Hermès Shares Sink After Sales Miss Tied to Middle East Conflict

Hermès took a rare hit to its aura of invincibility. The stock fell as much as 14% in early Paris trading, a record intraday drop, after first-quarter revenue of €4.1 billion came in below expectations, even though sales still rose 5.6% at constant exchange rates. At current exchange rates, revenue fell 1% because currency swings shaved €290 million off the top line.

The pressure point was the Middle East, where sales fell 6% to €160 million from €185 million a year earlier. Hermès said the region, especially the United Arab Emirates, Kuwait, Qatar and Bahrain, was hit by geopolitical developments from March onward, and Eric du Halgouet said sales in Dubai and other Gulf shopping hubs dropped 40% that month. For a house built on scarcity, margin and relentless desirability, that kind of reversal is a warning flag: when travel stalls, the luxury floor can wobble fast.

The weakness did not stop at the Gulf. Sales in France fell 3% as tourist flows slowed, particularly in March, while wholesale activity was significantly affected by lower sales to concession stores, especially in the Middle East and airports. The knock-on effect reached some of the most fashion-sensitive shopping capitals in the world, including Paris, London, Britain, Italy and Switzerland, where Gulf shoppers are an important customer base. Even Hermès, long treated as the sector’s safest name, is still tethered to footfall.

There were bright spots. Sales in Asia excluding Japan rose 2%, with Greater China continuing slight growth and Korea maintaining solid momentum. U.S. sales surged 17.2% in currency-adjusted terms, and Hermès said double-digit growth continued in the Americas, Japan and Europe excluding France. But Reuters reported that Asia overall grew only 3.5% in currency-adjusted terms, with air-travel disruption weighing on Singapore and Thailand, a reminder that luxury spending still follows planes, visas and hotel bookings as much as taste.

The broader message is bigger than one quarter. Hermès said the Middle East accounted for 4.4% of sales last year and had been its fastest-growing region in 2025, which makes the swing especially sharp. Axel Dumas said the company was maintaining its long-term strategy and continuing profitable growth despite the tense geopolitical environment. Yet the same conflict has already dented sales at LVMH and Kering, suggesting this is not a Hermès-specific stumble so much as the first clear stress test for a luxury market that still leans heavily on travel, tourism and the world's most mobile clients.