Hermès Stock Falls 13% After Q1 Revenue Misses Estimates

TLDR

• Hermès reported Q1 2026 revenue of €4.07 billion, up 5.6% organically but below the 7.1% consensus estimate.
• The stock dropped over 13% in Paris trading, wiping more than $20 billion from the company’s market value.
• Middle East conflict cut roughly 150 basis points from revenue growth, with regional sales down 13.4% year-on-year.
• Asia-Pacific (ex-Japan) grew just 2.2%, a sharp slowdown from 8% growth in Q4 2025, raising concerns about China momentum.
• The Americas was the standout, posting 17.2% growth and beating expectations comfortably.

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Hermès shares took a beating on Wednesday after the French luxury house reported first-quarter revenue that fell short of what the market was expecting. The miss, driven by weakness in the Middle East and Asia, sent the stock down more than 13% in Paris — one of its worst single-day drops in years.

The company posted revenue of €4.07 billion for the three months to March 2026, a 5.6% increase on an organic basis. That sounds decent until you compare it to the 7.1% growth analysts had pencilled in. It also marks a step back from the 9.8% growth Hermès delivered in Q4 2025.

Hermès International Société en commandite par actions (RMS.PA)

At reported exchange rates, the picture was even less flattering. Currency headwinds of €290 million dragged the headline number into negative territory year-on-year. Analysts had expected €4.16 billion.

The Iran war played a direct role. Jefferies analysts estimated the conflict in the Middle East knocked around 150 basis points off first-quarter revenue growth. Wholesale sales to concession stores in the region and at airports were hit hardest. Overall, the Middle East saw revenue fall 13.4% year-on-year.

Asia-Pacific Slowdown Raises Questions

The region drawing the most investor concern wasn’t the Middle East, though. It was Asia-Pacific, excluding Japan.

That segment grew just 2.2% in Q1 — well below the 5.7% consensus estimate and a stark deceleration from the 8% growth posted in Q4. For a brand as exposed to Chinese consumer spending as Hermès, that kind of slowdown gets attention fast.

The stock’s decline heading into the report already reflected two fears, according to Jefferies — Middle East exposure and slowing Chinese momentum. Wednesday’s numbers didn’t ease either worry.

Americas Offers a Bright Spot

Not everything in the quarter pointed lower. The Americas delivered 17.2% growth, coming in well ahead of forecasts. That’s a strong performance in a region that has become increasingly important to luxury demand.

Despite the Q1 miss, Hermès stood by its medium-term guidance. The company said it has “moved into 2026 with confidence” even against an uncertain economic and geopolitical backdrop.

The stock fell as much as 13.6% in early Paris trading before settling around 12.93% lower, at €1,551.50. More than $20 billion in market value was erased in a single session.

Hermès carries a current P/E ratio of 41.69x, reflecting its premium positioning in the luxury goods sector. Its GF Score stands at 96/100, and its financial strength is rated 9/10.

The company said Middle East trends have shown improvement so far in the second quarter.

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