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Danish jewellery maker Pandora cut its annual profit margin guidance on Tuesday due to a decline in the US dollar and said it is preparing for scenarios related to US tariffs that could add tens of millions of dollars to its costs.
Pandora, whose biggest market is the US, said it now expected a margin on earnings before interest and tax (EBIT) of around 24 percent this year, having previously targeted around 24.5 percent. It stuck to its guidance of 7-8 percent organic growth for the year.
The charm bracelet maker is among the European companies most at risk from the possibility US President Donald Trump reinstates steep so-called “reciprocal” tariffs, including a 37 percent tariff on Thailand where its two factories are located.
These tariffs were implemented, then paused for 90 days to allow for negotiations. A 10 percent blanket tariff on imports from all countries remains in place.
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Pandora said that, if the current level of tariffs remains in place, there would be a cost impact of 250 million Danish crowns ($38 million) this year and 300 million Danish crowns annually thereafter.
If the 37 percent tariff on Thailand resumes, Pandora expects an impact of 500 million Danish crowns this year, and 900 million Danish crowns annually thereafter.
That is lower than Pandora’s April forecast of 1.2 billion Danish crowns annually, as the company said it expects to be able to ship products directly from Thailand to Canada and Latin America by early 2026. It currently uses a warehouse in Baltimore to serve North and South America.
“In both scenarios, Pandora will consider further price increases,” the company said, the latest in a string of brands and retailers to warn of higher US prices for their goods.
Pandora has already hiked prices across the board by 4 percent in April, following a 5 percent increase in October last year, in response to the rising cost of silver, a key material for its jewellery.
The company’s first-quarter revenue matched analysts’ expectations, and it said it would continue to invest in marketing while acknowledging an “uncertain” economic backdrop.
Revenue for the first quarter was 7.347 billion Danish crowns ($1.12 billion), slightly above analysts’ median forecast of 7.310 billion, while Pandora delivered organic growth of 7 percent.
“We are pleased with how we’ve started the year, especially given the very high volatility in the world around us,” its CEO Alexander Lacik said in a statement.
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A weaker dollar hurts Pandora’s revenues as sales in dollars are worth less when converted into Danish crowns.
By Helen Reid and Isabelle Yr Carlsson; Edited by Jan Harvey and Tomasz Janowski
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Pandora Raises Full-Year Growth Outlook as Broader Product Range Pays Off
The company said its operating profit rose to 1.34 billion Danish crowns ($196.25 million) in the second quarter from 1.19 billion a year earlier.
