Hermes, the high-end fashion house behind the famous Birkin bag, plans to hike prices in the US to counter President Trump’s tariffs, the luxury retailer said Thursday.
The Paris-based company — which manufactures the vast majority of its goods in France — will raise prices enough to offset any hit to growth from the current 10% tariff on the European Union, according to Eric du Halgouet, Hermes’ executive vice president of finance.
“We haven’t seen any impact, but we remain very conservative,” he said during an earnings call on Thursday.
Trump initially threatened the European Union with a 20% duty, but lowered it to 10% for 90 days to give leaders time to negotiate.
The price hike comes as the company reported sluggish US sales for the first three months of the year — before Trump’s tariffs kicked in on April 3.
Total first-quarter sales increased 7.2% when adjusted for currency movements, below the 18% growth seen in the previous quarter, the company said.
French President Emmanuel Macron last week said the 90-day pause “sends out a signal and leaves the door open for talks,” but warned it’s a “fragile” halt.
Meanwhile, Italian Prime Minister Giorgia Meloni — a favorite of Trump’s — is set to visit Washington on Thursday, making her the first European leader to meet with the president since he unveiled the EU tariffs.
The EU is hopeful Meloni might be able to negotiate rates lower across the 27-nation trade bloc.
Hermes appears better prepared for the tariff crunch than many others in the industry, since it has retained pricing power and consistently outperformed luxury rivals, according to analysts.
It reported revenue of $4.69 billion in the first quarter – up from $4.33 billion last year.
But revenue came in a tick below analysts’ forecasts of $4.7 billion.
The luxury clothing brand saw growth in all areas, even the Americas, which it said was “supported in particular by the solid momentum in the United States in March.”
Analysts cautioned a widespread US buying spree was due to shoppers who raced to scoop up items before the tariffs took effect, and is unlikely to repeat next month.
“Despite the economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates,” Hermes said in a press release.
Earlier this week, Hermes surpassed rival LVMH – which owns Louis Vuitton, Tiffany and Dior – as the world’s most valuable luxury group after the competitor reported weaker-than-expected sales.
LVMH, which is owned by the billionaire Arnault family, is considered an industry bellwether, so its disappointing earnings sent investors running for the exits.
Shares in the Louis Vuitton owner dropped 7% on Tuesday, dragging its market capitalization down to roughly $279 billion, compared to Hermes’ $280 billion.