Pandora’s shares dropped 10% on Friday after the Danish jewellery brand issued a warning of weaker sales growth for 2025.
This downturn was attributed to the fact that US consumers purchased fewer charm bracelets and necklaces than anticipated during the crucial holiday shopping period, according to a Reuters report.
Pandora, the well-known jewelry retailer specialising in silver charm bracelets starting at $70, is currently navigating significant business headwinds.
The company, which also produces lab-grown diamond jewelry in its proprietary Thai factories, is facing a triple threat to its financial performance.
Firstly, a crucial segment of its customer base—lower-income shoppers—is tightening discretionary spending, directly impacting sales volumes.
Secondly, Pandora must contend with the financial burden imposed by existing US tariffs on imported goods, which increases the cost of bringing products to the critical American market.
Most dramatically, the cost of its primary raw material has skyrocketed; silver prices witnessed a substantial 161% increase last year.
This rapid rise in silver costs directly pressures Pandora’s profit margins, forcing the company to balance affordability for its customers with the soaring expenses of production.
Less traffic in US markets
Berta de Pablos-Barbier, who became Pandora’s CEO on January 1, stated that the US market is primarily seeing a decrease in traffic compared to what the company has experienced in prior seasons.
de Pablos-Barbier was quoted as saying in the Reuters report:
Consumer sentiment in the US is at its lowest in many years.
The US represents the single largest market for Pandora, contributing approximately one-third of the company’s total revenue.
This significant reliance on the American consumer base means that market trends and consumer confidence in the US have an outsized impact on Pandora’s financial performance.
A particularly crucial element of this dynamic is the holiday season. Gifting during major holidays is a key driver of sales, leading to a substantial spike in revenue during the fourth quarter.
The success of Pandora’s performance during this gifting period is therefore vital to its annual results, making the US market a central focus for its marketing and inventory strategies.
Pandora’s shares plummeted 10% to their lowest point since June 2023 following a preliminary 2025 results announcement.
The company revised its full-year organic sales growth forecast down to 6%, a decrease from its earlier guidance of 7%-8%. Pandora is scheduled to release its full fourth-quarter earnings on February 5.
Revitalising collections
The company plans to concentrate on introducing more new product lines as a strategy to attract hesitant consumers back to stores, according to De Pablos-Barbier, Pandora’s former chief marketing officer.
De Pablos-Barbier said that they needed to be better at re-energising their collections and that they needed to bring more impactful newness into the market because this was going to drive excitement.
Pandora projects a full-year operating profit of approximately 7.8 billion Danish crowns ($1.2 billion).
The company also anticipates an operating margin of around 24%, which aligns with its prior guidance.
According to de Pablos-Barbier, the high price of silver served as a beneficial catalyst, prompting Pandora to develop new materials and designs.
Next month, Pandora is set to announce its strategic priorities for 2026.
This announcement will include updated plans for reducing the company’s reliance on commodities, a move intended to safeguard its margins.
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