Hermes to Increase US Prices to Offset Trump Tariffs

Hermes' Response to US Tariffs

• 💡 Hermes plans to implement a price premium on all products sold in the US to fully absorb the impact of potential tariffs.
• 🎯 This strategy leverages the brand's status as an exclusive luxury brand to shift the financial burden to its affluent customer base.

First Quarter Sales Performance

• 📊 Hermes reported a 7% rise in first-quarter sales on a constant currency basis, reaching $4.66 billion.
• 📉 This growth fell slightly short of analyst expectations, which predicted 9.8% year-on-year growth.
• 🌍 Despite missing targets, the company observed positive growth across all regions.

US Market and Shopper Behavior

• 💬 Hermes' finance chief noted no significant changes in US shopper behavior and continued double-digit growth in the region.
• ⚠️ However, the company is preparing for potential US tariffs, which could impose a 20% charge on European fashion and leather goods.
• ⚖️ This follows a recent pause on most tariffs by Trump, setting a general 10% duty rate.

Outlook on China

• 🇨🇳 Regarding the Chinese market, Hermes indicated no major signs of improvement due to the ongoing real estate crisis.
• 🌱 Recent government initiatives aimed at boosting spending were acknowledged as a positive signal for the market.