LVMH, the French luxury powerhouse, indicated potential price hikes of 2-3% for premium products to counter tariffs imposed by the Trump administration. However, two key items—cognac and lower-priced beauty products—are exempt from these increases due to declining sales and inability to absorb higher costs. The company reported a 17% decline in cognac sales in the last quarter, attributed to soft demand in the U.S. and China, alongside tariff uncertainties. In a strategic move, LVMH is contemplating shifting more production to the U.S. to reduce tariff exposure.
Cécile Cabanis stated: "the capacity to raise prices is not there" for cognac and lower-priced beauty products.
Stéphane Bianchi highlighted that buyers of LVMH's premium products, like high jewelry, are more likely to absorb any price increases.
LVMH's cognac sales have declined by 17% compared to the previous year due to soft demand and uncertainties around tariff policies.
In the first half of 2024, LVMH experienced a 15% decrease in Champagne bottle sales compared to the prior year.
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