Q1 Revenue Beats Expectations
French luxury house Hermès reported first-quarter 2025 revenue of €4.13 billion, marking an 8.5% year-on-year increase and beating the market consensus of 7.2%. Growth was largely driven by strong performance in Europe and the United States, with the latter showing double-digit gains. In contrast, Asia (excluding Japan) saw more moderate growth.
U.S. Price Adjustment in Response to Tariffs
To counter the impact of a new 10% U.S. tariff on European luxury imports, Hermès announced a price adjustment across all product lines in the American market effective May 1. The average increase will range between 6% and 7%. For example, the Birkin 25 in Togo leather will rise from $11,400 to $12,100, while the Mini Kelly II in Epsom leather will increase from $9,400 to $10,000.
Preserving Brand Exclusivity
Despite global market uncertainties, Hermès remains committed to its strategy of limited production growth—capped at 6% to 7% annually—to preserve brand scarcity and maintain its premium positioning. This approach supports pricing power but inherently limits volume growth.
Outlook and Industry Headwinds
Hermès expressed cautious optimism for 2025, reaffirming its medium-term revenue targets despite macroeconomic and geopolitical volatility. Other luxury peers, including Moncler and Brunello Cucinelli, also posted steady growth, highlighting a broader industry trend of adapting to external challenges such as tariffs and inflationary pressures.
