Pandora Posts Strong Q1, Plans for Tariffs

The company has multiple strategies for dealing with tariffs, though its CEO said moving manufacturing to the U.S. is not one of them.

Lenore Fedow lenore.fedow@nationaljeweler.com

This Pandora bracelet features charms that are part of a collection curated by Tyla, a Pandora brand ambassador and Grammy-winning singer. The company posted strong first-quarter results, with global sales up 7 percent on an organic basis.

Copenhagen, Denmark—Pandora started off its fiscal year on a high note, reporting revenue growth the company attributed to its Valentine’s Day performance and star-studded marketing campaigns.

On an earnings call Wednesday, the jewelry company also shared details about its expansion plans and the potential effects of tariffs on its business.

First-quarter revenue was up 8 percent year-over-year at actual exchange rates (7 percent on an organic basis) to 7.35 billion Danish kroner ($1.12 billion), with like-for-like sales growth of 6 percent.

“We are pleased with how we’ve started the year, especially given the very high volatility in the world around us. We do not control the external factors, but we do control how we execute on an already proven strategy that is growing our business,” Pandora CEO Alexander Lacik said in a statement.

The company credited its success to the continued execution of its “Phoenix” turnaround strategy, which aims to position Pandora as a full jewelry brand rather than just a charm bracelet company.

“As we remain agile to the environment around us, there’s no change in our strategic plans and long-term vision for making Pandora the go-to destination for high quality, branded jewelry,” Lacik said.

In February, Pandora released the next installment in its “Be Love” marketing campaign, starring actress Winona Ryder and supermodel Iman.

Pandora said it leveraged its “Be Love” messaging for Valentine’s Day, the main gifting holiday in Q1.

It performed well and “underpinned the brand’s emotional relevance and strength in occasion-based purchasing,” said the company.

The campaign results were “visible,” Pandora said, noting like-for-like sales were up 2 percent for its core segment, which includes its “Moments” and “Me” collections and its collaborations.

Its “fuel with more” segment, which includes lab-grown diamond jewelry as well as the “Timeless” and “Signature” collections, saw 12 percent like-for-like growth in the quarter.

Sales of its lab-grown diamond jewelry collection alone totaled 90 million Danish kroner ($13.7 million) in the quarter, with like-for-like growth of 43 percent.

In Q1, Pandora continued to lean into celebrity ambassadors, naming Tyla as its newest brand ambassador last month.

The Grammy-winning singer wore the brand’s lab-grown diamond jewelry to the Met Gala on Monday and during her Coachella performance.

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By channel, online sales drove Pandora’s first-quarter growth, with an 18 percent like-for-like increase in the quarter, while sales at its physical stores were up 3 percent.

Pandora closed 17 stores and opened seven shop-in-shops in Q1. Its store count stands at 2,271 with 684 of those stores, 30 percent, operated by Pandora.

Pandora will continue expanding its store network, aiming to open 50 to 75 net concept stores and 25 shop-in–shops this year. It also will close at least 50 stores in China.

As previously announced, Pandora said it expects to see 400 to 500 net openings for the 2024-2026 period.

Looking at its performance by region, Pandora posted 11 percent like-for-like growth in the United States, which the company attributed to continued traffic in stores and online, and a strong Valentine’s Day performance.

Its wholesale accounts in the U.S. performed well in the quarter, it said, with like-for-like growth in line with Pandora’s stores after two years of falling behind.

As for tariffs, Pandora said it has been working on mitigating measures and planning for a range of scenarios.

Possible measures include switching sources of supply for point-of-sale materials used in the U.S., and shipping jewelry directly to Canada and Latin America rather than, as it does today, through its U.S. distribution center.

“Pandora is actively preparing for various scenarios related to the U.S. tariffs and will provide an update as the potential impact on the 2025 guidance and 2026 targets becomes clearer,” the company said.

In an interview with CNBC, Lacik said it would be “unlikely” Pandora would raise prices if the tariffs remain at 10 percent, but if they rose to 30 percent, for example, that may change things.

Lacik also ruled out the idea of relocating its manufacturing to the U.S., noting the cost of labor in the U.S. would be “completely uncompetitive” and lead to higher prices.

There is also a lack of workers in the U.S. with the skills to produce its jewelry, he said.

“I employ up to 15,000 craftspeople in Thailand,” Lacik said. “I can’t find that amount of talent that actually has this craft experience in the U.S. So, it’s actually not so much a matter of cost to begin with, it’s about having skilled people who can actually craft the jewelry.”

Looking ahead, Pandora maintained its forecast of 7 to 8 percent organic growth for the full year. Its EBIT margin guidance was updated to 24 percent, down slightly from its prior forecast of 25 percent.

As for Q2, the company said it is seeing like-for-like growth at mid-single-digit levels.

Pandora’s Q2 results are set to be released Aug. 15.