Hermès and Kering Shares Plummet as Middle East Conflict Hits Luxury Sales

Shares in French luxury groups Hermès and Kering tumbled on the Paris Stock Exchange on April 15, 2026, after both companies reported first-quarter results hit by the war in the Middle East and adverse currency movements. Hermès stock fell 12.17 (%) — Hermès share price drop in early Paris trading to 1,568.50 euros by 9:13 AM Paris time, while Kering shares dropped 10.23% to 251.40 euros around the same hour, dragging the CAC 40 down by roughly 0.56% to 0.60%. Hermès reported first-quarter revenue of 4.07 billion euros, a decline of 1.4% year-on-year in reported terms, as currency fluctuations alone stripped 290 (million euros) — negative currency impact on Hermès Q1 revenue from the group's top line. At constant exchange rates, sales grew 5.6%, falling short of the analyst consensus of 7.44% compiled by Visible Alpha. The broader Paris market was weighed down by the sharp declines of its luxury heavyweights, with Frankfurt, London, and Milan trading near equilibrium at the same time.

Middle East war cuts Gulf shoppers and airport sales The conflict in the Middle East delivered a concentrated blow to Hermès from March onward, particularly in the Gulf states and in France, where tourist flows dried up. The Middle East region posted a 6% decline in sales at constant exchange rates, with revenue falling to 160 million euros from 185 million euros in the first quarter of 2025. Sales in luxury malls in the United Arab Emirates collapsed by 40% in March alone, according to Hermès Chief Financial Officer Eric du Halgouet. Wholesale activity was significantly affected by lower sales to concession stores, particularly in the Middle East and at airports. Sales in France declined by 2.8%, driven by weaker tourist spending, especially in March. Hermès stores in Italy, Switzerland, and the United Kingdom were also hit by fewer Middle Eastern shoppers, du Halgouet confirmed on a call with reporters. Despite the regional turbulence, sales in the group's directly operated stores increased by 7%, and the company recorded double-digit growth in America, Japan, and Europe excluding France.

„The Middle East, down by 6%, was of course significantly impacted by the geopolitical events affecting the region in March” — Eric du Halgouet via RTE.ie

Middle East: -6, France: -2.8, Asia Pacific (ex-Japan): +2.2, Group total: +5.6

Hermès International was founded in 1837 by Thierry Hermès in Paris, initially specializing in saddlery and harness making. The company has grown into one of the world's leading luxury goods houses, known for products including the Birkin and Kelly handbags, silk scarves, and perfumes. The Middle East had been the fastest-growing region for Hermès in 2025, before the conflict disrupted consumer activity and tourist flows from March 2026 onward. The luxury sector had broadly hoped for a recovery in 2026, driven by stronger performance in the United States and China, but the war in Iran cast a shadow over those expectations across the industry.

Kering's Gucci misses forecasts by wider-than-expected margin Kering, the French luxury holding company that owns Gucci, Yves Saint Laurent, and Balenciaga, also reported worse-than-expected results, sending its shares down more than 10%. Analysts at Bernstein noted that Kering "did worse than expected," with flagship brand Gucci posting an 8% decline in organic growth against a forecast of minus 6%. Kering acknowledged that the broader consideration going forward relates to potential impacts on global tourism trends and the macroeconomic backdrop. The group's results compounded a difficult week for the Paris-listed luxury sector, following similarly weak figures from LVMH earlier in the week. LVMH Chief Financial Officer Cécile Cabanis said revenue at the group's key fashion and leather goods division — which includes Louis Vuitton and Christian Dior Couture — would have been "flattish" rather than negative had it not been for the conflict. Before April 15, Hermès shares had already fallen approximately 16% in 2026, compared with a roughly 25% drop in LVMH shares over the same period, reflecting the relative resilience of Hermès' managed-scarcity business model during periods of market stress.

„Revenue at LVMH's key division would have been flattish instead of negative had it not been for the conflict” — Cécile Cabanis via Bloomberg Business

Hermès executive chairman vows confidence in long-term strategy Despite the disappointing quarterly figures, Hermès leadership maintained that the group's fundamental model remained intact and reiterated its medium-term guidance of sales growth at constant exchange rates. Executive Chairman Axel Dumas framed the results as a temporary disruption rather than a structural shift in the group's trajectory. Hermès last week inaugurated its 25th leather goods manufacturing plant, a signal that the company is pressing ahead with investment plans despite geopolitical uncertainty. The group noted that Asia Pacific excluding Japan, another region that disappointed, posted only a 2.2% rise in sales at constant exchange rates, less than half the 5.84% gain analysts had expected. The previous quarter had seen Hermès record a 9.8% increase in sales at constant exchange rates, making the first-quarter slowdown to 5.6% a notable deceleration. Hermès handbags, including the Birkin and Kelly models, start at approximately 13,000 dollars, positioning the brand at the very top of the ultra-wealthy consumer segment.

„In a tense geopolitical context, Hermès maintains its course, remaining faithful to its long-term strategy. Supported by high creativity, uncompromising quality standards, and the loyalty of its clientele, Hermès continues its path of profitable growth in 2026 with confidence and determination” — Axel Dumas via Il Sole 24 ORE

Hermès quarterly sales growth at constant exchange rates: Q4 2025 growth (constant FX) (before: Previous quarter, after: +9.8%); Q1 2026 growth (constant FX) (before: Analyst consensus, after: +5.6% (vs. 7.44% expected))