès stated that Greater China continued to grow, South Korea performed prominently, and new stores were opened in Hanoi, Vietnam in January and in Sanlitun, Beijing in April. The Middle East market remained under pressure due to geopolitical situations, falling 4.2% in the first half at constant exchange rates, but the Group indicated signs of gradual recovery in the second quarter. In Europe, the region excluding France grew 8.8% in the first half and 8.3% in the second quarter. The domestic French market accelerated to 6.2% growth in the second quarter, benefiting from local consumer demand and a rebound in tourist foot traffic. ## Leather Goods and Silk Scarves Stand Out, Perfume Drags Overall At the business sector level, **the Leather Goods and Saddlery business continued to serve as the core growth engine.** It grew 10.2% in the second quarter at constant exchange rates, reaching a 9.8% increase in the first half, with new models such as Cliquetis, Kelly Hobo, and Double Longe receiving enthusiastic market responses. To continuously expand capacity, Hermès opened its 25th leather workshop in Loupes, Gironde, France in April, and plans to build three more workshops in Charleville-Mézières (2027), Colombelles (2028), and Les Andelys (before 2030) in the coming years. **The Silk and Textiles sector saw a substantial 12.2% growth at constant exchange rates in the second quarter**, significantly exceeding the analyst expectation of 7.5%, with a 9.7% increase in the first half. After a weak performance in the first quarter, the Watches business achieved 4.4% growth in the second quarter, also vastly outperforming the analyst expectation of 0.17%. Perfumes and Beauty was the weakest performing sector this period. It declined 9.5% at constant exchange rates in the second quarter, a drop far exceeding the analyst expectation of -1.47%, with a cumulative decline of 4.5% in the first half. Hermès stated it would continue to advance product line development and launched Plein Air, the first foundation under the Hermès Beauty Line, at the beginning of the year. ## Robust Profitability, Significantly Improved Cash Flow In the first half, Hermès' recurring operating profit slightly increased year-over-year to €3.351 billion, exceeding the analyst expectation of €3.27 billion. The operating margin was 41.0%, a slight narrowing from 41.4% in the first half of 2025, but better than the market expectation of 40.3%. The Group's net profit attributable to shareholders was €2.238 billion, basically flat year-over-year, which included a special tax levied by France on large corporate profits. Excluding this tax, net profit attributable to shareholders reached €2.5 billion, equivalent to 30.7% of sales. Cash flow performance was particularly outstanding. Operating cash flow grew 16% to €2.694 billion, thanks to improved inventory management efficiency and high sell-through rates of the latest product series. Adjusted free cash flow increased 18% year-over-year to €2.182 billion. After distributing dividends of €1.915 billion and repurchasing shares worth €160 million, the Group's adjusted net cash position reached €12.926 billion at the end of June, further increasing from €12.773 billion at the end of 2025. ## Outlook: Continued Currency Pressure, Unchanged Medium-Term Goals Hermès stated that despite uncertainties in the global economic, geopolitical, and monetary environments, the Group confirms its "ambitious" medium-term revenue growth target at constant exchange rates. The Group will continue to drive long-term development by relying on its highly integrated craftsmanship model, balanced distribution network, creativity in product collections, and customer loyalty. Exchange rate factors remain a core risk concern for investors. By the end of June, currency fluctuations had a negative impact of over €360 million on revenue, and this pressure is expected to continue into the second half given that the strong US dollar environment has not yet reversed. The Group's next earnings disclosure will be the third-quarter revenue announcement on October 22, 2026. ### Related Stocks - [HESAY.US](https://longbridge.com/en/quote/HESAY.US.md) ## Related News & Research - [Hermes Shares Fall After Sales Show Little China Pickup](https://longbridge.com/en/news/294186187.md) - [Hermès publishes 2026 half-year financial report](https://longbridge.com/en/news/294160097.md) - [AAPL Stock Alert: What to Know as Apple Partners With Klarna to Lease iPhones](https://longbridge.com/en/news/294104418.md) - [How Hermès’ Entry Into Haute Couture And New Menswear Leadership At Hermès (ENXTPA:RMS) Has Changed Its Investment Story](https://longbridge.com/en/news/292359315.md) - [Hermes International reports Q1 results](https://longbridge.com/en/news/282810086.md)