Luxury retailer Hermès‘ recent store expansion into China appears to have paid off.
Despite concerns of China’s slowing economy and the trade war with the U.S., luxury retailer Hermès International S.A. reported revenue growth in the region on Wednesday and said it expects the trend to continue for the remainder of the fiscal year.
The French luxury goods manufacturer noted, however, that its revenue forecast is ambitious considering global economic headwinds. The company remains optimistic about the prospects for expansion in China, particularly as it launched its official .cn website last month to drive online sales for the rest of the year and into next.
CEO Axel Dumas said during the earnings call, “We have not seen any change of rhythm in China for now.” Dumas’ comments follow other luxury brands’ upbeat statements on the future of their products in China.
The company, best known for its Birkin handbags, noted in its earnings press release that some of its growth in China can be attributed to the opening of three stores in the country, one of which is in Hong Kong. Hermès opened its Xi’an store in the third quarter.
In the third quarter, Hermès saw revenue from Asia (excluding Japan) increased 11.8 percent from the same quarter last year. The Americas topped that growth rate in the quarter at 13.9 percent year-on-year.
Asia, excluding Japan, was the company’s market with the highest revenue growth rate year-to-date at 13.8 percent year-on-year, based on constant exchange rates. It was followed by the Americas at 13 percent. At current exchange rates, however, Asia-Pacific revenue grew 8.8 percent from the previous, while the Americas increased by 5.5 percent. Overall, the company’s revenue in the quarter grew 6.6 percent year-on-year at current exchange rates.