Chanel’s profits plunge 28% as global turbulence threatens the luxury giant’s pricing power

French luxury group Chanel said Tuesday that it suffered a 28.2-percent drop in net profit to $3.4 billion last year because of “challenging” conditions in some markets.

“We saw challenging macroeconomic conditions which had an impact on sales in some markets,” the CEO of the fashion house, Leena Nair, said in a statement. Global revenue dipped 5.3 percent to $18.7 billion.

It said the headwinds raise questions over whether it will raise prices, as it typically does twice a year, in March and in September.

Several rivals, such as Hermes, have already hiked their prices to compensate for the 10-percent tariffs into the US market ordered by President Donald Trump.

Chanel’s chief financial officer Philippe Blondiaux told Vogue Business that the situation with the US tariffs was “extremely volatile” and “we are waiting to see what will be the outcome of all the ongoing discussions” before deciding.

Chanel 2024 sales in North and South America dipped 4.3 percent, while those in the Asia-Pacific region plummeted 9.3 percent. Revenues from European sales rose 1.2 percent.

Chanel said it made “record” investments in 2024, notably acquiring prestige properties in Paris and New York and expanding its global network of stores, including in China and Japan. It planned to pursue that path, by expanding further in China as well as in India and Mexico.

Nair told Vogue Business that China was “one of the most dynamic and important markets for the luxury ecosystem” and Chanel had opened 15 new stores there last year, and planned to open another 15.

This story was originally featured on Fortune.com