- Hermès has developed an exceptionally profitable business by operating at the very top end of the luxury goods market.
- It has successfully managed to grow at a double digit clip, without harming the perception of its brand, thanks to increasingly wealthy consumers in emerging markets.
- COVID presented a serious headwind in the first half of last year as sales and profit margins slumped.
- The shares trade for around €880 each on the Paris Euronext, equal to over 60x pre-COVID earnings.
- Even with a justified premium valuation, investors would need years of double digit profit growth to burn the current valuation off.
For further details see:
Hermès: Increasingly Risky At 60x Earnings