French luxury group Hermes confirmed on July 30 its outlook for full-year sales growth as it turned rising revenue for all parts of the world in the first half despite global economic uncertainty.
First-half sales rose by 7.1 percent globally to 8 billion euros (US$9.2 billion), including double-digit growth in the United States and in Europe. Excluding currency effects, which had a negative impact of 77 million euros on revenue in the first half of the year, sales would have risen by eight percent.
Sales rose by three percent in the Asia region, excluding Japan (+16%), the company saying sales had also risen in China, a key market for luxury firms that has been soft recently.
"I don’t see at the moment a fundamental change in the sales climate in China, which remains favourable for us," chief executive Axel Dumas told journalists.
Net profit dipped five percent in the first half of the year to 2.2 billion euros due to an exceptional tax France levied on major firms, but Hermes said its recurring operating profit had climbed six percent to 3.3 billion euros.
Perfume & Beauty segment under pressure?
Leather Goods and Saddlery, the group’s core business, posted an 11.3% increase to 3.58 billion euros. Ready-to-wear and Accessories also grew, up 4.3% to 2.25 billion euros. However, Perfume & Beauty sales fell 4.1% to 248 million euros, and watches declined 8.9% to 281 million euros.
After holding steady in the first quarter (-0.1%), Perfume & Beauty sales dropped 8% in the second quarter. It’s the first contraction since the brand launched its beauty line in 2020.
Though sales of fragrances and beauty products account for just over 3% of Hermès’ total revenue, the drop contrasts with the momentum of other luxury groups, such as Kering or LVMH, in this business segment.
Commenting on these figures, the French group cited a high base effect from last year’s fragrance launches, including Hermessence Oud Alezan, Barénia and H24 Herbes Vives, while H1 2025 saw fewer high-impact debuts, with only Terre d’Hermès Eau de Parfum Intense and Rouge Brillant Silky lipstick being introduced.
Yet many analysts question whether Quiet Luxury translates to beauty. The strategy, anchored in artisanal craftsmanship and understated elegance, has delivered strong results across most of the group’s activities, but it may fall short in beauty, where growth, particularly in Asia, is increasingly fuelled by social media. In China, for instance, partnerships with influencers or celebrities, as well as spectacular retail experiences, are almost essential.
Of course, no one expects Hermès to partner with an Onlyfans star, as Urban Decay (L’Oréal Group) recently announced. It is only natural that the brand seeks to remain consistent with its codes of attention to detail, elegance, and restraint across all activities. Yet in a sector as fast-moving as beauty, the competitive landscape may call for more than unveiling a collection of lipsticks within six months, no matter how beautiful or high-quality they are. Adding to the pressure, the arrival of Louis Vuitton Beauté has further heightened competition in the ultra-luxury segment.
This first setback in beauty has had minimal impact on the group’s overall performance. Yet, with many luxury houses making beauty central to their growth strategies, can such a prestigious brand afford to fall behind?
