Chanel has reported a sharp 28.2% decline in net profit for 2024, bringing earnings down to $3.4 billion as the French luxury giant grapples with tough economic conditions across key markets.

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

The downturn has cast uncertainty over Chanel’s pricing strategy, as the brand typically raises its prices twice a year, in March and September. Whether it will stick to this practice remains to be seen.

Other luxury houses such as Hermès have already pushed prices up, partly in response to the 10% tariffs on imports into the US introduced by President Donald Trump.  Commenting on the matter, Chanel CFO Philippe Blondiaux said the tariff situation was “extremely volatile” and added, “we are waiting to see what will be the outcome of all the ongoing discussions” before taking a decision.

Regionally, Chanel’s 2024 sales in North and South America fell by 4.3%, while the Asia-Pacific region saw a steeper decline of 9.3%. Europe, however, recorded a slight rise of 1.2% in sales.

Despite the decline, Chanel made “record” investments last year, acquiring prime properties in Paris and New York and expanding its store footprint in China and Japan. Plans are in place to continue growing in China, as well as in India and Mexico.