- Hermès reported a 7% increase in first-quarter sales, reaching €4.1 billion ($4.66 billion), but the result fell short of analyst expectations for 9.8% growth, according to HSBC and VisibleAlpha data.
- The performance marked a slowdown from the 18% surge in the previous quarter, signaling a rare softness in the luxury brand’s momentum.
- The company announced it would raise prices across all product categories in the United States starting May 1 to fully offset the impact of U.S. tariffs imposed by President Donald Trump.
- Finance Chief Eric du Halgouet confirmed that regular pricing adjustments of 6–7% will be supplemented by an additional premium tied directly to the tariffs.
- New U.S. tariff policies could impose duties of up to 20% on European luxury goods and 31% on Swiss watches, prompting immediate pricing strategy shifts.
- Despite the tariff uncertainty, Hermès reported double-digit growth in the U.S., though this was partly capped by low inventory levels.
- du Halgouet stated that no major changes in U.S. consumer behavior have been observed so far, but the company remains cautious due to geopolitical volatility and economic uncertainties.
- China, another key market for Hermès, remains under pressure from its ongoing real estate crisis, though recent government initiatives to stimulate spending are seen as encouraging.
- The softer Q1 performance came shortly after rival LVMH also missed sales expectations, reflecting broader concerns across the luxury sector amid global economic headwinds.
- Hermès remains confident in its brand power and pricing flexibility, particularly in the U.S., to maintain profitability and offset rising costs in an increasingly protectionist global trade environment.
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