Hermès International H1 2026 Results
Hermès International reported first‑half 2026 diluted earnings per share of €21.32, falling short of the €21.56 consensus, which triggered a more than 9% decline in the share price on Wednesday. Recurring operating income reached €3.35 billion, surpassing the €3.29 billion analyst estimate, while total revenue was €8.16 billion, exactly matching the consensus figure. Currency movements reduced reported revenue by over €360 million, although constant‑exchange‑rate sales growth accelerated to 6.7 % in the second quarter from 5.6 % in the first quarter.
Regionally, Europe including France posted a 7.4 % increase at constant rates, beating the 6.6 % estimate; the Americas grew 13.7 % versus a 13.3 % consensus; Japan expanded 12.3 % against a 10.3 % forecast; and Asia‑Pacific ex‑Japan was the weakest, with second‑quarter sales up only 2.5 % versus a 4.0 % expectation. By product line, leather‑goods sales rose 10.2 % at constant rates, slightly below the 11 % estimate, silk and textiles grew 12.2 %, while perfume and beauty declined 9.5 %.
The recurring operating margin improved to 41.0 % of sales, above the 40.6 % consensus but below the 41.4 % recorded a year earlier. Adjusted free cash flow increased 18 % to €2.2 billion, and the restated net cash position rose by €2.2 billion year‑on‑year to €12.9 billion. The company did not report any tariff impact and reiterated an ambitious, though unspecified, revenue‑growth target at constant exchange rates despite ongoing geopolitical and monetary uncertainties.
Jefferies maintained a “buy” rating with a €2,000 price target, noting that the investment discussion is likely to remain centred on the group’s relatively modest growth by its historical standards and questioning whether limited growth in China reflects a deliberate restriction of product supply in that market.