Luxury sales soften
Hermès and Kering shares fell after Hermès reported sales short of forecasts, with coverage linking the weakness to the Iran war reducing Middle Eastern demand and European tourism. ( ) Business of Fashion also reported that Hermès had its biggest share drop on record as growth slowed. (businessoffashion.com)
Hermès shares sank after the Birkin maker reported first-quarter sales growth that missed forecasts, rattling a luxury sector already hit by weaker travel spending. (businessoffashion.com) Hermès said on April 15 that first-quarter revenue reached €4.1 billion, up 6% at constant exchange rates, with double-digit growth in the Americas, Japan and Europe excluding France. The company said it was operating in a “complex geopolitical context.” (assets-finance.hermes.com) Business of Fashion reported the growth rate missed analyst expectations and sent Hermès shares into their biggest one-day drop on record on Wednesday, April 15. Reuters and CNBC reported the stock fell sharply in Paris trading as investors reassessed one of the sector’s most resilient names. (businessoffashion.com (cnbc.com) The pressure did not stop with Hermès. Reuters reported Kering shares fell as much as 10% on April 15 after Gucci sales dropped 8% in the first quarter, the brand’s 11th straight quarterly decline. (usnews.com) Kering said retail revenue in the Middle East declined 11% in the quarter as the Iran war hurt spending by regional shoppers and curtailed international travel. The Financial Times said the conflict also reduced tourist traffic into Europe, cutting a key source of luxury demand. (newsbreak.com) (ft.com) That marks a sharp turn from late 2025, when Hermès said the Middle East was one of its strongest regions. In its full-year results released on February 12, the company said the “Other” area, which mainly includes the Middle East, grew 15% at constant exchange rates, led in part by the United Arab Emirates. (assets-finance.hermes.com) The new numbers also show how exposed luxury groups remain to travel retail, airport shopping and tourist purchases even after years of talking up pricing power and wealthy local clients. Business of Fashion said the Middle East war has also weighed on duty-free and travel-retail sales for LVMH, Estée Lauder and L’Oréal. (businessoffashion.com) Hermès still grew faster than many rivals, and its leather goods business remained positive, but investors had priced the company for steadier outperformance. On April 16, Financial Times market data showed Hermès shares were still down nearly 29% over 12 months after setting a new 52-week low during Wednesday’s session. (ft.com) The next test is whether the shock proves temporary or spreads into a broader slowdown across luxury’s most profitable channels. For now, the sector’s safest name no longer looks insulated from war, weaker tourism and a more fragile global customer. (reuters.com)
