Must read: FTSE 100 cautious, Hermes hurts Burberry
ii’s head of investment rounds up the morning’s big news.
15th April 2026 09:00
by Victoria Scholar from interactive investor
Global markets
European markets have opened flat following a stronger session overnight in Asia. Barratt Redrow (LSE:BTRW) is at the top of the FTSE 100 after holding its annual forecast. Burberry Group (LSE:BRBY) is at the bottom of the UK blue-chip index after disappointing results from Hermes International SA (EURONEXT:RMS) dragged other luxury stocks down with it.
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The US dollar is trading at around six-week lows and sentiment has turned cautious as the markets await further talks between the US and Iran. Brent crude is trading flat at around $94.80 while WTI is slightly lower.
US futures are trading flat after the S&P 500 closed Tuesday close to its all-time high from January. Investors await earnings from Morgan Stanley (NYSE:MS) and Bank of America Corp (NYSE:BAC).
Hermes
Hermes reported a 1% decline in reported first-quarter sales to 4.07 billion euros (£3.54 billion) versus 4.13 billion euros year-on-year. In currency adjusted terms, sales increased by 5.6%, falling short of analysts’ expectations, while sales in the Middle East slumped by 6% and sales in France fell by 2.8%. However, sales in the US and Asia were more positive, growing by 17.2% and 3.5% respectively.
This year was meant to be a recovery year for the luxury sector and, while sales got off to a good start in the first two months, the Iran war and currency fluctuations have proven to be painful headwinds for Hermes.
Geopolitical events since late February have prompted a major slowdown in global tourism spending and an increasingly cautious consumer as inflation resurfaces, creating a perfect storm for the sector. Luxury spending in cities like Dubai and Paris has suffered a significant slump in demand while airport high-end shopping is also struggling.
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However, the US market was a bright spot with strong demand amid the global uncertainty, highlighting how the super wealthy US consumer remains resilient amid the challenging macro backdrop. Plus, Hermes is arguably in a better position than rivals like Kering SA (EURONEXT:KER) given that the Hermes Birkin and Kelly bags are situated at the upper end of the luxury market, selling for over $10,000 each, regarded as a timeless classic piece. This means they are more consistent in terms of demand versus bags at rival brands like Gucci and Prada which tend to dip in and out of fashion more frequently. Hermes’ ultra wealthy client base and waiting lists mean it is also able to pass on extra cost pressures to its customers in terms of higher prices without hurting demand.
Before today’s update, Hermes shares were already down 16% year-to-date and slumped a further 14%, on track for their worst day since October 2010 dragging rival luxury brands down with it.
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