Hermes International reported disappointing sales figures for the third quarter, attributing the slowdown to sluggish demand and spending curbs among consumers in China, according to a report by The Economic Times. Revenue in the geographical segment that includes China—which accounts for approximately 42% of the French luxury group's total turnover—flatlined at constant exchange rates, missing consensus estimates that anticipated growth of around 1.6%.
Following the earnings release, Hermes shares slid by as much as 9% in Paris trading, marking the brand's sharpest intraday decline since July. The retreat brings the stock's year-to-date loss to 41%, putting the company on course for its weakest annual market performance since listing publicly in 1993. In an analyst note, James Grzinic of Jefferies observed that the quarterly numbers would likely lead to a very difficult trading session.
The report stated that expectations for a luxury sector recovery in 2026 have been constrained by prolonged weakness in China and Middle East geopolitical tensions, which disrupted retail activity in major luxury shopping hubs such as Dubai. In China, affluent consumer demand has been tempered by a property sector downturn, weak domestic financial markets, and regulatory initiatives aimed at taxing offshore wealth.
The challenges reported by Hermes reflect broader industry-wide pressure across major European luxury groups. Rival conglomerate LVMH Moet Hennessy Louis Vuitton recorded a decline in its sales in China a week earlier, while Kering, the parent group of Gucci, was also preparing to release its quarterly revenue results.
Sources
- The Economic Times · 2026-10-22
