{"id":4048,"date":"2025-04-17T23:05:33","date_gmt":"2025-04-17T23:05:33","guid":{"rendered":"https:\/\/nationalgunowner.org\/index.php\/2025\/04\/17\/lvmh-and-hermes-cfos-say-luxury-titans-start-to-feel-tariff-pains\/"},"modified":"2025-04-17T23:05:38","modified_gmt":"2025-04-17T23:05:38","slug":"lvmh-and-hermes-cfos-say-luxury-titans-start-to-feel-tariff-pains","status":"publish","type":"post","link":"https:\/\/nationalgunowner.org\/index.php\/2025\/04\/17\/lvmh-and-hermes-cfos-say-luxury-titans-start-to-feel-tariff-pains\/","title":{"rendered":"LVMH and Hermes CFOs Say Luxury Titans Start to Feel Tariff Pains"},"content":{"rendered":"
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Hermes this month briefly overtook its rival LVMH in market cap. Liao Pan\/China News Service\/VCG via Getty Images<\/span><\/figcaption><\/figure>\n

With high profits and a reliable base of wealthy clients, LVMH (LVMHF)<\/a> and Hermes\u2014the world\u2019s two largest luxury houses\u2014are typically more insulated from economic turbulence than other retailers. Still, even top-tier fashion houses aren\u2019t entirely immune to the effects of tariffs imposed by the Trump administration, which are already triggering production shifts and higher prices for U.S. consumers.<\/p>\n

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For now, both companies say their American sales remain largely unaffected by the new tariffs. However, LVMH this week reported weaker-than-expected revenue for the first quarter, citing a challenging global economic landscape. The group\u2019s sales between January and March totaled 20.3 billion euros ($23 billion), a 3 percent year-over-year decline, with organic sales down in all regions except Europe.<\/p>\n

While noting that tariffs haven\u2019t yet forced major changes, the luxury conglomerate\u2014which owns brands like Louis Vuitton<\/a>, Dior (CHDRY)<\/a> and Tiffany & Co.\u2014acknowledged that U.S. levies could disrupt its manufacturing model. The company currently operates three Louis Vuitton production sites in the U.S., which account for roughly one-third of the brand\u2019s American supply, said chief financial officer Cecile Cabanis<\/a> on an April 14 analyst call.<\/p>\n

In terms of boosting that supply in light of levies, \u201cthere is still capacity,\u201d said Cabanis, who added that LMVH will examine \u201chow much we want that to evolve.\u201d<\/p>\n

LVMH eyes a production shift to the U.S.<\/h3>\n

The Bernard Arnault<\/a>-led company also manufactures most Tiffany & Co. products domestically and may shift more of that output from Europe if needed, Cabanis noted. \u201cFor both [Louis Vuitton and Tiffany], we can increase the capacity or production for the U.S.,\u201d she said. \u201cStill, it\u2019s something that you don\u2019t do overnight.\u201d<\/p>\n

Amid a broader slowdown in luxury spending, LVMH has lost more than 35 percent of its market value over the past year. Following its Q1 revenue miss, the company\u2019s stock dropped more than 7 percent, allowing rival Hermes to briefly overtake it as the world\u2019s most valuable luxury firm. LVMH reclaimed the top spot today, with a market cap of $275 billion, compared to Hermes\u2019 $243 billion.<\/p>\n

Hermes also disappointed investors with its first-quarter 2025 results. Revenue rose 7 percent year-over-year to 4.1 billion euros ($4.6 billion), but still fell short of analyst forecasts. Despite the dip, the company said it has not yet felt the effects of Trump\u2019s tariffs.<\/p>\n

Hermes to raise prices in the U.S. on May 1<\/h3>\n

Those levies, however, are about to bring tangible changes for Hermes\u2019 American customers. In response to a 10 percent baseline tariff enacted by Trump on imports from all countries, Hermes will pass the added cost on to U.S. buyers, said chief financial officer Eric du Halgou\u00ebt during today\u2019s earnings call.<\/p>\n

\u201cThe price increase that we\u2019re going to implement will be just for the U.S. since it\u2019s aimed at offsetting the increase in tariffs that only applies to the American market,\u201d he told analysts.<\/p>\n

The hikes will apply across Hermes\u2019 product lines and are scheduled to take effect May 1. The company is \u201cstill calculating\u201d how the increases will unfold, said du Halgou\u00ebt. They\u2019re expected to push prices of already-costly items such as the Birkin and Kelly bags\u2014both starting start at $10,000\u2014even higher.<\/p>\n

For now, Hermes is adjusting for Trump\u2019s 10 percent blanket tariff. But further proposed levies could hit within three months, significantly raising costs. Currently on a 90-day hold, Trump has floated tariffs as high as 20 percent on goods from the European Union and 31 percent on imports from Switzerland\u2014both key sources of luxury exports.<\/p>\n

\t\t\t\t\"LVMH<\/p><\/div>\n