PARIS — Loyalty, quiet luxury and a multilocal mix helped Hermès International gallop ahead of the pack with a sales jump of 28 percent at constant currency against the backdrop of a U.S. slowdown for luxury within the second quarter, further underlining the French brand’s resilience despite economic softening and geopolitical worries.

“During tough financial times there’s a flight to quality, and possibly we reap some advantages from that,” said Hermès executive chair Axel Dumas following the discharge of the outcomes.

He emphasized the home focuses on its artisans and the concept of French construction. No blingy fashion shows or celebrity campaigns here. This quiet approach to luxury boosts the perception of the brand, which it may possibly lean on in tumultuous times.

“People were somewhat anxious…and Hermès is recognized for its quality no matter other people’s price positioning,” Dumas added.

Their singular concentrate on the Hermès name gives them a bonus over their more maximal conglomerates that house competing brands. “They will not be attempting to construct a diversified empire — they only concentrate on organic growth, which provides them higher return on invested capital,” Bernstein analyst Luca Solca told WWD.

That growth was particularly impressive within the Americas in the primary half, with sales leaping 20 percent within the region, far outpacing its competitors.

In recent results Compagnie Financière Richemont, parent company to jewelry maisons Cartier, Van Cleef & Arpels and Buccellati, in addition to luxury brands Chloé, Delvaux and Dunhill, saw sales within the Americas down 2 percent within the second quarter, which it credited to an overall slowdown in luxury spending from aspirational consumers.

LVMH Moët Hennessy Louis Vuitton said sales were down 1 percent within the U.S. in the identical period, from an 8 percent increase at the start of the 12 months. The Louis Vuitton, Loewe, Dior, Givenchy and Fendi parent company said sales drops of entry level products and a slowdown in second-tier cities “were a transparent sign” that aspirational customers were changing their shopping habits.

But those concerns didn’t affect Hermès’ local-first strategy and acquisition of those young, aspirational consumers.

“Particularly, the center class is younger, more quite a few and richer,” Dumas said. Price hikes of three.5 percent within the U.S. that rolled out at the start of the 12 months seemingly had no effect on demand. Dumas noted that boom in sales was based on volume — not price — growth to hit its numbers.

Stores in Los Angeles and Recent York “outperformed,” Dumas said, but the chief noted that while conventional wisdom is that demand is weakening amongst aspirational customers outside of major cities, it has not been the case at Hermès. “It’s true in comparison with perhaps some others our retailing is tighter within the U.S., but all of our business [categories] have grown,” he said.

He added that the expansion of the center class and shifting demographics in Asia and the U.S. are driving sales.

The general second-quarter results beat analyst expectations by 4 points, securing the corporate’s position as the posh sector’s leader. The stock closed up 3.94 percent on the Paris Bourse following the strong numbers. It was a mixed bag for luxury stocks on Friday, with Kering down 1.15 percent on the news that it has purchased a 30 percent stake in Valentino, with an choice to buy the remainder, and Prada down 3.76 percent after it revealed it’s launching beauty. LVMH barely budged, up 0.11 percent.

“Hermès blows the entire luxury goods industry out of the water,” Solca said. “Noblesse oblige, Hermès stands head and shoulders above anyone else.”

The corporate had a lot pent-up demand coming out of the pandemic, coupled with a slowdown in production over those years, that it may possibly dip into its long waiting lists. “They sell lower than the market would take and so they profit from very strong desirability. This provides them steadier growth,” Solca said. “This permits them to plow through patches of softer demand.”

Considering the pent-up demand, it’s likely the market would absorb much more, giving them much more wiggle room on pricing within the face of any potential slowdown, though Dumas indicated it is just not within the cards for the second half of the 12 months.

Revenues reached 3.32 billion euros within the three months to June 30. The posh house continued its strategy of store openings in smaller cities within the U.S., with a latest outpost in the vacation destination of Aspen, Colorado, in June, which was hot on the heels of a gap in Naples, Florida, in February. It also had activations in Austin, Texas, in May.

The manager highlighted the local-first strategy will proceed through the remainder of the 12 months, opening a latest store within the L.A. suburb of Topanga within the U.S, and Chengdu in China, plus revamps in Hamburg, Germany, and Bordeaux, France, in Europe. Communications spend goes to leap, Dumas said, and expect activations and outreach to extend within the second half to “make up for lost time” of pandemic-era closures.

Dumas also noted that it’s not only handbags driving sales. Shoes, jewelry and ready-to-wear have been major growth categories this 12 months.

The jewellery and homewares category was up 36.1 percent at constant exchange within the second quarter; ready-to-wear up 35.1 percent, and silks including its iconic scarves, which sell well at travel points, up 25.8 percent.

The corporate plans to open 4 latest leather goods production sites over the subsequent 4 years in an try and help fulfill the seemingly insatiable appetite for its handbags, including the Birkin and Kelly models. Sales of leather goods were up 23.2 percent at constant exchange within the second quarter.

Beauty bumped up its sales within the second quarter by 12.4 percent, but the corporate will concentrate on this as a growth category within the second half and launch latest eye products later this 12 months.

Sales were up 32.3 percent in Asia within the second quarter, with China leading the way in which because it normalizes following years of pandemic-era policy and rolling store closures. The region rebounded with a powerful Chinese Recent Yr, and the corporate reopened its Beijing store in The Peninsula in April. Singapore, Thailand and South Korea were other standouts contributing to the region, outside of Japan, which remained strong on the loyalty of local clients.

While sales in China are strong, Chinese tourists are staying regional with intra-Asia tourism. Europe has benefited from increased tourist flows attracted by a weak euro currency, but those are mostly from the Middle East, U.S. and Southeast Asia.

“The Chinese will not be yet highly present in France, and only marginally in Europe,” executive vp of finance Eric du Halgouët said. Duty-free airport sales have strongly rebounded, he added.

In the primary six months of 2023, revenue was up 25 percent at constant exchange to six.7 billion euros, and the corporate hit a milestone of 33 percent consolidated net profit at 2.23 billion euros.

“The 2023 first half results reflect the strength of the pillars of the artisanal model of the home,” Dumas said.

Barclays analysts concluded in a trading note: “The underlying trends thus seem solid, in our view, and we’d expect the outperformance of Hermès to proceed.”