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%). Ermenegildo Zegna Group’s sales in the Americas rose 8.2% driven by strong direct-to-consumer performance and despite tariff-induced price increases in September, while 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.
Ermenegildo Zegna Group’s chief of external relations, Paola Durante, told investors on the company’s Q3 earnings call that it hasn’t seen a negative reaction to recent price increases. “Of course, everything that we do in terms of price increase has to always be an elaboration on the analysis done by the merchandising team, looking at the full-price collection and protecting the important price point of every collection.”
The S&P 500 has continued to climb, fuelling the “wealth effect” that underpins luxury consumption. Buoyant financial markets are a key driver of the wealth effect. “American consumers are most exposed to financial markets — with both stocks and crypto,” adds Luca Solca, Bernstein luxury analyst. “The markets being very strong produces a wealth effect and a strong support to consumer confidence.”
While some brands have leaned into price increases to drive growth, LVMH’s performance in the US has been more driven by foot traffic and volume of sales, CFO Cecile Cabanis said in the earnings call. “We’ve always said that we would only use very moderate price increases if we had to look at inflation and tariffs, but that it wouldn’t be a big driver of the price. The mix and the value [are] first and foremost the priority to ensure that whenever we increase price, we have increased the value — the quality or the functionality.”
Kering CFO Armelle Poulou also noted an improvement in foot traffic, but noted that growth is also helped by the fact that average unit retail (AUR) has improved. “[We’re seeing] good resilience of the high-end customer, but also maybe some good performance on e-commerce, which is generally a channel where we see more aspirational customers.”
Looking ahead
The US remains a strategic priority for many luxury companies. On the company’s Q3 earnings call, Hermès EVP of finance Eric du Halgouët said: “The US is a country where we’ll be focusing our development. In October, we opened a store in Nashville, Tennessee, and we’re going to continue to focus on the development of our network in the US.”
Executives and analysts noted that the comparison base will be easier for the US market moving forward. “My thesis was that US consumer luxury spending was weak from 2023 through 2025 on the basis of an extremely challenging comparison basis — the post-pandemic boom, fueled by payment checks and extra savings from lack of travel — despite a rather solid economy and strong equity markets, which is typically a leading indicator,” says Jelena Sokolova, analyst at Morningstar.
Currency dynamics will also continue to play a role. “The strength of the euro has seen more US consumers spend in the US rather than when traveling to Europe, which has also boosted domestic spending,” says Cochrane. Price increases have also supported sales growth, he notes.
Analysts predict that domestic brands and companies will also see the benefits of those currency dynamics. Companies with strong US distribution networks are better positioned, as consumers are increasingly facing hidden costs, including customs duties and entry fees at checkout when ordering directly from overseas. Local distribution reduces friction and makes it easier for customers to buy domestically rather than risk international shipping fees.
Looking ahead, analysts expect the US consumer to remain relatively resilient. “I’d expect, bar significant and unexpected volatility in the markets, for US demand to continue at a mid-single digit growth pace in line with pre-pandemic long-term trends,” says Sokolova.
