Hermès International (EU:RMS) reported first-half 2026 results broadly in line with market expectations, with resilient demand across key international markets helping offset the impact of unfavourable exchange rates.
The French luxury group generated first-half revenue of €8.16 billion, matching the consensus estimate compiled by S&P Global Visible Alpha. Sales increased 6% at constant exchange rates and 2% on a reported basis compared with the same period last year, supported by solid growth in the Americas, Japan and Europe excluding France.
All geographic regions recorded revenue growth with the exception of the Middle East, which the company said “showed good resilience in a challenging environment.”
Second-quarter revenue reached €4.1 billion, representing constant currency growth of 7%. Hermès described this as “slight acceleration” compared with the first quarter, driven in particular by stronger trading in France, Japan and the Middle East.
Jefferies, which maintains a “buy” rating on the stock with a €2,000 price target, described the improvement as “modest.” The broker noted that second-quarter sales grew 6.7% excluding currency effects, compared with its sell-side consensus of 6.8% and a buyside expectation of around 7%, following 5.6% growth in the opening quarter of the year.
Recurring operating income rose to €3.35 billion, exceeding the S&P Global Visible Alpha consensus estimate of €3.29 billion. Operating margin reached 41.0%, only marginally below the 41.4% reported a year earlier despite the negative impact of foreign exchange movements.
Using its own consensus estimates, Jefferies calculated an operating margin of 41.1%, ahead of its forecast of 40.6%, adding that gross margin expanded by 46 basis points year over year “despite fx headwinds.” The broker also noted that the company did not identify any impact from tariffs during the reporting period.
Net profit attributable to shareholders totaled €2.24 billion, broadly in line with market expectations. Hermès said the figure included, as in the first half of 2025, an exceptional levy imposed on the profits of large companies in France. Excluding this charge, net profit reached €2.5 billion, equivalent to 30.7% of sales.
Diluted earnings per share came in at €21.32, slightly below both the S&P Global Visible Alpha consensus estimate of €21.37 and the €21.56 forecast cited by Jefferies.
Cash generation remained a highlight, with adjusted free cash flow increasing 18% to €2.18 billion, comfortably exceeding the consensus estimate of €1.95 billion. According to Jefferies, net cash rose by €2.2 billion year over year to €12.9 billion.
Across product categories, Jefferies said Leather Goods revenue increased 10.2% during the second quarter, slightly below its 11% forecast but ahead of the 9.4% growth recorded in the first quarter. The performance gap between the Leather Goods division and the rest of the business also narrowed compared with the previous quarter.
Regionally, Japan delivered one of the strongest performances, with sales rising 12.3%, comfortably exceeding Jefferies’ 10.3% forecast. Asia-Pacific excluding Japan recorded growth of 2.5%, below the broker’s 4% estimate, while revenue in the Americas increased 13.7%, matching expectations after growing 17.2% in the first quarter.
Looking ahead, Hermès said it “confirms an ambitious goal for revenue growth at constant exchange rates” during the second half of the year despite “economic, geopolitical and monetary uncertainties around the world.”
Jefferies said its forecasts assume second-half revenue growth of 8.3% alongside a 63-basis-point decline in EBIT margin. The broker added that investors will be watching closely to see whether management still expects sales momentum to strengthen during the second half and “the extent to which the ongoing lack of growth in China may also reflect the group restricting the supply of some products in that market.”
The company also disclosed that adverse currency movements reduced first-half revenue by more than €360 million.
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