Hermès Raising U.S. Prices May 1 Due to Trump Tariffs
French luxury powerhouse Hermès announced it will increase prices in the U.S. starting May 1, as it moves to offset the financial impact of President Donald Trump's newly imposed tariffs. The decision comes as the luxury brand seeks to absorb the 10% universal import duty levied by the White House earlier this month, targeting only its American operations.
The move, confirmed by Hermès Executive Vice President for Finance Eric du Halgouët, will not affect pricing in other global markets. “The price increase that we’re going to implement will be just for the U.S.,” he said during a quarterly earnings call. “It’s aimed at offsetting the tariffs that only apply to the American market.”
Hermès, known for its coveted Birkin and Kelly handbags, as well as its high-end scarves, watches, perfumes, and cosmetics, is facing the trade headwinds with a relatively stable financial footing. The company recently overtook LVMH in market capitalization — becoming the world's most valuable luxury brand — though its annual revenue remains a fraction of LVMH’s sprawling portfolio.
Tariffs Targeting U.S. Shoppers
The 10% tariff is expected to affect a wide range of imported goods, from electronics to clothing. Luxury retailers like Hermès, however, are in a unique position: their loyal, high-net-worth clientele allows them to pass on increased costs without a significant hit to demand — at least in the short term.
Yet, broader economic uncertainty and fears of a consumer spending slowdown could still challenge even the most resilient luxury players. Analysts warn that if recessionary pressures deepen, even top-tier brands may see softness in demand.
Sales Momentum Slows But Remains Strong
Despite the challenging backdrop, Hermès reported 11% sales growth in the Americas in Q1, representing nearly 17% of its global revenue. However, overall sales growth slowed to 7% on a constant currency basis — below analyst expectations of 8-9% and down from 17.6% in Q4 2024.
Deutsche Bank called the results “robust,” citing specific weakness in watch and perfume segments. Citi analysts labeled the numbers “a respectable outcome,” underscoring the brand’s continued strength relative to peers.
Meanwhile, LVMH reported an unexpected decline in Q1 sales, particularly within its flagship fashion and leather goods category, further widening the performance gap between the two French rivals. A decade after LVMH’s failed takeover attempt of Hermès, the two continue to battle for supremacy at the top of the luxury sector.
Exclusivity Over Expansion
Hermès’ strategy of controlled growth, brand scarcity, and ultra-premium positioning continues to serve it well, especially in uncertain times. With the company signaling confidence in its ability to pass on costs without denting demand, the upcoming price hike may serve as a litmus test for just how elastic luxury consumer behavior is in an era of global trade disruption.
While most retailers brace for margin pressure from tariffs, Hermès is betting that its brand cachet will carry it through. Whether that bet pays off may hinge not just on economic data, but on how U.S. shoppers respond to their next trip to the Hermès boutique.
