Hermès Plummets 13% on the Anniversary of the RMS Titanic Disaster

Key Takeaways

• The fashion sector is experiencing significant declines at the start of trading.
• Hermès International shares fell over 13% on the anniversary of the Titanic sinking.
• The stock reached its lowest level in over three years, with a year-to-date drop of nearly 28%.

Q1 2026 Results Overview

Hermès reported a revenue of €4.07 billion for Q1 2026, reflecting a decline of 1.4% year-over-year, primarily due to a negative currency effect of €290 million. Market expectations were around €4.13–4.16 billion. Organic sales growth at constant exchange rates was +5.6%, falling short of the expected +7.1% growth.

Segment results showed dramatic declines in reported currencies, particularly in watches (-10%) and apparel (-6%). However, when adjusted for currency effects, watches were down only -3.7%, and apparel showed flat growth at +0.4%.

Geographic Performance

• Americas: +17.2% - Strong growth across all segments.
• Japan: +9.6% - Strong local customer loyalty.
• Europe (excluding France): +9.7% - Driven by local demand.
• France: -2.8% - Decline in tourist traffic linked to geopolitical issues.
• Asia-Pacific (excluding Japan): +2.2% - Slowdown from previous quarters.
• Middle East: -5.9% - Significant impact from regional conflicts.

Segment Results at Constant Exchange Rates

• Leather Goods and Saddlery: +9.4% (€1,849 million) - Strong demand and production capacity growth.
• Clothing and Accessories: +0.4% (€1,076 million) - Flat organic growth.
• Silk and Textiles: +7.8% (€257 million) - Driven by creativity.
• Other Segments: +6.8% (€540 million) - Continued momentum in jewelry and home products.
• Perfumes and Beauty: +0.2% (€127 million) - Stable sales.
• Watches: -3.7% (€135 million) - Challenging environment but expansion plans are underway.
• Other Products: +3.6% (€86 million) - Manufacturing for third-party brands.

Market Analysis

Despite the challenges, Hermès is committed to its long-term growth strategy and has repurchased over 31,000 shares for €60 million in Q1. CEO Axel Dumas emphasized the company's resilience in a tense geopolitical environment, maintaining an operating margin exceeding 41%.

The stock chart indicates a strong uptrend since 2023, peaking above €3,100 in early 2025, followed by a significant drop of over 11.85%. The current price is below the EMA200, indicating a bearish trend, with strong resistance/support around €2,000–€2,100.