Hermès’ Q1 2025: Growth, Tariffs, and a Price Increase

hermès First Quarter 2025 Revenue

Let’s hope your SA gets in touch before May 1 — because that Birkin offer is about to get more expensive, at least in the U.S. As Hermès announced with its Q1 2025 results, the French house will raise prices stateside next month to offset the latest round of U.S.-imposed tariffs.

Despite the challenges of a cooling luxury market, Hermès has continued to show solid growth. Revenues for Q1 2025 rose 7% at constant exchange rates (9% at current), reaching €4.1 billion — a solid performance in the face of global uncertainties and a challenging comparison period from last year. This growth stands in contrast to some of Hermès’ competitors, like LVMH, which reported a slip in sales this week, further underscoring Hermès’ resilience in uncertain times.

Axel Dumas, Executive Chairman of Hermès, stated:

“In a complex geopolitical and economic context, the house is strengthening its fundamentals more than ever: uncompromising quality, creativity at the heart of all development, and vertical integration, a guarantee of preserving unique savoir-faire. Despite a high comparison basis in the first quarter, the group achieved solid growth in sales, thanks to the trust of its customers and the commitment of the teams, whom I thank warmly.”

Image courtesy: @shamswomoon

All geographical areas recorded growth, which Hermès claims evinces its resilience even as broader market conditions show signs of slowing. In Europe, France saw a 14.2% increase, and Europe excluding France rose by 12.7%, bringing total European growth to 13.3%.

The Americas posted solid 11% growth, following an exceptional performance in Q4 2024. However, the beginning of the year saw a slower start due to weather-related disruptions. Wildfires in Los Angeles led to temporary store closures in Beverly Hills and Topanga, while low stock levels in the U.S. further impacted the early months. Despite this, March saw a significant rebound as stock was replenished, and momentum continued across both coasts. Strong performances were recorded in all divisions, reinforcing the region’s growth. Looking ahead, Hermès plans to expand its presence with two new store openings in Phoenix and Nashville in the second half of the year. And, of course, there’s the question of tariffs – more on that later.

In Asia, Japan delivered strong growth of 17%, while Asia-Pacific excluding Japan rose by just 1%. Despite a particularly high comparison basis and the downturn in traffic in Greater China, sales in Asia were supported by local client loyalty. Notable store reopenings in Taiwan and Thailand helped sustain momentum. Taiwan’s store, which reopened in March following an expansion, and Thailand’s Bangkok Central Embassy mall store, which reopened in January after renovations, contributed positively to sales in the region.

Despite some challenges in Greater China, Hermès noted that sales there were flat compared to Q1 2024, which was a high comparative period due to last year’s strong Chinese New Year performance. Hermès acknowledged a slight drop in tourism but emphasized that the overall performance was solid given the circumstances. While growth in Asia-Pacific excluding Japan has slowed, the region remains an important focus for the brand.

Amid the current social media buzz, particularly on platforms like TikTok, about the origins of luxury bag production, Hermès assured that there have been no changes in consumer behavior in China. The rumors surrounding “dupes” and the authenticity of luxury items have gained attention online, but Hermès emphasized that no significant shifts in consumer perception or behavior in China have been noticed despite these discussions.

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As for Hermès’ métiers, nearly all categories showed solid growth, though not all escaped the broader slowdown. The Leather Goods and Saddlery division, which remains Hermès’ biggest revenue driver, rose 10% at constant exchange rates. Growth was powered by continued strong demand and new additions to the collection, including the Médor and Mousqueton bags. Hermès also continued investing in production capacity, with its 24th leather workshop set to open in L’Isle-d’Espagnac this year, and two more sites scheduled for 2026 and 2027.

Ready-to-Wear and Accessories gained 7%, supported by well-received Autumn-Winter 2025 runway shows in Paris for both womenswear and menswear. The Silk and Textiles division grew by 5%, thanks to creative innovation across formats and materials that energized both women’s and men’s offerings.

The “Other Hermès Sectors” — driven by strong jewellery performance and the debut of the new Hermès en contrepoint porcelain collection — rose 6%.

On a less positive note, Hermès’ Watch and Beauty divisions both experienced declines. The Watch métier saw a significant 10% drop in revenues, amidst a still challenging market environment. Despite this, Hermès continued to enrich its offering, unveiling new versions of the Hermès H08 and the Arceau Le temps voyageur, as well as two new expressions of its iconic Le temps suspendu complication at the Geneva Watches & Wonders exhibition. Meanwhile, the Perfume and Beauty category posted a slight decline of 0.5%, reflecting the pressures these sectors are facing in a more competitive landscape.

Image courtesy: @shamswomoon

What Hermès Said on Tariffs

While Hermès’ results were solid, attention naturally turned to tariffs — a key concern across the luxury sector.

Eric du Halgouët, Executive Vice President of Finance, addressed the U.S. tariff situation in depth during the Q&A session following the Q1 financial presentation, offering cautious but clear insight into how Hermès is responding. Notably, since April 9, the U.S. has imposed an additional 10% tariff on EU imports, including the Hermès products sold in the United States.

To offset the impact of this additional tariff, du Halgouët said Hermès will be raising prices in the U.S. across all divisions starting May 1, 2025. This should be no surprise, since, when announcing the 2024 financial results in February, Hermès CEO Axel Dumas indicated that any additional U.S. tariffs would be passed on to U.S. purchasers.

As for the exact level of the price increase, du Halgouët did not disclose the actual amount, saying the numbers are being finalized. Importantly, and before U.S. customers panic, a 10% tariff does not necessarily mean a 10% price increase. Tariffs are assessed based on FOB, or freight on board, not retail price. As previously explained by tariff expert and attorney Charles L. Crowley, FOB typically approximates half of retail pricing, though it is a complicated and negotiated computation.

Read: Handbag Math: What the Tariffs Really Mean

These price increases will affect only the U.S. market. Hermès confirmed that its pricing structure remains unchanged in other regions, as the price increases are targeted solely at the U.S. market due to the additional tariff.

As for how Hermès handles tariffs more generally, the company maintains that all countries pay a wholesale price calculated based on costs in France. This policy remains consistent, with no changes in pricing strategy outside of the United States.

Image courtesy: @thebirkinboy

Looking Ahead: The 2025 Outlook

Beyond the tariff news and challenges, Hermès remains cautiously optimistic, targeting single-digit growth for 2025 while staying aligned with its ambitious goals and mindful of geopolitical uncertainties. The company plans to expand its workforce by an additional 1,000 to 1,500 employees, focusing on production to meet the increasing demand driven by its expanding leather goods workshops. Hermès also notes that while some of its competitors are facing difficulties, its continued investment in capacity, talent, and craftsmanship positions it well to navigate the evolving luxury landscape.