Q3 2024 - Hermès Int'l - Analysis

Unmatched +30% two-year stack sales growth (at constant FX) vs. LVMH's FL&G at -3%

Today, Hermès released its Q3 2024 sales report with a brief conference call to discuss what they’ve been seeing for quite some time. In that regard, this earnings report was boring. It’s fair to say that Hermès is the only one left to generate 30% sales growth at constant FX on a two-year compounded stack (2022-2024), coming off pricing tailwinds and solid volume growth. Indeed, the stacks are normalizing, and we ultimately expect them to level out at 25%.

LVMH, which is oftentimes called the must-own leather goods company for the quality value investor, has comped -3% over the same period. Hence, it shouldn’t surprise anyone that despite its optically high valuation, Hermès keeps delivering what it’s been doing for decades: focusing on the internal workbook of controlling their own destiny and growth algorithm.

Let’s take a closer look at the report and our valuation model.