EARNINGS REPORT: The French luxury house held its ground this half, with steady profit, growth in Japan and every other region bar one, and the Middle East the sole market still in decline.
Hermès reported H1 2026 revenue of $9.30 billion (€8.16 billion) on Wednesday 29 July, up 6.1%. Operating profit came to $3.82 billion (€3.35 billion), with the margin easing slightly to 41.0% from 41.4% a year earlier. Net profit was $2.55 billion (€2.24 billion), essentially flat against $2.56 billion (€2.25 billion) in H1 2025; excluding a one-off French corporate tax contribution levied on large companies in both periods, underlying net profit was $2.85 billion (€2.5 billion). The second quarter alone brought revenue of $4.67 billion (€4.09 billion), a small acceleration on the first quarter’s growth rate.
Cash generation held broadly steady, with one notable exception. Free cash flow, after investment and lease costs, rose 18% to $2.49 billion (€2.18 billion). After paying $2.18 billion (€1.9 billion) in dividends and $228 million (€0.2 billion) in employee share buybacks, the Group’s net cash position stood at $14.73 billion (€12.9 billion) at the end of June, up slightly from $14.56 billion (€12.8 billion) in December.
Hermès also grew its workforce by more than 600 people over the half, including 300 in France, taking headcount to 27,107. Executive Chairman Axel Dumas said the results reflected “the strong desirability of its 16 métiers and the trust of its clients,” adding that the group was looking to the second half “with confidence.”
Leather Goods Lead, The Middle East Lags
Leather Goods and Saddlery, Hermès’ biggest business by revenue, grew 9.8% to $4.29 billion (€3.76 billion), helped by strong demand for new bag styles including the Cliquetis, Kelly Hobo and Double Longe. The house also opened a 25th leather workshop, in Loupes, with three more planned by 2030. Silk and Textiles grew 9.7% to $535 million (€469 million) and Ready-to-wear and Accessories grew 2.0% to $2.51 billion (€2.20 billion), both accelerating in the second quarter.
Watches was flat over the first half before returning to growth in the second quarter, with a new titanium version of the H08 unveiled at Watches & Wonders in Geneva. Perfume and Beauty was the only category to decline, down 4.5% to $266 million (€233 million), even as the house launched a new fragrance and its first foundation.
By region, every market grew except the Middle East, grouped under Hermès’ “Other” category, which fell 4.2% to $376 million (€330 million); Hermès said conditions improved through the second quarter, driven by local customers. The Americas led with growth of 15.3% to $1.81 billion (€1.59 billion), a performance Hermès called remarkable and balanced across countries, with a new Los Angeles ready-to-wear unveiling in June.
Japan followed, up 11.0% to $910 million (€798 million), supported by strong local traffic and new stores in Osaka and Nagoya. Asia-Pacific excluding Japan grew 2.4% to $4.03 billion (€3.53 billion), with continued growth in Greater China and what Hermès called an outstanding performance in Korea, alongside new store openings in Hanoi and Beijing. Europe excluding France grew 8.8% to $1.33 billion (€1.17 billion), helped by a new Hermès Maison on London’s Bond Street, while France itself grew 1.8% to $858 million (€753 million) on a recovery in tourist traffic.
How the Three Luxury Giants Stack Up
Hard luxury and repeat-purchase categories outperformed fashion at all three houses this week. Hermès’ leather goods grew nearly five times faster than its ready-to-wear business, LVMH’s Watches & Jewellery grew 11% in the second quarter against 1% for Fashion & Leather Goods, and Kering‘s Jewelry business grew 20% over the half while Gucci fell 5%. Hermès’ 41.0% operating margin remains far ahead of LVMH’s 22.5% and Kering’s 12.8%, a gap that has held for years.
On growth, Hermès led at 6.1%, ahead of LVMH’s 2% and Kering’s 1%, though both LVMH and Kering were recovering from steeper declines in their core fashion businesses than Hermès has had to contend with. All three pointed to the Middle East as a drag on results, though the size of that drag differed: Hermès’ decline there was contained to a single, smaller region of its business, LVMH estimated a one-point hit to group growth overall, and Kering reported an 8% decline in the rest-of-world category that includes the region. Profit told a more mixed story: Hermès and LVMH both held net profit broadly flat year-on-year, while Kering’s fell 60% on non-recurring charges.