French luxury group Hermès International SCA recorded subdued third-quarter performance, driven by weakening demand in China and regional headwinds across key shopping markets, Bloomberg News reported via NDTV Profit. Revenue in the geographical segment encompassing China—which represents approximately 42% of the company's total sales—flatlined at constant exchange rates, trailing analysts' projections of 1.6% growth. Overall sales grew by 4.3% during the quarter.
Following the announcement, Hermès shares fell by up to 9% in Paris trading, their sharpest single-day retreat since July. The stock has tumbled 41% so far this year, putting the company on course for its weakest annual share performance since its public market listing in 1993. Jefferies analyst James Grzinic stated in a research note that the quarterly figures would likely result in a painful trading session.
According to the report, anticipated luxury sector rebounds have been undermined by protracted economic softness in China as well as conflict in the Middle East that has disrupted shopping destinations such as Dubai. In China, affluent consumer spending has been curtailed by a ongoing property slump, underperforming financial markets, and official regulatory scrutiny of offshore assets.
Analysts quoted in the report highlighted growing scrutiny around Hermès' exclusivity and broader industry health. Increased retail and secondary-market availability of signature Birkin and Kelly handbags has raised questions regarding brand exclusivity, while UBS analyst Zuzanna Pusz indicated the results may prompt reassessment of 2027 forecasts and corporate scale. The performance follows similar Chinese revenue contractions reported at rival LVMH Moët Hennessy Louis Vuitton SE.
Sources
- NDTV Profit · 2026-10-22
