Investing.com -- Hermes (EPA:HRMS) said Thursday it plans to raise prices in the U.S. to fully offset the impact of new tariffs introduced by U.S. President Donald Trump, the French luxury house said on Thursday, as it reported first-quarter sales that came in below market expectations.
The price increases will take effect in May and apply across all product lines, according to the company, adding to the regular annual adjustments, which this year have averaged between 6% and 7%.
"We are going to fully offset the impact of these new duties by increasing our selling prices in the United States from May 1, across all our business lines," said Finance Chief Eric du Halgouet. He noted the company is still determining the exact level of the hikes.
Hermes reported revenue of €4.1 billion ($4.66 billion) for the first quarter, a 7% jump at constant exchange rates. The growth came in below analyst forecasts for a 9.8% rise, according to VisibleAlpha data cited by HSBC, and marked a notable slowdown from the 18% jump recorded in the previous quarter.
Despite the weaker figures, the company said demand in the U.S. remained strong, with double-digit growth seen in early April. However, low inventory levels were a limiting factor.
"Of course, we are cautious about the United States given the discussions, the geopolitical uncertainty which, as you know, have caused a great deal of volatility on the financial markets," du Halgouet told reporters on a call.
If fully implemented, the new tariffs could mean a 20% duty on European fashion and leather goods, and a 31% charge on Swiss-made watches.
Last week, Trump announced a 90-day pause on most tariffs, with a general rate of 10% applied in the interim.