The company's second-quarter revenue rose 6.7% at constant exchange rates, reaching approximately €4.1 billion. Analysts had expected growth of 6.51%, according to Bloomberg.

Scarcity Strategy vs. Geopolitics

Against the backdrop of geopolitical instability in the Middle East and a massive departure of "aspirational" shoppers (those buying luxury items using saved or borrowed funds), the entire luxury sector is going through tough times. However, Hermès is being saved by a battle-tested strategy of artificial scarcity and endless waitlists for its legendary Birkin and Kelly handbag models.

How regional growth broke down:

• Americas: +13.7% (the primary growth engine).

• France: +6.2% (supported by steady tourist traffic).

• Middle East: Positive sequential dynamics despite negative overall figures. The region "demonstrated impressive resilience amid an unstable geopolitical environment," the company noted.

Selective Luxury: Who Wins and Who Loses

Hermès's financial results contrast sharply with the dismal performance of market leader LVMH (Moët Hennessy Louis Vuitton SE), as well as brands like Burberry Group Plc and Moncler SpA, all of which are suffering due to heavy reliance on traditional apparel and leather goods segments.

At the same time, strong growth at Swiss group Richemont (owner of jewelry houses Cartier and Van Cleef & Arpels) proves that affluent clients are still willing to spend on top-tier luxury—they have simply become significantly more selective in their purchases.

Prior to the earnings release, Hermès shares in Paris had fallen roughly 20% year-to-date. A number of analysts are openly questioning whether the brand will eventually have to take an unpopular step: intentionally trimming leather goods production to preserve its exclusivity and brand value.