Hermes shares fall 11% on disappointing China sales

• Kering shares surged nearly 17%.
• Gucci reported better-than-expected quarterly sales.
• Hermes shares dropped 11%.
• Hermes reported second-quarter sales growth of 6.7%.
• Hermes' second-quarter sales reached €4.1 billion.
• Hermes noted stabilization but no fundamental rebound in China.
• China is Hermes' largest market.

Kering experienced a significant surge in its share price, climbing nearly 17%, driven by stronger-than-anticipated quarterly sales from its prominent brand, Gucci. This performance has bolstered confidence in CEO Luca de Meo's ongoing turnaround plan for the luxury group. In a contrasting market reaction, Hermes saw its shares fall by 11%. This decline followed the release of its second-quarter financial results, which showed a sales growth of 6.7%, reaching €4.1 billion. While this growth met expectations, it was characterized by a lack of a substantial rebound in China, the company's most crucial market. Hermes CEO Axel Dumas acknowledged a stabilization in the Chinese market but stated that a fundamental recovery has not yet materialized. The market's reaction suggests that the slight sales acceleration reported by Hermes was insufficient to satisfy investor expectations, particularly concerning its performance in China.