This article was originally written by Chelsey Dulaney for The Wall Street Journal and published on July 29, 2022.
The rich keep spending.
Luxury goods maker Hermes International’s stock soared Friday after the company reported sharply higher profit and revenue despite global recession fears.
Shares of the Birkin bag maker rose 5.5% in Paris, making it one of the best performers in the benchmark Euro Stoxx 50 index.
Citigroup analysts described Hermes shares as a potential “place to hide” in the second half of the year. While retailers like Amazon and Walmart have flagged weakening consumer demand in their latest results, the wealthy customers of Hermes and other luxury goods appear to still be spending.
Hermes revenue rose 23% in the first half of the year excluding currency swings, while its operating margin rose to a record high of 42%. The company said sales are rebounding in China–a crucial sales market for luxury goods–as Covid-19 restrictions ease.
Results from luxury retailers LVMH Moët Hennessy Louis Vuitton, Prada and Moncler have also topped Wall Street expectations this week. LVMH’s shares have gained 5.2% this week, while Prada’s stock is up 2.8% and Moncler has risen 11%.
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