Hermès shares tumbled 8 percent, wiping €15 billion off its market value after first-quarter revenue growth missed analyst expectations by about 2 percentage points. The iconic French luxury house, famed for its Kelly and Birkin handbags, now trades at roughly 35 times forward earnings, down from over 50 times just a year ago.

This earnings miss signals deeper challenges for the brand as it expands beyond ultra-high-end clientele. More than half of Hermès' revenue now comes from lower-priced items like belts, watches, and perfume rather than its signature £10,000 leather bags. While the company's ready-to-wear segment showed virtually no growth, analysts had expected 6 percent expansion. Even the leather goods division, long known for waiting lists and supply constraints, posted constant-currency growth of just over 9 percent.

The luxury sector faces broader headwinds this year, with overall volumes stagnant and Middle East conflicts dampening sales across the industry. Smaller rival Brunello Cucinelli grew 14 percent in the first quarter, but its revenue remains less than a tenth of Hermès'. For Hermès, maintaining its classic positioning may mean accepting that 35 times earnings represents the new normal in an increasingly challenging luxury landscape.