London - Despite rising sales and operating profit units, Pandora has made a difficult start in the year due to stimulus from currency volatility and the threat of higher U.S. tariffs.
The Copenhagen-based jeweler released its first-quarter results earlier than expected late Tuesday due to smaller guidance on its 2025 EBIT margin.
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Now, the company expects earnings before interest and taxes to be "about 24%" instead of "about 24.5%", reflecting the latest forex headwind. The downgrade does not include the impact of U.S. tariffs could take effect after a 90-day pause by U.S. President Donald Trump.
In the first three months, sales rose 7% to 7.35 billion Denmark Krona, or $1.12 billion. The potential growth rate is 6%, while new store openings increased sales by 4%.
The company said the U.S. grew at 11%, while in Europe, sales rose by 4%, driven by double-digit growth in several countries, including Spain and Portugal.
The United States is Pandora's largest market so far, with revenue of 2.37 billion Crona, or $361 million, accounting for about one-third of total revenue.
Operating profits for the period rose 9% to Crona 1.64 billion, or $250 million, while EBIT margin was 22.3% compared to 22% for the corresponding period last year.
Pandora President and CEO Alexander Lacik said the company was happy with the beginning of the year, "especially given the very high volatility in the world around us. We don't control external factors, but we do control how we achieve our strategy for growing businesses that have proven."
“As we remain agile about our surroundings, our strategic plans and long-term vision remain unchanged, can make Pandora the go-to destination for high-quality, branded jewelry,” he added.
Despite rising macro uncertainty, Pandora maintained full-year guidance of organic growth of 7% to 8%. Current transactions in the second quarter show basic growth in the intermediate numbers.
The company said "a variety of situations are being actively prepared for" related to U.S. tariffs, adding that it will provide updates "as the potential impact on the 2025 guidance and the potential impact of the 2026 targets becomes clearer."
Pandora revealed that it has been working to mitigate tariff measures for some time and “accelerate” some of the cost measures already planned.
It plans to switch some supply sources and ship jewelry directly to Canada and Latin America, rather than through Pandora's American distribution center. It will be able to ship directly to these areas by early 2026.
Pandora said a series of tariff options are currently being planned and further price increases will be considered. It said the extent and timing of these price increases can only be determined "on a specific basis".
Pandora produces its jewelry in Thailand, meaning that tariffs on U.S. imports could rise from 10% to 37% when the grace period ends.
The company said macro volatility has not affected its overall ambitions and it will continue to leverage its "Phoenix Strategy" with access to the jewelry space. Pandora will continue to invest with a focus on “drive growth through brand heat, supported by an exciting pipeline of products.”
In its statement, the company nodded to some highlights in the first quarter. In February, Pandora launched a follow-up to its Be Love marketing campaign, “to transform Pandora’s perception into a complete jewelry brand.”
The company added that its new online platform launched an encouraging start, “with solid business metrics and overall positive impact on brand key performance metrics.” Pandora also said that the action to offset the rise in commodity prices was “going smoothly.”
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