Hermes shares tanked following an earnings report that disappointed investors amid the conflict in the Middle East, hitting luxury sales.
The group's consolidated revenue amounted to EU€4.07 billion in Q1, increasing 6% from the same time last year.
Despite the growth, this still fell short of analysts' €4.15 billion expectations.
While the company’s sales were stronger than those of its peers, like Kering and LVMH, it was still heavily impacted by the war in the Middle East, which contributed to a 13.4% year-over-year sales drop.
Organic sales for LVMH rose just 1% while Kering’s revenue fell by 6% year-over-year.
Group stores' sales for Hermes still increased by 7% despite significantly lower sales to concession stores in the Middle East and airports.
“In a tense geopolitical environment, Hermès maintains its course, true to its long-term strategy,” Hermes executive chairman Axel Dumas said.
“Supported by its abundant creativity, its uncompromising quality and the loyalty of its clients, Hermès is continuing its profitable growth in 2026 with confidence and conviction.
The luxury brand reported its greatest growth in the Americas (17%), with balanced growth across the U.S., Canada and South America.
Japan also had record growth of 10%, supported by strong footfall and the loyalty of local clients.
While European sales excluding France increased 10% due to local demand, France declined 3%.
The company said the decline in France was due to a slowdown in tourist flows linked to the situation in the Middle East.
Its leather and goods segment saw the largest growth of 9%, while its watches segment fell by 4%.
At the time of writing, Hermes (EPA: RMS) shares tumbled 8.22% to €1,636.50. The company’s market cap is €175.11 billion.
