2024-05-31 08:17:41 ET
Summary
- Hermès has outperformed the S&P 500 during the Covid crisis and has shown resilience in the face of market disruptions.
- The company's business model relies on manufacturing skills, controlled distribution, and expanding its brand reach to other market segments.
- Hermès has maintained revenue growth, improved profit margins, and has a healthy balance sheet, but valuation multiples are high.
I have recently been reviewing luxury brands, mainly because these companies, when well-managed, are capable of performing better than the general market during stressful periods. Hermès ( HESAY ) ( HESAF ) is a good example. Below you can see that coming into the Covid crisis, Hermès was performing better than the S&P 500, and it kept it that way even through the most difficult days. Even if gold was a better performer during the peak crisis days, the truth is that it didn't take long for Hermès to leave everyone in the dust....
Read the full article on Seeking Alpha
For further details see:
Unpacking Hermès: A Model For Luxury Brand Success