Hermès Continues to Ascend, Reporting a 9% Increase in Sales

Hermès experienced a 9% gain in sales in Q2, sustaining robust performance during the luxury downturn by implementing price increases to counteract US tariffs.

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The luxury fashion brand Hermès has announced a 9% year-over-year gain in sales for Q2, reflecting its robust performance despite the prevailing downturn in the premium market. The Birkin bag manufacturer asserts that its recent price escalation plan has been positively embraced by its customer base, allowing the company to transfer contentious US tariffs to its wealthy clients.

As reported by Business of Fashion, Q2 sales amounted to €3.9 billion ($4.50 billion USD), approximately in line with analyst projections for a 10 percent increase. The label released its study just after US President Donald Trump negotiated a trade agreement with the EU, decreasing a proposed 30% tariff on European goods to 15%.

While other entities like as LVMH, the parent company of Louis Vuitton, and Kering, the parent company of Gucci, continue to face adverse effects from reduced demand for luxury products, Hermès has highlighted its robust performance in 2024. In response to a report of diminished sales in Q1 2025, Hermès declared intentions to increase prices on all products sold in the United States to mitigate the losses incurred by additional tariffs.

“We will completely counterbalance the effects of these new tariffs by raising our selling prices in the United States starting May 1, across all our business sectors,” stated Finance Chief Eric du Halgouet to BoF in April.

The corporation executed a worldwide price augmentation of 7%, accompanied by an extra 5% increase in the United States, where luxury demand has exhibited greater stability compared to other countries, including China. With many bags commencing at $10,000, the escalation is not a trivial expense; yet, the brand's exceptionally limited distribution strategy has maintained its allure, epitomizing the pinnacle of European luxury.

In April, Hermès announced a strategy to enhance its production capabilities, which includes the establishment of a Loupes plant next year, a Charleville-Mézières facility in 2027, and a Colombelles workshop for its Kelly and Constance bags in 2028. Customers can anticipate a production rise as early as this year with the label's ambitions to inaugurate its Isle d’Espagnac factory in central France.

Hermès shares have risen by 2% since the beginning of the year, surpassing competitors such as Richemont, the owner of Cartier. The swiftly changing environment ultimately resulted in Hermès surpassing LVMH as the world's most valuable luxury stock, achieving a market capitalization of $276.3 billion USD in April.