Is Hermès no longer immune to the luxury downturn?

Hermès‘ net profit fell by 5% to 2.19 billion euros in the first half of the year. Could this be the first sign of weakness for the French luxury brand, which has so far remained well ahead of the competition?

Not afraid of American tariffs

CEO Axel Dumas spoke of “strong results in every region” and announced plans to continue investing, including in the hiring of new employees. The decline in profit was primarily due to a special corporate tax for companies. After adjusting for those one-time charges, profit actually came in 6% higher, at 2.5 billion euros for the first semester.

The revenue also increased by 7.1% to 8 billion euros. In the United States, there was even double-digit growth, despite a sharper market dynamic and the fact that Hermès implemented a price increase of five percent earlier this year. As a result, Dumas is not even afraid of the new import tariffs following the European-American trade deal. He believes that if the imposed 15% is the sum of the existing charges, there is no reason to raise prices further. In fact, the significantly weakened US dollar could have an equally large impact, if not a greater one, than the tariffs.

In Asia (excluding Japan), revenue increased by 1.5% to 3.57 billion euros, with sentiment in China remaining “unchanged positive,” according to Dumas. Japan recorded a strong increase of 17.6 percent to 815 million euros, while Europe (excluding France) surpassed the billion mark with a growth of 12%. In France, revenue reached 740 million euros, representing an increase of 8.7%.