The US is proving an unlikely bright spot for luxury at a time when China’s recovery is uneven and Europe is squeezed by cautious spending. In the latest round of earnings, nearly every major luxury group has flagged the US as a growth engine, despite the headwinds of rising tariffs and higher prices.
The US gained strength in Q3 compared to last quarter. Performance in the US at LVMH was stronger than expected in Q3, up 3% compared to the same period in 2024. North America was the standout at Kering too, with sales up 3% and strong performance across all brands, an improvement on last quarter when sales were down 10%. Hermès’s growth in the Americas remained strong, as with last quarter (up 12.3% in Q2 and 14.1% in Q3). At Ferragamo, Q3 sales were up 15.6% in North America, driven by direct-to-consumer performance, a significant improvement on last quarter (-3.3%). Zegna’s sales in the Americas rose 8.2% despite tariff-induced price increases in September, and Prada Group led the charge with 15% sales growth in the Americas in the first nine months of 2025.
This week, US-based Capri, Tapestry and Ralph Lauren will report their earnings, and Burberry and Richemont will report next week. Capri has had ongoing challenges since the Tapestry merger fell through, and Ralph Lauren and Tapestry have seen stronger performance in Europe recently. Meanwhile, the US was the best-performing region at Burberry and Richemont last quarter.
In June, Bain reported that consumer confidence in the US had declined following the announcement of President Trump’s tariffs, and that, as a result, luxury’s 2025 outlook was uncertain. Despite the caution, the latest results suggest that the US is not only weathering the turbulence but emerging as a counterweight to softness elsewhere.
Tariffs and consumer confidence
Tariffs imposed earlier this year raised concerns that higher prices would dampen demand. Mass-market retailers have largely held off on price increases, while luxury brands have leaned into their pricing power, lifting prices by between 5 and 10%. While some analysts warn of the impact from a pull forward of demand ahead of further price increases (especially in Swiss watches) overall, the effect of tariffs on luxury has been milder than feared, thanks to a mix of macroeconomic and behavioral factors.
“US luxury demand has been a relative strong point post-election, with the higher income consumer not feeling many of the pressures impacting the wider consumer,” says Adam Cochrane, analyst at Deutsche Bank. At the same time, some of the Trump administration’s tax cuts for wealthy Americans have left affluent consumers more insulated from inflationary pressures than the wider population. “The stock market rally has created a positive wealth effect that often feeds into strong luxury spending,” says Cochrane.
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