Hermès reacts to US tariffs with price increases for American customers

PARIS, FRANCE: The luxury brand Hermès, headquartered in France, has announced plans to increase prices for its American customers as a response to the 10 percent tariffs imposed by US President Donald Trump on goods imported from the EU.

During a Thursday call with analysts, the company stated that these price hikes, effective May 1, aim to safeguard its profit margins and cover the additional import costs incurred due to the tariffs.

While Hermès indicated that its finances had not yet been adversely affected by US tariffs, The Wall Street Journal reported a slowdown in revenue growth during the first quarter of this year.

The company’s sales grew by 7.2 percent at constant currency rates for the first quarter of 2025, a decline from the 18 percent growth observed in the same period the previous year.

The upcoming price increases will be applied to all products sold in the US and will be in addition to the typical annual price adjustments, which have already resulted in a 6-7 percent increase globally this year.

As global trade tensions rise, various luxury brands may consider implementing cost-cutting measures to maintain their profit margins or pass increased costs onto consumers. Consequently, some companies may revise or withdraw their future revenue forecasts.

Europe’s luxury sector is particularly vulnerable, with impacts being felt by firms such as LVMH, Kering, Chanel, and Prada. This situation is exacerbated by the potential for Trump’s tariffs, which could increase from 10 percent to 20 percent.

Although the president has temporarily suspended the reciprocal tariff rate on the EU and other nations for 90 days, he has imposed a hefty 145 percent tariff on imports from China, leading to a retaliatory 125 percent tariff on US goods by Beijing. These rising trade tensions are likely to affect businesses that rely on components sourced from China or sell luxury products in the Chinese market.

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On Thursday morning, Hermès’ stock price dropped 2.5 percent, having declined 7.3 percent over the past month.

While the company experienced slower-than-expected sales growth in the first quarter of 2025, it reported total revenue of €4.13 billion. Growth of 7.2 percent year-on-year slightly fell short of the anticipated 8 percent.

European sales (excluding France) saw a 13 percent increase, while sales within France grew by 14 percent. Asian sales, excluding Japan, rose by just 1 percent, whereas Japanese sales surged by 17 percent, driven by strong customer loyalty. In the Americas, sales climbed by 11 percent during the same period.

The leather goods and saddlery division experienced a 10 percent increase in sales, buoyed by the introduction of the new Mousqueton and Médor bags. Hermès also announced plans to expand its production capabilities, with new workshops for leather goods set to open in Charente, Ardennes, and Gironde between 2025 and 2027.