“Pork is especially popular at banquets and in restaurants. I don’t think our customers are price-sensitive when it comes to this product, but I’m waiting for the moment when prices start to rise. That will be a sign that people are feeling optimistic again and are willing to spend more,” Dumas told analysts following the release of the first-half results.
China has long been one of the main drivers of growth in the global luxury market. However, consumer activity in the country remains weak due to the economic slowdown and the crisis in the real estate market. This is forcing major brands to revise their expectations regarding the pace of recovery, the WSJ reports.
Hermès reported sales growth in the second quarter and generally met market forecasts, but the situation in China remains the main source of uncertainty. Dumas himself acknowledges that demand in the region has not yet begun to recover.
Pork prices have become a warning sign: last month, they fell to their lowest level in about 16 years. Despite government measures to cut production, it may take a long time for the market to recover.
Weak Chinese demand has already weighed on Hermès’s stock. In April, the company’s shares fell 14%, hitting their lowest level since January 2023 after leather goods sales came in below investors’ expectations. The market has begun to fear that even one of the most resilient luxury brands is facing the consequences of China’s slowdown.
The region, which includes China, accounts for about 43% of Hermès’ revenue. By comparison, Asia (excluding Japan) accounts for about 29% of LVMH’s revenue.
Now, what matters to Hermès is not only sales figures but also broader signs of a return to confidence among Chinese consumers. Rising pork prices could be one of the first signals that shoppers are once again ready to increase their spending.
