Updated 1:47 p.m. EST on Nov. 5
PARIS — Prices of gold and silver might continue soaring but Pandora has no plans to give up on these precious metals — or on being an affordable jewelry proposition for consumers.
Along with foreign exchange effects and the impact of U.S. tariffs coming in full force, rising commodities were among the headwinds the Danish jewelry giant faced in the third-quarter results it reported Wednesday.
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In the three months ending Sept. 30, the company saw sales growing 6 percent to 6.27 billon Danish kroner, or $964.5 million at current exchange, for the three months ending Sept. 30.
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Like-for-like sales were up 2 percent and an additional 4 percent came from network expansion.
Operating profit reached 1.29 billion Danish kronor, or $181 million, with strong EBIT margins of around 24 percent due to pricing and cost efficiencies, the company said in its interim results.
During the quarter, operating profit stood at 880 billion Danish kroner, or $135.5 million, with an EBIT of 14 percent “as expected,” the company said.
“We believe we can offset the majority of this headwind on silver and gold coming into 2027 and in the [following] years, while still remaining precious metal, while still remaining an affordable proposition,” the jeweler’s president and chief executive officer Alexander Lacik told WWD.
That’s a plan that will go through “a lot of innovation in terms of material strategy, how we build our product,” he said, declining to go into further details for competitive reasons.
Citi analyst Thomas Chauvet said in a research note that “with 75 percent of the [2026 exercise’s] silver needs hedged at $31, the commodity-related margin risk is limited, but [the 2027 exercise] is a leap into the unknown.”
He highlighted that the jeweler’s commercial and pricing strategy would be “potentially very challenging” if silver rose above $45 per ounce, or around twice the $23-per-ounce level it was at in October 2023 when medium-term financial targets were set by Pandora’s management. This silver price level would “likely to accelerate the launch of a more affordable stainless-steel offering toward the end of 2026.”
Meanwhile, the company remains focused on its Phoenix strategy introduced in 2021, which underpins its transformation as a “full jewelry brand,” extending beyond its core charm business and reinforcing its sustainability strategy.
Part of the jeweler’s efforts to become a go-to across generations and geographies include the late-September introduction of the entry price point Minis products, which are part of its core Charms business, and a new Talisman collection that highlight lab-grown diamonds. Lacik also pointed out last year’s introduction of the Essence collection.
But that shouldn’t be read as solely a way to protect the brand’s affordability aspect, for the CEO.
“We don’t drive this business with managing [the cost of goods sold] as the primary goal,” he said. “We’ve been talking about expanding the addressable market for Pandora and the strategy applying there is to essentially explain to people that we are a one-stop shop — we’re a full jewelry brand, not just a bracelet brand or charms brand.”
Despite macroeconomic headwinds, Pandora executives remained confident it would reach the year’s growth target.
During the third-quarter analyst call, chief financial officer Anders Boyer said the effects of commodity prices, foreign exchange effects and U.S. tariffs “obviously distorts the picture when you look at the reported numbers, but if you look at the underlying performance, you actually see that it remains very strong on the gross margin.”
In the third quarter of 2025, the Danish jeweler highlighted growth in the U.S. market, which remained “robust” at 6 percent during the period and was “outperforming the broader market.”
Meanwhile, Europe showed a mixed picture and an overall 1 percent decline. Performance in the market was pulled down by high-single-digit declines in Germany, the U.K. and France, respectively down 9 percent, 8 percent and 7 percent. Italy, where a turnaround plan rolled out after a “performance diagnostic” earlier this year, was down 4 percent but “early signs are encouraging.”
The “Rest of Pandora,” which accounts for around 35 percent of the business and includes other European markets, recorded a 6 percent increase in revenue.
The jewelry brand said Japan was a test for its “elevated Asia focus” in years to come, with revenue “more than doubled” in the year-to-date thanks to marketing investments and network expansion.
By channel, it was online sales that led in the quarter, rising 9 percent, while physical sales in Pandora’s network increased 1 percent.
Lacik said the company continued its “growth journey and delivered sound performance in a quarter marked by the challenging macroeconomic environment.”
“We are intensifying our efforts to drive brand heat, and the initial response to our new product launches demonstrates how we can continue to unlock market potential with our combination of innovation, affordability and emotional storytelling,” he continued. “We are well-geared for the upcoming holiday period and set to reach our targets for the year.”
The Copenhagen-based jeweler’s like-for-like growth in October totaled 4 percent and Lacik described it as “an encouraging start to the quarter.”
Market response to the results were less enthusiastic, with Pandora’s shares down 5.4 percent to 768.4 Danish kroner, or $118.2, at trading close.
For Piral Dadhania, analyst at RBC, “focus will be on changes to guidance both of which are negative.”
Pandora maintained its 2025 guidance for 7 to 8 percent organic growth for the year, although adjusting its like-for-like growth around 3 to 4 percent, against 4 to 5 percent previously, and network expansion expected at 4 percent rather than 3 percent. EBIT margin guidance for the year also remained at “around 24 percent.”
The company updated its 2026 EBIT guidance from “at least 24 percent” to “around 23 percent,” to reflect additional commodities and foreign exchange headwinds since the second-quarter announcement in August.
Lacik deemed the changes “tweaks” and said the lower end of the guidance range “would require a worsening of the macroeconomic situation.”
The executive, who plans to step down in March and be succeeded by the firm’s current chief marketing officer Berta de Pablos-Barbier, said the company saw no need to change its strategy and that his successor would “bring her own touch and flair on the execution of the strategy — and maybe in the future, she will also change part of the strategy.”
“The overarching message [is] that’s not going to change,” he continued, a message of continuity he reiterated throughout the later analyst call. “I’m incredibly proud of what we’ve built and the company today stands on a very strong foundation and a clear path to grow.”