Hermès International stock shows split luxury demand picture

Hermès International's third-quarter performance highlighted a widening gap between its core leather business and other luxury categories. A Reuters report published by Asharq Al Awsat on October 22, updated on November 11, said currency-adjusted third-quarter sales rose 4.3% year on year to 4.10 billion euros. Analysts polled by Visible Alpha had expected growth of 5.2%.

The result marked the weakest quarterly growth rate since the pandemic disruption in early 2020. The slowdown adds to investor scrutiny of Hermès after years of exceptional expansion and leaves the company more exposed to selective spending in several luxury markets.

Core Leather Business Stays Strong

Leather goods, including the Birkin and Kelly handbag franchises, delivered the clearest support. Sales in the division increased 10.8% from a year earlier, according to the Reuters report. The performance suggests that Hermès continues to benefit from the appeal and pricing power of its most tightly controlled products.

The wider category picture was less supportive. Ready-to-wear and accessories sales fell 2% year on year, marking a reversal after several years of growth. Finance chief Eric du Halgouet attributed the contraction to weak Chinese demand and said the division continued to grow in other regions.

China Remains the Main Risk

Du Halgouet described the Chinese market as very difficult but said Hermès remained confident in its long-term prospects there and would continue investing. China is the group's largest market, making regional demand a key test for the premium valuation attached to the shares.

Management also maintained its plan to increase total production volumes by about 6% in the coming years. That approach aims to support growth while preserving the scarcity that underpins the brand's pricing and desirability. Resale-market availability for Birkin handbags has nevertheless prompted debate about whether that scarcity is weakening; management said the bags' appeal remains intact.

Stock Trades Above Tuesday Close

Hermès International stock traded at 1,353.00 euros on Lang & Schwarz at 11:43 CET on Wednesday, November 11, 2026, 0.52 percent above the Xetra close of Tuesday, November 10. The move provides a modest recovery point while investors assess whether leather goods can continue to offset pressure in watches, beauty and other categories.

The immediate investment question is less about demand for the flagship handbags than about the breadth and durability of growth across the portfolio. A prolonged weakness in China or a sharper slowdown in adjacent categories could put further pressure on earnings expectations, even if the leather division remains robust.

The broader CAC 40 remains the relevant market backdrop for French luxury shares, as shown in current market reports.

Investors will next look for evidence that leather goods momentum can offset weaker categories and that Chinese demand is stabilizing. More news and analyses on Hermès International stock.